A survey from Cranfield School of Management found that 85% of businesses were satisfied with their auditor, but only 40% used their accountant as the first port of call for financial advice. Cranfield said the findings suggested smaller accountancy firms were in danger of losing business to mid-sized practices.
Colin Barrow, head of the enterprise group at Cranfield School of Management, which carried out the research, said: ‘Smaller accountancy practices are leaving themselves vulnerable to the mid-size accountancy firms with a broader range of offerings.’
Barrow said the findings suggested businesses were happy with their auditors, but didn’t appreciate the full range of services accountants can offer.
‘It’s a bit of a worry because the mid-size accountancy firms and the big ones are actually making a strong effort at portraying themselves as a source of rounded business advice,’ said Barrow.
While 85% said they were satisfied with their auditor, Barrow believed this partly reflected low expectations.
He said: ‘They don’t see the audit as a value adding process. They see it as an irritant. When people are shopping for an audit, they are shopping on price to try and get their costs down as opposed to shopping on value to see what they are paying for.’
The survey of 435 managing directors and CEOs of owner-managed companies also found that 80% would turn to their bank first when experiencing cash flow difficulties.
Enterprise Finance Europe (EFE), which commissioned the research, said the findings showed how accountants failed to raise awareness of their capabilities beyond the traditional accountancy and audit role.
Gerry Hoare, southern region managing director for EFE, said: ‘Many businesses are still very much reliant on the traditional ‘number crunching’ services offered by accountants.
‘Undoubtedly, accountancy firms could be doing more to support their business clients – helping to educate them and raise awareness of the innovative financial solutions available.’
The research also revealed that an overwhelming majority of the respondents would turn first to their bankers when in need of help to solve a cash flow problem.
After banks, however, the next most popular source of help is factor or invoice discounters. The results showed that 10% of fast growing companies and 9% of slow growing businesses would take this route over going to their banks.
Surprisingly, 5% of those in slow growing enterprises said they would go to their families and friends to help solve their cash flow problems.
Among companies with fast growth only 2% thought this a wise route for overcoming obstacles.
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