A new survey underlines how many UK small businesses say they are struggling yet are also overlooking an essential source of advice, know-how and practical assistance that can help them improve their circumstances – a professional accountant.
More than half of the 500 businesses surveyed by Dext in their latest nationwide study found that 54% of small and medium sized businesses said that an unforeseen financial event could shut them down.
But even more, 62%, said they are navigating today’s difficult economic environment without professional accountancy support.
This potentially dangerous mismatch between risk and readiness highlights the limits of going it alone as an entrepreneur.
Accountants bring not only strategic insight but data-driven decision making, time-saving technology and years of experience. This is greater than a missed opportunity, it’s an ongoing material risk.
Missed opportunities
The report highlights a persistent gap in both technology and available support.
Advances in automation and cloud-based systems and tools across the accounting profession has made it more efficient and agile yet 58% of firms surveyed relied on largely manual financial processes with just 4% being fully automated.
Over a quarter (27%) said they spend the equivalent of a full working week every month on financial admin. 37% said they spend more time on finance than on developing new business opportunities.
Additionally some small firms are attempting to manage their finances without any expert guidance at all. 22% of respondents said they manage their finances entirely alone while 10% rely on family or friends for support.
The amount of time that could be saved by outsourcing this essential role to experts is clear.
Fail to plan
The report also has some negative things to say about financial foresight based on the responses received.
Just 29% of businesses conducted recession scenario modelling and fewer than one in four (23%) regularly reviewed their performance metrics.
With 53% of SME directors and business owners saying that forward planning is “virtually impossible” in the current climate, the findings only serve to underscore the need for expert help – not only to manage compliance and financial admin but to support longer-term decision making and strategy.
Accountants are not just record-keepers any more but business enablers. Their ability to deliver tech-driven insights, streamline processes and unlock growth opportunities has never been more important.
The gap is not just in business planning but also capability.
At best estimate 75% of UK accountancy firms are investing in cloud platforms and big-data analytics. Over half are already using or planning to adopt AI this year.
This puts small firms, many of which are still using manual processing including invoices and ledgers, at risk of falling further behind.
Refusing to connect with accountants will continue to leave these companies unequipped to withstand continued inflation, tax complexity and economic volatility.
The businesses that recognise this and look to step up and fix this imbalance will be the ones who reap the benefits.
Getting expert help at the right time has always been one of our guiding principles.
This is why we offer a free initial consultation for any director or business owner who wants to explore their immediate prospects and what they can do to enhance them further.