Intuit QuickBooks advisor strategy head Meagan Wood details how fashion retailers benefitted from their accounting advisors during the pandemic.
Small business owners wear a lot of hats.
From director of first impressions to coffee run co-ordinator to managing director, they’re time poor and stress rich, particularly off the back of a year slayed by a pandemic.
When it comes to fashion businesses, many have experienced a rollercoaster of a year with bricks-and-mortar footfall decreasing, eCommerce booming, state restrictions constantly changing, and many experiencing supply chain and delivery issues.
These sorts of challenges have meant people look for emotional support in unusual places, like their accounting advisors, who offer not just fiscal guidance, but a shoulder to cry on.
When we recently surveyed small businesses as part of our Intuit QuickBooks Advocating for Advisors research, more than half of small business owners (51%) 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 $45.3 billion in the last year alone, through access to grants, investment guidance or from other financial advice.
Additionally, close to six in ten (57%) admitted they would have struggled to keep going without the support of their advisor and half (50%) of small business leaders told us they lent on their advisor for ‘emotional support’.
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.
Importantly, both benefits were extended to 2023 in the recent Budget announcement.
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.
That’s something that the small businesses we recently surveyed 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% 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 in the retail sector establishing a relationship with an advisor.
No business is too small for an advisor – especially if you want to grow or stay in business.
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.
Tax time is the most logical time to realise the benefits an advisor can bring to your business but the value they bring shouldn’t end there.
From meeting your compliance obligations, to providing business development advice to help you achieve your business goals, to a shoulder to lean on when things get tough – an advisor relationship is the gift that keeps on giving all year round.