A small business' work is never done, as the old saying goes.
Well, perhaps that’s not quite how the saying goes, but it’s certainly how we know it can feel. Particularly after the type of year we’ve just been through.
When we recently surveyed small businesses as part of our QuickBooks Advocating for Advisors research, more than half of small business owners (51 per cent) say they increased their reliance on their accounting advisors to help manage the impact of COVID-19. In doing so, the surveyed small business owners are estimated to have made and saved a cumulative $45.3bn in the last year alone, through access to grants, investment guidance or from other financial advice. Close to six in ten (57 per cent) admitted they would have struggled to keep going without the support of their advisor.
After turning to government support to get by during a hugely difficult period, many small businesses now find themselves faced with additional considerations at tax time. For example, some stimulus payments that became available to small businesses during COVID-19 were taxable - such as JobKeeper - but others - such as the cashflow boost - were tax exempt. In addition, new rules were introduced around what you need to pay, as well as what you can claim.
While there are additional complications to navigate, it’s certainly not all bad news. Under the JobMaker plan, the temporary full expensing incentive was introduced to stimulate growth and provide tax deduction opportunities for small businesses. There’s also the opportunity to claim back tax paid in previous years if you find yourself running at a loss this year, freeing up much-needed cash.
As with the COVID stimulus packages that the government offered to small businesses, if you have a clear understanding - or have someone on your side who can advise you - the returns can be significant. It’s yet another example of why having an advisor on your side at tax time can be well worth it.
That’s something that the small businesses we recently surveyed as part of our Advocating for Advisors research seemed to agree with. Those with an advisor relationship are three times more likely to feel positive about the more complicated end of financial year and tax preparation period that we’re headed into than those without.
Despite this, our own research tells us that as many as 30 per cent of SMBs don’t engage an advisor. And there are three key reasons why. They either don’t think their business is big enough to warrant it, they don’t want to pay for an advisor full time, or they’re not sure where to find one.
In reality, none of these concerns should stop a small business establishing a relationship with an advisor. No business is too small especially if you want to grow or stay in business, you can find one that suits your needs at our Find a ProAdvisor and while tax time might be the most obvious time to think about talking to an advisor, it’s certainly not the only time of the year they’ll add value to your business.
The value an advisor can bring to your business extends far beyond meeting your compliance obligations. Many become like friends. Half (50 per cent) of small business leaders told us they lent on their advisor for ‘emotional support’ during the pandemic and the uncertain, anxious and tumultuous time it represented. As Kemal, owner of Atez Electrics, a small business that was battered during Victoria’s lockdown last year, put it, when talking about his advisor, Lauretta Finis: “She’s been like my counsellor – really going above and beyond.”
Tax time is the most logical time to realise the benefits an advisor can bring to your business but the value they bring doesn’t have to end there. From meeting your compliance obligations, to providing business development advice, to a shoulder to lean on when things get tough - an advisor relationship is the gift that keeps on giving, all year round.
Meagan Woods is Advisor Strategy at Intuit.