Accountants and bookkeepers unlock 11.5% more revenue in small and mid-sized businesses

First-of-its-kind study reveals the transformative impact of professional accounting and bookkeeping services in UK SMBs. Find key takeaways below and read the full report.

Small and mid-sized businesses (SMBs), enterprises with 0-250 employees, are the foundation upon which the UK economy rests. They account for 99.9% of all businesses and contribute approximately £2.4 trillion to the UK market. 

However, while SMBs are the heroes behind economic growth, the economy has become a complex, and increasingly uncertain, place for them to operate in. As such, leaders from the 5.5 million SMBs that exist in this country must artfully navigate their enterprises through a complicated mesh of regulatory, fiscal, and strategic challenges to simply survive. 

Against this backdrop, gone are the days of accountants and bookkeepers being seen as the stereotypical “number crunchers” — solely responsible for managing business finances, taxes, and compliance concerns.

Much more is being asked of today’s accountants. In many cases, accountants and bookkeepers have had to become trusted advisors, offering guidance on everything from business performance to long-term growth strategies. The goal of our research was therefore to examine how this expansion of responsibilities can transform our sole trader, micro, small and medium business community. 

Working with Dr Chris Brauer from Goldsmiths, University of London, Symmetry Research, and the Association of Chartered Certified Accountants (ACCA), we conducted a first-of-its-kind academic study. 

By employing rigorous methodologies mirroring established research models, we looked at the correlation between the use of accountancy services and revenue growth among these businesses.

We accompanied this with a survey of managers and decision-makers from 4,000 SMBs across the UK, exploring how their reliance on both internal and external accountants and bookkeepers affects their performance. 

Various factors were considered, including revenue, time, stress and overall satisfaction. Our findings prove that accountants dramatically influence multiple facets of a business — they are the true heroes behind the heroes of our economy.

How do accountants impact revenue growth?

Revenue generation is always a primary concern for an SMB. When we applied our research model to calculate the operational impact of accountants, we discovered they were responsible for a whopping increase of 11.5% in revenue per year on average.

There were some interesting variations that emerged based on business size. These gains were primarily driven by improved financial management practices, which in turn, lead to substantial time savings and enhanced decision-making capabilities. 

However, the challenges leaders turn to accountants for these days often transcend financial matters. For example, helping to understand employment issues ranks highly as a task that leaders from SMBs of all sizes looked to accountants for. 

So, given the breadth of support accountants now provide, it’s no surprise that 95% of SMBs say they would recommend an accountant to a peer that didn’t already have one.

How costly is it to not have an accountant or bookkeeper?

Another big highlight is how much not using an accountant can cost an SMB. That’s because the scope of financial and regulatory obligations an SMB must contend with can be vast, and the financial penalties for mistakes can be crippling. 

For SMB owner managers, the financial confidence gained from knowing their accounts are in order cannot be overstated. That assurance can empower them to pursue new opportunities with greater vigour.

For instance, around 70% of respondents agree that professional accounting services strengthen financial reporting, allowing them to better position themselves for securing loans and government support. Furthermore, SMBs report feeling more prepared to tackle upcoming challenges, including compliance with new schemes, such as Making Tax Digital.

What role does accounting play in wellbeing?

The fear of an accounting mistake doesn’t only impact a business’ bottom line. The pressure of making sure accounts are balanced, taxes and employees are paid, and regulations are followed — all while attempting to grow a business — can impact a leader’s health too.

The extent of that impact varies across the country and by business size. For instance, sole traders and SMBs in the North East of England seem to be the most affected by loss of sleep and other adverse effects due to accounting mistakes. 

Fortunately, we also discovered that having an accountant or bookkeeper can also significantly alleviate the mental burdens of financial stress. And that only improves if partnerships built on trust can be formed between the two parties. 

In these cases, the role of an accountant can begin to expand into one of a trusted advisor. And by leveraging their expertise and personal experience, they can act as strategists, offering guidance in trying times. 

How do you know if an accountant is right for you?

We’re living in a fast-changing world, where factors ranging from new technology to global politics all have an impact on the success of our SMB economy. Our research clearly illustrates how the role of accountants and bookkeepers have evolved to provide the critical support that leaders need in a climate like this.

By managing the intricate technical and regulatory aspects of business, accountants enable SMB owners to focus on growth, build confidence, and enhance overall wellbeing across the board. 

Yet, while most SMB leaders acknowledge that having an accountant or bookkeeper has been at least moderately transformative for their businesses, the full potential of these professionals isn't felt equally across the nation. Our research highlights a number of regions across the UK where businesses still have significantly untapped potential.

Contact Zyla Accountants today for support with your Small Business.