Study shows that SMEs with accountants make more money
Study shows that SMEs with accountants make more money
A new study has found that small businesses in the UK achieve higher revenues when they use accountants and bookkeepers to help manage their finances.
Small firms with access to the expertise of accounting professionals are achieving an 11.5% increase in revenue compared with those that don't, according to new research. They also experience greater confidence and improved wellbeing.
Intuit QuickBooks, in conjunction with Dr Chris Brauer of Goldsmiths, University of London, Symmetry Research and the Association of Chartered Certified Accountants (ACCA), has published a study on the correlation between the use of accountancy services and revenue growth among sole traders, micro, small and medium-sized businesses.
The findings show that, on average:
- Sole traders that have access to professional accounting services see an 8.9% revenue increase;
- Micro-businesses with one to nine employees see a 7.9% increase;
- Enterprises with 10-49 employees, achieve an uplift of 10.1%;
- Firms with 50-99 employees get a 12.8% revenue boost;
- The largest SMEs (with 100-250 employees) experience a 13.7% increase.
It means that by using an accounting professional, sole traders boost their revenue by more than £6,000 a year; enterprises with 10-49 employees see an increase of over £180,000.
Of the 4,000 small businesses surveyed, 73% said that using professional accounting services has strengthened their financial reporting, and this alone had offered increasing opportunities to get bank loans or government support.
Business owners lose sleep over financial worries
The study also found that 88% of small business owners in the UK are concerned about making accounting mistakes, with 28% being very concerned that they will make mistakes in financial reporting, payroll and tax preparation.
Unsurprisingly, the mental health of business owners is impacted by the stress of financial management - 38% say they suffer from a lack of confidence and 28% say they lose sleep because of worries about their business finances.
On a positive note, 80% report either a moderate, significant or transformational effect on their stress reduction when using an accounting professional.
Accountants save time for small firms
On average, sole traders using professional accounting services save 4.7 hours per week, with mid-sized businesses saving 11.6 hours per week. Across the board, an average of 9.1 hours are saved per week by using accounting services.
"The results are clear: SMBs using internal or external accountants see an average revenue increase of 11.5%, with significant improvements in financial management and confidence. By controlling for firm size and age, the research underscores how essential accounting professionals are in driving growth, improving decision-making and supporting long-term success for SMBs." Dr Chris Brauer of Goldsmiths, University of London.
The study also reveals that there are notable differences across regions in terms of how many firms use accounting professionals:
- 80% of SMEs in the North West of England have an accountant or bookkeeper;
- In Northern Ireland, 93.3% of SMEs have an accountant or bookkeeper
- In the South West, however, only 68.7% of SMEs have an accountant or bookkeeper.
According to the study, the gap between UK businesses using accountants and bookkeepers (78.6%) and those who aren't (21.4%) is limiting the true economic potential of the small business economy. If more small firms started using accountants, they have the potential to create a substantial uplift to the UK economy.
This article is sourced from the following link:
https://www.moneydonut.co.uk/news/study-shows-smes-accountants-make-more-money
