PracticeConsultingSME Barometer – Smart service for the SMEs

SME Barometer - Smart service for the SMEs

What do SME clients really want from their accountants? Brian Collett asked some, and discovered that all-round business advice is the order of the day.

Here and there, some accountants trumpet their virtues as advisers, and not just as the people who keep the books in order. Mostly, it seems, they come from the top 20 firms.

Levy Gee is typical of that upper echelon – the firm even shouts at you in large letters written on the wall outside its central London offices that it gives business advice.

Douglas Shanks, Levy Gee’s new business partner, explains why: ‘We have chosen to describe ourselves as accountants and business advisers as this most accurately represents our business services and our entrepreneurial approach.’

His attitude illustrates the sea change that has travelled right through the profession, making it increasingly the place where business can seek guidance on a range of issues.

Comprehensive research by Sage, the accounting software group, shows that more than half the participating companies that asked their accountants for specific information technology advice had purchased the packages recommended by their advisers.

Results of this kind certainly blow the cobwebs off the old image of accountancy. In fact, it is accountants’ experience in many areas that counts, according to the Federation of Small Businesses.

David Hands at the federation finds that most of his members discuss their issues with their accountants as well as their bank managers.

‘Their accountants are in the know,’ he says. ‘They are aware of what is going on in the business world, and are therefore in a good position to give good advice. And a lot of our members have retained the same accountant for years and years. A small business respects its accountant.’

Hands also believes that businesses would not be hoodwinked by charlatans and cowboys as often if they spoke to their accountants first.

In recent years, many businesses have been approached by self-styled consultants and persuaded to part with money to find out about the grants and loans to which they are entitled. Yet they could have received the information free from a Business Link.

A simple telephone call to an accountant would often have revealed whether the consultant was a phoney or a genuine grants adviser. ‘But people tend to be caught out more if they are in trouble – then they will try anything,’ says Hands.

Michael Sharples typifies the new breed of businessman who has redefined the accountant’s role. Sharples, managing director of Stratum, a fast-growing electronic commerce development company based in Runcorn, Cheshire, says: ‘We don’t look on our man as an accountant. We see him as giving added value to the business.

‘He offers strategic thinking about what we should be doing with our money, he helps us with our relationship with our bank, and he helps us to appreciate how our bank thinks.

‘Most importantly, he shows us, as a growing business in the internet field, how we can approach lending institutions for more funds. We needed capital to grow and he helped us to present our case.’

To play this part, of course, the accountant must have a sound working knowledge of the client’s business. ‘We are a technology company developing Web-based services, and we need an accountant who understands that business,’ says Sharples. ‘And he has learnt from dealing with us the importance of technology.’

Sharples, however, does not believe that his accountant’s approach is general in the profession. ‘We have had relationships with other accountancy firms, and they are not doing the same things,’ he says. ‘They’re still saying: “We do accountancy and we charge you a lot of money to do it”.’

Sharples’ company dropped its last firm because they were not doing the job properly.

Investment is the strong suit that Bart Delgado looks for in an accountant.

As managing director of Swan Solutions – a company in Crawley, West Sussex that designs and writes callcentre telephony software and is currently experiencing year-on-year growth of more than 370% – Delgado asks: ‘Where else would you look for investment advice? I think accountants are a good place to start.’

This change in the accountant’s role is a significant factor for Jim Barrington as well, who runs the newly founded Association for Small Businesses.

‘There is a move away from being men in grey suits who punch numbers to becoming people with actual personalities,’ says Barrington, managing director of the Barrington Group, a Merseyside management consultancy.

‘There is more of a tendency to act as a hands-on adviser, but there is a long way to go yet.

‘It is no longer good enough to say, “Here are your forecasts and they will be fine.” ‘

To produce a forecast that is useful you have to understand a business.

The problem in the past is that accountants have not understood the business.

They need to help people to work on their business, not just in their business.’

Tricia Topping even calls her accountant ‘pushy’, and values him for it. Topping, who heads TTA, a public relations company in Sutton, South London, says: ‘He is pushy in the nicest sense of the word. Since we changed from a Big Five firm to using a niche accountant, he has pushed us to think about the business with him on a monthly basis, and to tackle problems long before they become a disaster.

