Accountants in high demand as small businesses navigate pandemic challenges
As small businesses grapple with the ongoing impact of the pandemic, a new survey finds they are relying more heavily on accountants for a range of non-traditional services and support.
Small businesses are relying more heavily on their accountants during the pandemic and increasingly want advice on a range of non-traditional topics such as human resources and sustainability, according to a new Xero survey. The State of the Industry report also highlights the changing shape of accounting, with a majority of firms either merging or starting a new practice in the past year, and many citing staff shortages as the reason.
Xero country manager Will Buckley stated, "The findings from Xero's research highlight more clearly than ever the critical role accountants and bookkeepers play in keeping small businesses up and running — not just with their finances but now in other business-critical functions as well.†The survey found that 85% of larger practices claimed that some or most of their clients were relying on them more for services and support over the past six months. Larger practices (with more than 10 staff) were providing more advisory related services in areas like HR (38%), start-up mentoring or business development (33%), advice on capital raising (32%) and sustainability reporting (24%).
Buckley attributes this shift to the closer ties that developed between small business owners and their accountants during the pandemic. "Because of all the compliance work that the profession was working through for their clients throughout the pandemic that just made for deeper and more intimate conversations with clients, he explained. The trust that was developed and those deeper relationships and conversations post-pandemic and during the pandemic with all the compliance work has paved the pathway for those demands."
However, this increased demand for accounting services is putting the talent shortage into sharp relief, with hiring experienced workers being the main challenge for almost 4 out of 10 practices. To address this, many practices are looking to merge, change ownership, or expand their talent search across borders. The use of hybrid working, employee benefits, and professional development are also becoming increasingly common as firms try to build a culture that will attract and retain employees.
The survey also found that inflation is another significant concern, with almost half of the respondents expecting to raise fees and almost one-third anticipating a reduction in staff due to the economy. The cost of living pressures and inflation have advisers worried for their clients, with 56% of firms anticipating their clients will need more support and 43% expecting some will be at risk of closing within the next year. Only 14% of firms predict no change in client circumstances over the next year.
Xero's State of the Industry report surveyed 568 independent accountants and bookkeepers in November and provides valuable insights into the current state and future outlook of the accounting industry. As small businesses navigate the ongoing challenges posed by the pandemic, it's clear that accountants will continue to play a critical role in their success.
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