BANKER/ACCOUNTANT INTER‐RELATIONSHIP MANAGEMENT AND FINANCIAL ADVICE PROVISION IN THE UK SME SECTOR

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Abstract
Two common causes of failure in the UK SME sector are under‐capitalisation and poor financial management skills. In theory the objective of the banking and accountancy professions should be the provision of external advisory services that enhance the management of the financial aspects of the business. Delivery of this objective could contribute to increasing small firm survival rates. A survey of South West SME firms reveals that although owner/managers see benefits in utilising the expertise of their accountants, banks are openly distrusted and there is a preference for minimising contact with the banking community. A parallel survey of accountants and bankers confirmed these attitudes and also indicated that accountants may reinforce the owner/manager behaviour to limit the quantity of financial information which is made available to the bank. If the banking and accounting segments of the UK financial services industry adopted a strategy of actively co‐operating with each other, the quality of external advice made available to smaller enterprises would be greatly enhanced.

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