Accountants Fail as Business Advisors

Australia has 2.2 million businesses, of which 2,065,523 are defined as small businesses (employing less than 19 people). The ATO statistics show 96.7% of businesses use a registered tax agent to lodge their business tax returns.

So, with 96.7% of businesses using a registered tax agent, why are 260,000 small businesses failing every year? It really comes down to three factors:

1. The majority of business clients get no business advice from their accountant – just the standard compliance services of bookkeeping, accounting, BAS and tax preparation.
2. Of those rare businesses that receive some business advice from their accountant, it has no impact on the business’s success or failure rate as the advice is not up to standard.
3. Small businesses receiving business advice and failing to implement. As Rob Nixon (formerly of Panalitix and also a co-founder) would say ‘they are suffering from FTI – failure to implement’.