Compliance still key for small firms?

The Forum of Small Businesses’ biennial survey, which contains details of the
most popular sources of business advice, has always given practitioners an
excuse for a bit of trumpet-blowing.

For many, the fact the latest survey reveals that accountants are still the
number one source of advice for small businesses just maintains the status quo.

But a dramatic slump in the number of clients going to practitioners for
advice, from 74.1% in 2004 to 53.7% in 2006, may be a great cause for concern.

So what has happened over the past two years to change things around? Why
have other sources of advice, including solicitors and banks, also suffered
during that period? Most importantly, what does the future hold for the
practitioner to small businesses?

Dave Reynolds, CEO of accounting IT association IAAITC, said the figures
suggested a fall in compliance work for practitioners that has not been replaced
with more value-added services to clients.

‘What small businesses want has changed,’ said Reynolds. ‘Accountants are not
providing the relevant advice. Clients want to increase sales and reduce costs,
but accountants are still too focused on compliance.’

However, Peter Mitchell, chairman of the Society of Professional Accountants,
believes practitioners are busier than ever and SMEs are just sourcing
information from the internet. ‘Accountants are still providing value-added
advice, they’re just not acting as postboys for their clients any more,’ he
said. One big fee revenue growth area for accountants is self-assessment forms.

Reynolds agreed that the internet has become a major source of information
for businesses, which has lowered the number of clients going to more
traditional sources of advice, but warned that the numbers would decline
further, ‘if the profession doesn’t get its act together’.