29 May 2014 02:12pm

Nearly half of accountancy practices have no business plan

Although many practices advocate the importance of a business plan to SME clients, it seems that 48% of accountancy firms are not taking their own advice

Almost half of all accountancy firms have no business plan, with the number increasing to 62% of practices with up to five staff, and 71% of sole traders.

Despite this, the research, conducted by software producer Exact, found that 75% of accountants had helped clients to form a business plan.

Lucy Fox, general manager, UK cloud solutions at Exact, said she was surprised by the findings and added that it was a case of accountants “failing to practice what they preach”.

“Not enough sole traders and small accounting practices appear to see enough value in a business plan for their own businesses," she said.

“Business plans can take a huge amount of time to do and, just like any other small business, time isn’t something a lot of smaller practices have.

“As a result, many view it as a burden rather than an investment that helps to map out, and ultimately achieve, business goals.”

The report also found that a high number of practices – almost 75% – offered bookkeeping as a service; for 15% bookkeeping represents in excess of 50% of annual revenue.

Fox explained that this focus was preventing accountants from turning their attentions to “value-added services”, including giving business advice and consultations.

“Bookkeeping is an attractive service to many practices because it generates a recurring revenue stream, which can be easily commoditised,” she said.

“While it should be seen as an on-going base mechanism to keep clients retained, it shouldn’t be seen as your key earner.

“Bookkeeping clients, just like any other of SME clients, have business and finance challenges which accountants are perfectly positioned to advise on and provide for.”

Oliver Griffin

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