The Chartered Institute of Management Accountants report, which explored financial management in SMEs, discovered that accountancy within small and medium-sized enterprises was often managed by the owner or manager.
This, the report claimed, restricted the time the owner or manager could spend developing sales, marketing and products, and tended to occur because accountants were often perceived as offering a “generic” service.
“Business owners do not always appreciate the value that management accountants can add,” said Professor Malcolm Prowle, who was one of the academics behind the report.
“Accountants were sometimes regarded as little more than bean counters, rather than potentially having a business partnering role where they can advise and improve efficiency and not just keep the books in order.”
The report also stated that some entrepreneurs were reluctant to employ management accountants because they did not want to share sensitive information and preferred to have control over all aspects of their finances.
“They believe the process of crunching the numbers themselves gives them superior insights and greater control. This could effectively result in higher costs in terms of management time – time that might be better spent developing the business in other areas,” Professor Prowle added.
Glynn Lowth, a qualified accountant and visiting fellow at Nottingham Trent University, was also involved in the research, which focused on seven small companies in a variety of industries.
According to Mr Lowth, accountants were not necessarily perceived negatively by small business owners, but rather the full services offered by them were not fully understood.
“We found that most small business owners did not want a third party looking at their information and this represents a missed opportunity,” he said.
“It is not about a lack of trust, but rather that accountants are perceived in the industry as someone who just gives a bit of tax advice and looks at the books at the end of the year.”
Mr Lowth said smaller businesses must be made aware of the benefits of professional accountancy, which could potentially add value to the company by freeing up crucial time and boosting profits.
The small businesses featured in the report included a satellite communications equipment manufacturer, an air-conditioning equipment distributor and consultant, an engineering and maintenance services provider, an IT systems consultant, a registered charity for conflict resolution, a car and van rental company and an alternative books publisher.
Adviser view
Allan Maxwell, director of Glasgow-based Corporate Benefits Consulting, said: “From our point of view, we do use an accountant and the advice is extremely useful. Any business looking to maximise its profits and services needs to look at any form of advice that could help. You have to, of course, consider the cost of having an accountant versus the value it adds, but a lot of accountants do provide a flexible, non in-house service at a reasonable cost.”
