In March 2013 CCH commissioned a major research project designed to illuminate the nature of the relationship between SMEs and their accountants. In separate surveys – one of small business owners and the other of accountants primarily servicing small business - we probed the attitudes of both groups to key aspects of business success, the role of accountants in the management of small businesses, and the attitudes of both toward cloud computing.
Motivating the study was a clear sense that momentum in the move toward cloud-based platforms has gained pace rapidly in recent years. This has coincided with a marked shift in the cost-benefit equation around cloud solutions in favour of the Cloud, as cloud systems become more common and their benefits apparent. But what does this shift mean for SMEs and accountants? How will it alter the traditional relationship between the two groups? And what threats and opportunities does it present?
Australia's SME sector comprises some two million enterprises contributing more than $310 billion to the economy and employing close to five million people. While it is often said small business is the engine room of the economy, it is more accurate to say successful small businesses makes up this engine room.
Against this backdrop any insight into how SMEs and the business advisers they trust most (accountants) are embracing Cloud technology, and how they see this technology improving business performance, is welcome.
CCH is pleased to present a summary of its research in this report.
Research methodology
The two online surveys were conducted in parallel. The first probed 1,018 business owners, or decision-makers, of organisations with 200 employees or fewer. The second gathered responses from 212 accountants, or principals of accounting firms, that service SMEs.
Fieldwork commenced on Friday, 8 March and was completed on Thursday, 21 March, 2013.
After interviewing, SME data was weighted to the latest business count estimates sourced from the Australian Bureau of Statistics.
The research was conducted by Lonergan Research.
Summary of Research Findings
Conclusion
CCH's research confirms the shift onto cloud-based software platforms for accounting services is well underway. Uptake has now reached significant levels among accountants and small business owners, and is particularly high among younger groups. Future intentions indicate that within two to three years, a majority of SMEs and their accountants will be performing accounting on the cloud.
For the accounting profession, the transition to cloud-based computing presents some immediate threats, and many more long-term opportunities.
The Cloud will automate much of the low-level, administrative services that accountants have provided to SME clients for so long. This is not lost on business owners, who indicate they will consider replacing much of the work their accountant currently performs with cloud software. A good number also say they will consider replacing their accountant if he or she does not embrace a cloud platform. And this preference for the Cloud rises sharply among younger groups of business owners.
In CCH's view, the path for the accounting profession is a natural one. By embracing a cloud-based system now and bringing their SME clients with them, they retain their central role in the business life of their clients.
But the benefits go further. The connected, transparent interface offered by a cloud system gives both far greater visibility into the business, not just retrospectively but also into the future. It represents a powerful tool allowing the business owner and their accountant to engage anew in strategic planning around the business and, in doing so, reset the professional relationship.
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