A good accountant can be the difference between success and failure for Kiwi businesses in tough times, a new study by the New Zealand Institute of Economic Research (NZIER) shows.
The institute analysed three years’ worth of data from business software provider MYOB’s regular survey of more than 1000 small and medium enterprises (SMEs). It found fuel prices, competitive activity and margins were the most severe pressures faced during the past three years of economic downturn.
But the study, Lessons from the Recession, also found that those businesses getting good advice from their accountants were in a better position to grow in 2013.
The study indicated that could be a big year for accountants and business advisers as smaller businesses pushed to grow in tight economic times.
MYOB’s New Zealand sales manager, Scott Gardiner, said too many SMEs used their accountants to meet their tax requirements only, when they could be using them in a more strategic way to strengthen and grow their businesses.
“Often, owning a small business can be a lonely life. Often, you’re doing it all on your own,” he said. “Your accountant is another voice, which knows your business. They often have excellent advice and there’s not much they haven’t seen before.”
The NZIER study found that, in today’s difficult business environment, businesses looking to improve margins needed to know exactly where their costs were coming from, which is where an accountant could help.
It found one big hurdle facing SMEs was a lack of access to debt. “Over the course of the downturn, access to debt has been of huge benefit to businesses as it opened up productive avenues for investment and can help smooth out seasonal cycles,” the study said.
Businesses that engaged in more transparent book-keeping and more effective business systems were able to present clear information to lenders that could make a business a far less risky proposition. This was another area in which a good accountant could be of advantage, the study said.
Gardiner said two keys elements in choosing an accountant were to find one who knew your industry and then to establish a good relationship.
He said the costs of a more-involved relationship with an accountant should be considered in terms of the value brought to a business.
– © Fairfax NZ News
http://www.stuff.co.nz/business/small-business/8402601/Importance-of-a-good-accountant
