A majority of small businesses only look to their accountant for specific services and support in areas such as bookkeeping and taxes, instead of engaging the accountant as a full partner, according to a new survey.
The survey, by Sage North America, polled small businesses in both Canada and the United States, and found some stark contrasts. In Canada, the survey found that 39 percent of small businesses do not utilize an outside accountant, with the most common reason, cited by 73 percent of the 229 Canadian small business owners polled, being a preference to do the accounting on their own. However, the 61 percent of small business owners who look to outside accountants for their expertise mostly rely on them for accounting services (77 percent), bookkeeping services (53 percent), tax support (personal and corporate tax, 46 percent and 36 percent respectively), and payroll (34 percent).
In contrast, the U.S small business owners who were polled make far more use of external accounting services for business tax compliance (55 percent versus 31 percent) and financial planning/consulting (41 percent versus 25 percent) than Canadian small businesses. Canadian small businesses value an outside accountant's bookkeeping services substantially more than their U.S. counterparts (26 percent versus 5 percent).
"While the survey indicates that 90 per cent of small business owners realize that their outside accountant is critical to their success, most are not using these experts to their full potential," said Sage North America vice president of partner programs and channel sales Jennifer Warawa in a statement. "Accountants offer so much more than general accounting and tax services; they can provide critical guidance that can help take a business to the next level. All businesses, big or small, need a plan and a good accountant will partner with a business to examine all the data to help build a roadmap to success."
The survey also found that 42 percent of the small business owners surveyed said have been audited, with 84 percent stating that an outside accountant was “very helpful.” Most small businesses began using an outside accountant within the first year of operations: 30 percent “right at start-up,” 35 percent “within six months from start-up,” and 15 percent “six to 12 months from start-up.” Fifty-two percent of the small business owners polled said they found their outside accountant through a referral.
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