‘He was very keen for us to enter the top 150 PR consultants league table – which is based on financial information – and even telephoned for an application form himself.’ This is a prime example of a pushy accountant thinking about his client and helping the client’s business to grow, to the benefit of both parties.’

If the clients see their accountants as business consultants, investment advisers and even ‘pushy’ influences, then just how do the practitioners now see themselves?

They have to offer a fuller service because of the competition among firms, says David Turnbull, chief executive of the UK 200 Group of Chartered Accountants. ‘Thus there is a greater need to promote your practice,’ he says. ‘At the same time advice is becoming more sophisticated, and as a result there are new demands on practices and business people.’

But he also makes the point that the good accountants were always business advisers as well. ‘Twenty or thirty years ago,’ he recalls, ‘the good ones were actually very close to their clients. They dealt with a whole range of things for them.

‘Even before the last war – and just after it – they were helping to save businesses, although today more accountants are aware they should give business advice.’

Jonathan Russell, of Critchleys, an Oxfordshire practice, regularly sees both extremes in companies. ‘There is the client who is moving towards seeing the accountant as a part-time business adviser, rather like a non-executive director. This type of client expects you to be completely up to date on their business, and is prepared to pay for that service.

‘The other extreme regards the accountant as an inconvenience needed for compliance work. We are the unnecessary cost. All they want to know is what our bill is and what tax bill they will have to pay.’

Russell is also very unhappy about the resistance coming from some quarters in Europe to accountants offering business advice. In Germany, for example, an auditor is barred from giving fiscal advice.

He fully endorses the growing role of the accountant as an adviser, yet does not see it happening often enough. ‘I still feel that there is a fundamental flaw in our training,’ he says. ‘We simply don’t train in business acumen. We are too compliance-oriented.’

A similar view, writ large, is taken by Harry Brown, of Berg Kaprow Lewis, in Finchley, North London. ‘If you stopped 100 people in the street and asked them what they expected from their accountant, they would say he was there to prepare accounts and keep the taxman happy,’ says Brown.

‘That is an indictment of our profession. And a high proportion of accountants, possibly as much as 90%, would do no more than that. But most businesses need business advice, and often ask for it only when they have a problem.’

Brown blames the profession itself for this state of affairs. He says: ‘What we should be doing is giving general business advice all the time.

We should be looking at the systems and processes within the business, at the financial and management controls, and at the particular level of activity in the business.’

He believes that if a company’s marketing is sluggish, the accountant could look at the function differently, and improve it. Or he might find the pricing policy all wrong and advise the company on that too.

Brown thinks his own firm has taken a step in the right direction by setting up a unit for ‘growing businesses’, which he heads. The unit holds seminars and workshops to make business advice available.

And for business people who believe that their accountants exist only to do the books and send in the tax returns, Brown has a pithy message: ‘On business issues, accountants should be the first port of call.’


According to Richard Wade, middle-market leader at PricewaterhouseCoopers, the main message for the SME sector – and the accountants who service it – is to ‘go global’.

‘What has become apparent is that business is now hugely international.

Among the middle-market companies surveyed last year by PwC, 80% to 90% said that their business was being affected by global competition. It’s a global marketplace and it’s a hi-tech world.’

Small and medium-sized companies, that much fought-over sector for mid-tier firms, are all facing the rigours of globalisation. ‘Many middle-market companies are in the supply chain of international companies, so the business of the middle market is affected by globalisation,’ says Wade.

But a widening marketplace brings threats as well as opportunities. ‘Businesses really have to be clear about their core competencies – what is it that they are really offering? Because the big boys will always beat them on volume and price.

They have to identify niche areas in which other, bigger players can’t operate.’

Once companies factor in the opportunities provided by the internet, taking advantage of low set-up costs and opening up their services to a wider market, they will be looking for specialised help. Accountants should be ready to provide advice on everything from international tax issues to information on supply chain-management.

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