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Significant decline in SMEs naming accountants as their most trusted advisor



Finance | News

By Loren Webb

Accountants are losing ground when it comes to SMEs nominating their most trusted business advisor, according to a national survey of more than 1000 Australian businesses.

The September 2019 SME Growth Index found that only one in 20 business owners named their accountant as their most trusted business advisor. In 2017 when the question was last asked, around one in 10 nominated their accountant as their key trusted advisor.

SMEs’ most trusted advisors are business colleagues (40.7%) and trading partners or suppliers (22.2%), which is consistent with 2017 results.

Advisers with specific expertise, including accountants (5.7%) and brokers (4.1%), rank behind friends (8.6%) and family members (7%). Bank managers were named by 2.6% of SMEs, with fewer than one in 100 SMEs nominating a business coach.

The SME Growth Index is conducted by banking analysts East & Partners, on behalf of national working capital funder Scottish Pacific. Twice a year owners, CEOs or senior staff of small to medium businesses across Australia, with annual revenues of $A1-20m, are surveyed.

Scottish Pacific CEO Peter Langham said the results should be a call to action for the accounting profession, because accountants have so much to offer business owners when it comes to expert advice, strategic input and education about funding options.

“In 2015 and again in 2017, almost 10% of SMEs named their accountant as most trusted advisor. It is concerning that this has almost halved,” Mr Langham said.

“Accountants could and should play an important role in strengthening Australia’s SME sector. This goes way beyond ‘number-crunching’ and is more about helping clients understand the many ways they can fund a business and getting them ‘finance fit’ so their applications are more likely to be approved.”

Which SMEs advisors have the biggest impact

Previous SME Growth Index research found accountants are the trusted advisors that have the most positive business impact on SMEs – 82.9% who nominated accountants said they had helped the business, compared to 68.8% for family members, 58.8% for business colleagues, and 27.1% for friends.

This round, SMEs were asked to name the biggest impact of their trusted advisors – this was giving SMEs confidence about strategy direction (nominated by 38.7%). Other positive impacts included helping with staff/hiring (22.2%) and equipment purchase decisions (14%), providing access to credit (11%), helping with asset sales (8.1%), reducing costs (10.2%), preventing insolvency (7.9%) and improving revenue (7.6%).

The top three criteria SMEs look for in a trusted business advisor are real world experience (23.6%), independence/truthfulness (22.1%) and the history of the relationship (19.8%). These were more important to business owners than having useful contacts (12.1%) or specific sector knowledge (8.2%).

SMEs are seeking more regular advice

On an encouraging note, SMEs are reporting more regular contact with their trusted advisors – in 2017 a third said they had no regular contact, and this has now fallen to only 15.6%.

One in four SMEs talk to their most trusted advisor every week or fortnight, a fourfold increase from 2017.

The most striking positive change is that significantly fewer small businesses report having no trusted advisor. This has fallen from 38.6% in 2015, to only 8% of SMEs going it alone in 2019.

“While this trend to seek advice is reassuring, given the low numbers of business owners nominating accountants as their most trusted advisors, you’d have to question whether SMEs are putting their faith in the right advisors,” Mr Langham said.

Where to for accountants and brokers?

“For the overall success of the small business sector, there needs to be an attitude shift amongst SMEs towards seeing accountants as a business investment rather than a cost point,” according to Mr Langham.

“I believe accountants need to become more proactive in helping set clients on the right path to success.

“One way both accountants and brokers can do this is by helping SMEs understand the funding options available to them and broadening SMEs’ thinking around what product is right for their life circumstances and business phase.

“Many SMEs say they have had funding rejected, but the funding is there if they know where to look. SMEs need to understand the options and not just revert to self-funding business growth if they are rejected by the banks. This is where accountants and brokers can play a key role,” he said.

Scottish Pacific in partnership with the Australian Small Business and Family Enterprise Ombudsman have released an independent guide outlining a wide range of funding options suitable for different small business needs. The Business Funding Guide, targeted at advisors such as accountants, brokers and book-keepers, and the FitsME Guide, its short companion for SMEs, are both available as free downloads.

“Owners live and breathe their business 24-7 and don’t have time for a lot of research. Many of our clients tell us ‘I wish I knew this type of funding existed years ago, it would have made my life easier’,” he said.

“We’d encourage accountants and brokers to make SMEs’ lives easier by having more regular meaningful conversations – the more you engage with clients, the more they see you as a trusted source, so if they want to expand or are having cash flow issues, you can help them make informed decisions about funding.”

Download the full SME Growth Index.


Scottish Pacific is Australasia’s largest specialist working capital provider, helping thousands of business owners with the working capital they need to succeed. Scottish Pacific lends to small, medium and large businesses from start-ups to SMEs with revenues of more than $1 billion.