Accountants linked to better business performance

Read about recent research that shows how advice and expertise from accountants helps improve business performance at companies around the world.

A recent IFAC report summarizes the findings from various research papers on the relationship between accessing accountancy expertise and business performance for two groups of companies: small- and medium-sized entities (SMEs) and large entities. It addresses the various measures used to operationalize accountancy expertise and business performance.

Key findings

Small and medium-sized enterprises (SMEs):

  • Growing SMEs make the most use of external advice.
  • Advisory services have a positive impact on startups.
  • Enterprises using an external accountant saw an 8.1 per cent average increase in sales growth and a 29 per cent decrease in the likelihood of failure.
  • Companies using accounting services saw growth in employees, assets and turnover/sales.
  • More than 50 per cent of the SMEs with no written budgets saw sales decrease, while 75 per cent of SMEs with detailed budgets saw sales increase.
  • Under the guidance of an external advisor, adopting environmentally friendly practices internally leads to organizational, financial and human capital benefits.

Large entities:

  • The professional identity of management accountants is evolving with roles relating to business integrator, business partner/advisor, change agent and decision enabler. Management accountants also contribute to cost efficiency and value creation.
  • The main functions of management accounting are providing information on results and past performance, facilitating decision-making and directing staff behaviour.
  • Companies with CFOs focused on risk management, decision support and “transformed” accounting functions perform better.

High-performance businesses are more likely to report high levels of satisfaction with their finance function and have CFOs with higher strategic influence.