Small Business Trends 2021 – How Advisors Make a Positive Impact on SMEs

Throughout 2020, Accounting Practitioners reported intense work-activity due to heightened communication with clients struggling with tough circumstances caused by Covid-19. Recent research shows their efforts have not gone unrecognised.

A survey of more than 1500 small-to-medium enterprises (SMEs) conducted on behalf of non-bank lender Scottish Pacific Business Finance (ScottPac) reveals that more than half (54 percent) turned to advisors such as Accountants on average 13.3 times each quarter last year.

The Growth Index indicates that eight in 10 respondents (81 percent) reported that the advice they received had a positive impact on their businesses.

The Top 5 Positive Impacts were:

• A boost to the bottom line through cost reduction (63 percent)
• Helping access government support and stimulus measures (37 percent)
• Providing confidence in the direction the business was taking (28 percent)
• Enhancing customer relations (18.5 percent)
• Assistance with funding access (18 percent)

Advisors also played a key role in assisting negotiations with the Australian Taxation Office, helping one in 10 clients. Further, one in 12 survey respondents noted advisors also helped with the sale of assets.

Key Trends for 2021:

Last year was crucial for all of us and has taught many businesses world-wide to be mentally resilient and financially vigilant. Some businesses buffeted due to Covid-19, and others buoyed.

The data collected from XERO’s 2.3 million users shows some key trends identified in 2020 and vital forecasts for SMEs in 2021.

• Cashflow – Seventy percent of business owners reported they experienced cash flow difficulties last year. Therefore, it is no surprise that cash flow forecasting shot to prominence in 2020 and will remain critical this year.
• Contingency Planning – In 2020, the year’s events prove that a cash cushion is a necessary survival tactic. Some advisors have advocated a reserve of four months’ business running costs.
• Goodwill Worth It’s Weight In Gold– Business relationships assumed even more importance in 2020, with SMEs relying on customers, employees, and advisors. 2021 will be all about paying it forward.
• Technology As An Asset – A positive impact of the pandemic has been upgrading digital knowledge and capacity. PrimeAdvisory upgraded all technology in it’s boardroom and is running more online meetings with it’s clients. While there is no substitute for a conversation over coffee, there is no excuse for not having one due to Covid restrictions.