From accountant to adviser

The accountant’s role must therefore switch from a compliance orientation toward forward-looking cash management, real-time performance monitoring and decision support amid uncertainty.

The survey shows that half of businesses are already actively reviewing spending plans, while others are pausing investment or freezing hiring. These responses, however, can sometimes be reactive rather than strategic.

So how might accountants change the focus?

Cost analysis

First, through structured cost analysis including cost mapping and transparency. Many SMEs lack visibility over their true cost drivers. With labour (50%), energy (44%), insurance (39%), raw materials/supplies (37%), fuel (37%) and property rent/leases/mortgages (34%) leading the cost increases, according to the survey, a detailed breakdown of fixed versus variable costs is critical.

As business advisers, we can assist these small firms to develop contribution margin analysis, segmenting costs by product, service or customer, and introducing activity-based costing where appropriate.

There is always a danger that across the board cost reductions can damage long-term capability. We should help clients instead to identify non-value-adding activities, process inefficiencies and duplication across functions. With operating costs having returned to or exceeded previous peaks, efficiency gains, not simply cost reductions, are essential.

Lean thinking

Second, the data highlights widespread pressure across multiple cost categories: labour, energy, materials and regulatory costs. This suggests a strong opportunity for accountants to embed lean thinking principles into SME advisory services.

Key areas for intervention include improved inventory management to reduce overstocking and obsolescence, identifying bottlenecks and rework within operations, and reviewing supplier agreements (particularly in relation to energy, insurance and materials).

As labour remains one of the biggest pressures for SMEs, the full cost of hiring and retention needs to be considered: recruitment, training, employer PRSI, pension obligations, holiday pay, sick pay, benefits and overtime. The solution may not automatically mean a headcount reduction and should focus on process efficiency through improved scheduling, productivity, pricing and staff utilisation.

In practice, many SMEs may not fully recognise these inefficiencies without structured analysis. Accountants are well positioned to translate financial data into actionable insights.

Cash and capital

Cashflow is now the central concern. The survey shows increasing reliance on short-term finance, combined with significant difficulties in accessing it. This creates a concerning imbalance: rising working capital needs paired with constrained access to funding.

In response, accountants can support clients by introducing rolling cashflow forecasts, over a 13-week horizon, regularly updated based on real trading conditions, and incorporating best- and worst-case scenarios. A strong emphasis should also be placed on working capital management, particularly debtor collection cycles, stock turnover and supplier payment terms. Small improvements here can significantly extend liquidity buffers.

Ongoing monitoring is equally critical. Early warning signs such as declining cash conversion ratios, increasing reliance on overdrafts and instances of profit without corresponding cash generation should be actively tracked to identify emerging financial stress at an early stage.

Technology can support this process, and accountants are well placed to advise on appropriate tools. When used effectively, including through AI-enabled applications, these can enhance transparency by facilitating real-time reporting, strengthening cashflow monitoring and supporting the automation of invoicing and collection processes.

Risk reluctance

The survey, understandably, reveals a cautious SME sector characterised by risk aversion, with many businesses reluctant to take on debt despite financial pressures. Accountants can help small clients prepare their funding proposals, creating clear and realistic business plans rather than underdeveloped requests focused on urgent working capital requirements.

Perhaps the most important insight from the survey is implicit: many SMEs require greater support in navigating increasingly complex financial decisions. A notable proportion of businesses report difficulties accessing finance, as well as uncertainty as to the most appropriate funding strategies for their circumstances.

Acting as a sounding board, accountants can support business owners in navigating that uncertainty and making informed financial decisions (see Building Resilience box). Research also shows that where accountants act as mediators between SMEs and finance providers, access to finance increases.

Role shift

With Irish SMEs operating in a sustained high-cost environment, with growing exposure to liquidity risk and reduced financial buffers, this is a defining moment for accountants. The core competencies of the profession – financial analysis, control, and planning – are exactly what SMEs need, but the application of those skills must adapt to evolving circumstances.

Current challenges create a clear opportunity, and indeed responsibility, for accountants to shift from reporting to advising, from retrospective analysis towards forward planning, and from a compliance-focused relationship towards one grounded in strategic partnership.

By focusing on driving efficiency, eliminating waste, actively managing cashflow and building resilience, accountants are well positioned to guide SMEs from short-term survival to long-term sustainability.