Small business owners’ reliance on their accountant is paramount; firstly as the person keeping the business within the compliance “straight and narrow” but also as a trusted adviser on everything financial (and probably legal).
Few SMEs have access to any other expert advice on their business plans and operations other than through their accountant. In fact, in their Small Business Matter report, ICAEW indicate that “48% name their accountant as their most trusted business adviser”.
From the ICAEW study, 7 factors are listed to indicate where a SME will seek an audit or review on the businesses. These are all opportunities to access a business who is open to buying advisory services - i.e. they might be a prospect.
It is likely that 5 of the 7 factors (excluding “Comfort for management” and “Accounting up to date”) are going to present an opportunity for accountants to at least have a discussion around what finance options are available in the market.
Also from the same report, data from BIS suggests that on the subject of raising finance, and that of those seeking advice on raising finance, “60% had sought that advice from their accountant (21% had gone to a bank, and only 7% to a specialist financial adviser)”.
A paper from Northumbria Research by Scott, Jonathan and Irwin (2007) on “How SME owners' characteristics influence external advice and access to finance” also “found that accountants are the primary sources of advice (35 per cent) followed by family and friends (25-30 per cent)”.
Whether a business intends to actually take finance when they are in an audit or review engagement is missing the point, in our opinion. Much of the reasoning behind a business taking finance depends on how much it costs, so a search needs to be quick and easy.
By using a service such as Capitalise.com - whether through our Funding Report feature to present the options available to your client without engaging lenders or actively to run a Funding Search to engage lenders and receive offers - allows you to service your advice with more supporting materials and options.
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