Small Business Matters is a research program of the Institute of Chartered Accountants in England and Wales (ICAEW), which investigates the types of business support that can be met by the valuable business-accountant relationship.
Our first report, The 99.9%: Small- and Medium-Sized Businesses, takes a close look at the small business community and their use of accountancy services. We found significant differences between sole traders and micro-businesses, which are often classed together for regulatory purposes under both EU and UK law, however, businesses in all size bands overwhelmingly report an accountant as their most trusted business adviser. Big companies are big news, but they are not the majority. Micro-companies, sole traders, and small- or medium-sized business all look to grow in different ways, as shown in the infographic accompanying the report on our website.
Additional key findings from the report include:
- The most popular services used by small businesses are accounts preparation (65%), tax services (62%), bookkeeping (32%), audit (28%), business advice (25%), and a review of the financial statements (14%).
- Nearly a quarter, which is more than I was expecting, of small businesses feel that audit should be mandatory for businesses like them. Just over half disagree. If the definition of a small company in the UK is increased to the maximum (as set out under the 2013 EU Accounting Directive), for example, increasing the threshold for small companies from £6.5m to £10.4m annual turnover, only 0.2% of UK companies will be directly affected showing how small most small businesses are.
We have created archetypal profiles, also available on our website, to represent typical characteristics for each sized band to better understand each group's support needs:
- Sole trader;
- Micro-business;
- Small business; and
- Medium business.
To further investigate the attitudes of small businesses, we are currently conducting in-depth interviews with business owners on the themes of audit, types of service, incorporation, and their relationship with their accountants. If you would like to receive updates on our research in this area, please contact James.Baglin@icaew.com.
Please have a look at the report and resources on our website. Do you have any comments on our research or conclusions to date?
