Accountants urged to step up and steer SMEs through turbulent times

Accountants urged to step up and steer SMEs through turbulent times

Accountants encouraged to help guide SMEs through ‘the most turbulent time they have ever experienced’.

Accountants urged to step up and steer SMEs through turbulent times

With so much economic uncertainty, 46% (2.6 million) of UK businesses have genuine concerns about their future, with one in four indicating that their business may go under in the next five years, according to a survey.

Research by Xero found that small business owners were putting nearly £12,000 of their own money into their business and working an average of nine hours overtime a week.

Responding SMEs listed their current concerns as late payments (54%) and tax rates (44%). Their greatest future threats were Brexit (44%), maintaining or increasing levels of productivity (31%) and employee recruitment costs (19%).

With all these challenges, present and future, over one-third (37%) have stated this is the most turbulent period they have ever experienced.

Accountants can lead the way

The findings come as the role of accountants evolves from a ‘number cruncher to financial advisor’ – with the report suggesting accountants do more to help SME clients through this difficult time. Technology such as AI is predicted to play a major helping hand in this, freeing up time for accountancy professionals to add value to their roles.

The report states: “[Accountant’s interaction] with their clients will become more fluid and tools will be better integrated in order to interact more seamlessly. The deployment of AI features within communication technology will increase productivity, with communications being optimised by the introduction of smart replies, automated meeting scheduling and contextual content creation, freeing up accountants to have a more holistic view of their clients’ financial picture.”

Accountants are well positioned to advise their SME clients of the benefits of these new technologies and how best to incorporate them into their business.

Always look on the bright side

Despite the overall pessimism around the current conditions, the report paints a relatively optimistic future for the country’s SMEs.

Gerd Leonard, business futurist said: “Humanity will change more in the next 20 years than in the previous 300. We will see the biggest technological transformation in human history – impacting where, how and why we work.”

“Automation is reducing the need for humans to undertake routine tasks and the world of work is heading towards a dramatic reset. Everything we assume about work, jobs, training and education is being challenged by exponential scientific and technological progress. Whether you’re a small business owner, an accountant, bookkeeper or advisor, these emerging trends will affect you very soon,” he added.

For SMEs these new technologies include AI, cloud computing, mass automation and hyper-connectivity. Nine out of ten SMEs have already said technology has changed the way they do business these last five to ten years and this trend is expected to accelerate.

Ending an eternal problem

Technologies like end-to-end digital payments may finally overcome the late payment problem that plague SMEs. More than 56 million work hours a year are wasted chasing after late payments and 37% of SMEs run into cash flow problems because of it.

Xero co-founder, Gary Turner said: “The ways small businesses work now are dramatically different from the 1980s when the first personal computers arrived. But business needs to adapt to greater changes coming their way.

“New technologies will hasten a far greater consciousness towards the biggest killer of small businesses. Cash flow problems will decline as instant payment technologies take root as a cultural norm. I believe what we’ll see is 30-day payment terms going the way of the fax machine.”

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