• Firms

    Survey Says: Over Half of Small Businesses Don’t Work With an Accountant At All

    By | February 20, 2015

    Here's an interesting discovery from Xero: 53 percent of small businesses they surveyed "say they don’t work with an accountant at all." So not only are all firms the same, they're not crucial to fledgling businesses?

    Is this an opportunity or a barrier? Go.

    • Management Assertion

      Go where?
      The people who most need help are the least likely to seek it.

      • Spectrum

        This. And when they finally get in so deep they can’t avoid it any more, it costs them so much to fix it that they vow to never hire one ever again.

    • JessterCPA

      It’s an opportunity.

      Most of these people I would guess simply don’t want to pay for an accountant. If we show them value, we can probably get the work.

      More of an issue are people/businesses who have REALLY BAD accountants doing their work, in order to save on accounting fees. This is where most small businesses really get in trouble.

      • Jonathan

        Exactly. I know some small business owners, and they desperately need an accountant. Like you said, it’s just a matter of showing the good things that an accountant can provide. And it’s more than just proper taxes. Controls, bookkeeping, analytics…not to mention freeing up the owners to do the thing they went into business for.

        Since entering school, I’ve always thought that small businesses are an opportunity. It’s just a matter of connecting with them.

    • Spectrum

      The question I get the most as an accountant is, “Why would I need an accountant? What can you do for me?” How do you explain something like the new repair regs to someone who doesn’t understand they are supposed to capitalize things to begin with? The value of the $500 de minimis election or cost segregation is lost on someone who does their own taxes and just wrote off the entire addition they put on their rental building as a “repair.”

      • The Horniest Partner

        and there’s a 99% chance nobody will ever question the “repair” as an expense item. A good friend was real aggressive with his taxes and used a shady guy who wrote off the cost of his $30K newly finished basement as part of home office deduction.

        • Spectrum

          “Aggressive.” The ultimate tax euphemism.

          • N.E.R.D.

            It’s not criminal unless you’re caught!

            I should know! I know a guy…who uhhh…ummm…knows a guy who does this kind of stuff.

            • iamthelolrus

              And if you get caught, you have to pay what, a 10% penalty? I’m assuming that fraud is impossible/not worth it to prove on this small of a scale.

          • dumpus

            basis = proceeds.
            Denny Crane

        • Guešt

          I knew a shady guy who started off conversations with tax clients by asking how much they wanted back.

          I think he was joking. Maybe

          • JustAnotherCPA

            He wasn’t joking.

    • FartDude

      Smells like opportunity, especially if you don’t mind working with morons.
      At minimum, plenty of small businesses probably need tax help.
      A lot probably need bookkeeping help, whether they realize it or not, to ensure that bills are getting paid and customers are being billed properly.

      • JustAnotherCPA

        Don’t need a CPA to do your bookkeeping. That’s what’s known as “overkill.”

    • Jack

      Most likely the other 47% who do work with an accountant are working with one who doesn’t know what the hell they are doing. I swear, some of the crap I have seen “CPAs” put out makes you wonder if they got their certificates out of a Cracker Jack box.

    • Bloviator

      Not much opportunity here. These are the cheapskates who don’t want to pay and the meatheads who are incapable of benefiting from anything accountants can offer. Sourcing good clients takes patience and a lot of digging. You can’t pull them from a Xero survey.

      • LikeABoss

        This. I went from a large firm down to a local firm to be closer to my home, and this place is full of baby business clients that fight with us constantly over everything – especially the bill. Yeah there’s plenty of opportunity if you have a lot of patience and don’t like making a lot of money… otherwise, there’s plenty of things you can do with your time.

    • nefarious

      70% of small businesses have less than 5 employees. Plug and play bookkeeping and tax software will probably do all the work for they need.