Small enterprise relations with banks and accountants

Through the dual analysis of small business‐owner relations with their banks and accountants, this paper aims to address conflicting interpretations of how small business owners may optimise their banking relationships.

Site visits were made to 49 small firms which had been recruited from a random sample of 500 New Zealand firms that employed up to 50 full‐time equivalent staff. An interview was then carried out with the owner‐manager of the firm.

The study identifies four bank relationship types: serial switching, independence, relationship chasing, and switched off. Consistent with previous research, dissatisfaction with existing relations is frequent but switching is infrequent. Rather than switch bank, the predominant reaction is to reduce the use of bank services. The disadvantage this creates is offset by the development of a closer relationship with business's accountant.

The findings are limited in their ability to be generalised due to the research methodology and research context. However, the conclusions will be of interest to researchers and managers in banks and accountancy firms.

The paper addresses a gap in the knowledge base surrounding enterprise‐bank relationships. Whereas most previous research has focused on the small enterprise‐bank relationship, the present study includes the relationship between small enterprises and accountants based on the assumption that they can offer similar advice and support.