Almost half of Australian businesses are feeling the pinch of escalating costs while the number struggling to fill vacancies has shot up by around 50% according to the Australian Bureau of Statistics’ latest report on Australian business conditions.

Add to that soaring interest rates and the persistent effects of the pandemic - including skyrocketing energy costs and supply chain disruptions - and it’s no wonder small to midsize businesses in particular are facing a challenging year.

Banks working in conjunction with accountants will play a critical role in helping SMBs stay afloat, according to Westpac New Zealand institutional & business banking general manager Reuben Tucker.

“Accountants and bankers need to be trusted advisors to their customers,” he says. “They have to be inside the customer's tent at key moments, which can include great times during periods of opportunity, but also more stressful periods where businesses are under real pressure.

“They need to ensure they’re asking the right questions, challenging in a very positive way and being supportive to customers across a range of different industries and business types.”

Protecting businesses

Helping SMBs optimise their working capital is one of the key ways they can support customers through an economic downturn.

“It’s critical for business owners to understand how they can protect themselves against some of the domestic and international factors that impact the way working capital is deployed in their business,” says Tucker. “A lot of that comes from good planning, but it's impossible to have an absolutely accurate forecast in an uncertain environment. Bankers and accountants can help SMBs understand the key levers of control they have over their business as well as things they can't control.”

“Bankers and accountants can help SMBs understand the key levers of control they have over their business as well as the things they can't control.”

SMBs that have embraced digitisation now have the ability to leverage real-time financial data to help them make informed business decisions, but Tucker says banks and accountants still have an important role to play. “We need to make sure small businesses are using their data well and have a close understanding of the changes in timing of cash flows as the economic environment evolves.”

Enduring relationships

While there are no quick fixes for the economic challenges the world is facing, SMBs that build strong and enduring relationships with both financial institutions and accountants are more likely to successfully ride the inflationary wave.

“Many people can be good advisors through the good times, but it takes an exceptional advisor to provide genuinely meaningful advice that can make a significant difference to a small business going through a difficult period. That includes making sure we take a longer term view of the challenges facing our customers. Economic environments are always finite in length, so it's really important for us to keep our customers and ourselves focused on the horizon as well as on some of the near-term challenges we may be mutually going through.”

Find out more

For details on how Westpac can work with accountants to help their clients visit westpac.com.au