An outdated perception of accountants as “bean counters” could be hampering business owners from revealing all their financial information to their accountants, a new study has shown.
The study, at Nottingham Business School, found that owner-managers risked poor cash-flow management and making decisions based on inadequate financial information because they did not want anyone else to know their business.
The research, titled Management Accounting Practices of UK SMEs, recommends that accountants should improve their image by tackling this old fashioned view head on – by promoting themselves in business partnering roles and better educating business owners.
Report co-author, professor Malcolm Prowle, said: “It is up to organisations like CIMA and accountants themselves to educate business people and promote their advisory and consultancy capabilities.
“Some entrepreneurs, in particular, are reluctant to employ management accountants, expressing a desire to maintain control and have exclusive access to information they consider sensitive.
“They believe the process of crunching the numbers themselves gives them superior insights and greater control. This could effectively result in higher costs in terms of management time – time which might be better spent developing the business in other areas.
Professor Prowl is now pressing for further studies into the way SMEs reach critical decisions and into the psychological profile of executives, particularly owner-managers, be undertaken.
We will watch with interest!