Abstract:
Small accounting practitioners have been identified as the most important small business advisors; unfortunately, research suggests that small business owners do not necessarily obtain the expected benefits from the relationship. Previous studies have indicated that the types of services that SMMEs source from their external accountant and the way in which these services are offered to SMMEs play an important role in the relationship. It is however still unclear how these factors contribute to such owners’ perceptions of the benefits they obtain. In response, the purpose of this study was to develop a predictive model which will, firstly, provide guidance to these owners regarding the services they need to source from their accounting practitioners, in order to improve the benefits; and secondly inform the latter about small business clients’ expectations of service quality and how to improve their service delivery concomitantly, to supply the expected benefits. The study therefore analysed the perceptions of 422 small business owners using structural equation modelling. Results confirm that their perception of benefits obtained is dependent upon both the frequency with which SMMEs source different services from their accountants and the latter’s ability to offer high levels of service quality. The study supports previous findings that small business owners perceive the services relating to annual financial statements to be of limited benefit. It was found that SMMEs that frequently source other routine accounting services, tax related and general advisory service obtain higher levels of compliance and management benefits. It is therefore advised that small business owners more frequently source these services. Based on the significant positive relationship between the levels of service quality and the perceptions of both compliance and management benefits, it is suggested that small accounting practitioners put effort into enhancing their levels of service quality to small business owners, specifically with regard to reliability and responsiveness.
