Practice zone

The accounting habits of small business clients confirmed

Recent research has shed light on the relationship small businesses have with their accountant. It reveals a client base this is more ready than ever to vote with its feet, but eager to build close relationships if the service is right.

In a joint survey carried out by the UK200 Group and Clydesdale Bank, 86.8% of respondents said that poor or incorrect advice from their accountant had encouraged them to take their business elsewhere. The second biggest deal-breaker was “a lack of personal touch”, with 65.8% of the vote, followed by high fees, which received 60.5%. Only 9.7% said that their accountants helped them achieve the best possible savings.

As far as attractors are concerned, 84.2% of respondents said that when choosing a new accountant they followed personal recommendations, while 63.2% based their decision on reputation alone. Respondents rated tax planning as the most valued service provided by their accountants.

Despite all this the market remains fairly static. Many of the business owners surveyed said they stuck by the accountants they chose – with 60.5% having stayed with theirs for between 5 and 10 years. However, over half (51.6%) said they wanted to develop better relationships, and switch from an independent financial adviser to an accountant who offered the same services. Around one-third said they would even welcome their accountant filling a role similar to a business partner.

The survey also showed that a majority of respondents are happy to communicate with their accountants online, with 56.8% preferring to exchange and receive documents by email.

How respondents expected their practitioners to communicate digitally without incurring “a lack of personal touch” was not revealed.


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Mark Lee, 23 January 2008 @ 21:00 PM

Less than 10% said that their accountants helped them achieve the best possible savings.
I'm always a little dubious about surveys as so much depends on the questions that were asked, the context and the demographics of the respondents.

On this occasion I don't doubt that less than 10% said that their accountants helped them achieve the best possible savings. However that's not the full story I'm sure.

I firmly believe that far more than 10% of accountants DO help their clients to save tax and to pay the lowest amounts of tax possible (within the law). The disparity arises because most clients don't know that their accountant has done this. How could the client know - if the accountant doesn't tell them?!

I wrote about this on my blog for ambitious professionals in August 2006 in a posting entitled: Getting straight to the answer may not be best. I explained why the very common and superficially attractive route of doing your best for a client, as if you were on 'automatic pilot', has a number of disadvantages as compared with following what I called the 'two-step' approach.

It would seem that less than 10% of accountants currently follow the 'two-step' approach. ;-)

Mark Lee
Blog for ambitious professionals
www.BookMarkLee.co.uk