According to OnPay’s State of Small Business 2020 survey, 62% of small business owners think their companies will return to normal by the end of this year — 66% of small business employees feel the same.
But, that optimism comes with some uncertainty as small businesses nationwide navigate uncharted waters. They’ve likely had to make some tough choices during the COVID-19 pandemic including downsizing their workforce, pausing performance-based wage increases, and making pay cuts.
Our survey, which looked at how the pandemic has changed the way businesses approach payroll, HR, and finance, was answered by more than 1000 small business owners and 1000 employees. In addition to revealing the hope coming from small business owners, it also showed that the accountants’ trusted advisor role has expanded.
Specifically, accountants and bookkeepers have stepped up to help small businesses with COVID-19-related relief programs and navigate these uncertain times. Not only have they helped unlock sources of government and private financial relief, but accountants have also been busy advising clients on how to reduce expenses and save money when times are tight.
Accountants played an important role in mitigating COVID-19’s initial impact
Last year, respondents to our 2019 Small Business Finance and HR Survey said accountants are small business owners’ most trusted advisors for wide-ranging business advice — more than lawyers, bankers, friends, and family. However, only 30% of small business owners use an accountant. But, like so many other things, COVID-19 might change that as well.
Because accountants are typically small business owners’ go-to professionals for advice about a variety of business concerns, the pandemic has underscored just how important they are. Nearly half (48%) of our 2020 survey respondents said advice from their accountant was important when it came to applying for and getting government relief, particularly the Paycheck Protection Program (PPP).
Over the last several months, that advisory relationship has helped small business owners not only better see the value of their accountant’s expertise, but it’s also boosted their optimism overall. Whether they have an accountant appears to be a factor in how a small business believes it will fare in the months to come. Those utilizing an accountant are more likely to expect an increase in revenue this year, according to our 2020 survey.
Accountants will be essential through an unprecedented tax season
Accountants play a key role in helping companies navigate the complex tax forms in any year, but this season will require unprecedented assistance when it comes to the loans and tax credits provided through the CARES Act — not to mention deciphering the updated Form 941.
One-third of small business owners used the Social Security tax programs available through the CARES Act. As the 2021 tax season rolls around, they’ll likely need help to show they met the criteria for the refundable payroll tax credit and prepare for any delayed Social Security payments due in 2021 and 2022. And, as guidance is likely to further evolve in the coming months for many of these government funding programs, accountants will play a crucial role in monitoring those requirements.
Bottom line: this year’s State of Small Business survey confirms that accountants continue to be the essential advisor for the majority of small businesses, particularly as they move forward in the current economic environment.
See more results from this year’s survey here: State of Small Businesses in 2020.