The aim of this research study is to determine whether perception gaps exist between accounting service providers and small business, by identifying variables considered by both groups when considering outsourcing internal accounting activities, and how these perceptions align. Research on small business behaviour is used in many industries to improve the quality of service to the small business consumer. This research proposes a theoretical framework that identifies three dependent variables consisting of decision, benefit and impact factors, and fifteen independent variables influencing each of these factors.
Based on a review of extant literature, there is little evidence that research on the subject of outsourcing finance and accounting activities within Australia has been conducted thus far and, as a result, many questions remain unanswered.
While the reviewed literature discussed the decision, benefit and impact factors of outsourcing (particularly finance and accounting outsourcing), it failed to identify differences between perspectives of both parties involved in the outsourcing arrangement. Distinguishing between these different perspectives is important, as it identifies likely perception gaps between the service provider and the small business client.
Differences of perception are significant, as they impact upon the expectations of small business and how the service provider satisfies the needs and wants of the small business client within the outsourcing arrangement.
The study involved data collection from two sub-groups. Service provider participants were sourced from a national organisation whose members provide finance and accounting services to small businesses, with 34 service provider respondents drawn from a sample population of 61 participating. Small business participants were randomly sourced from a national database, with 71 respondents drawn from the selected population of 314 taking part. These sub-groups were considered reliable and representative of the population of both groups as a whole.
Multiple aspects of available research methodologies were examined in conducting this study. These included research design; construct and item generation; data collection methods; and data analysis.
The epistemology employed for this study adopted a positivistic/hypothetico, deductive approach using a web survey research method to provide valid, reliable and practical data to identify the perceptions of accounting service providers and small business owner/managers in relation to finance and accounting outsourcing decision factors. This study not only identifies the decision, benefit and impact factors of finance and accounting outsourcing, but also identifies, compares and contrasts the perceptions of accounting service providers and small business owner/managers.
The research study was confined to accounting service providers and small businesses operating within Australia, and was conducted during the period July to October 2007. It should be noted that responses may vary if the survey were replicated in the future.
Cross tabulations and frequency analysis were used to compare and contrast responses relating to decision, benefit and impact factors. Questions were assessed by using a sevenpoint Likert scale utilising statistical analysis to compare the mean of responses by each group, and examining these responses in respect of the mean of each total. SPSS Version 14 was used to analyse the data.
Findings emanating from this study confirm an alignment of perceptions and a consensus by both respondent groups concerning outsourcing activities, benefits to small business, and impacts on small business. This also gives accounting service providers knowledge of a specific set of factors impacting upon small businesses in relation to outsourcing decision making, benefits and impacts.
In particular, this study provides first-hand information to accounting service providers (as frontline practitioners), to the effect that they should actively collaborate and communicate with small business clients about their finance and accounting activities.
Lack of prior research, (particularly within Australia) regarding outsourcing decisions by small business demonstrates a need for further in-depth research that should focus on both the developing and changing face of business, and the relationships between small business and accounting service providers.
Research on finance and accounting outsourcing identifying and comparing factors impacting upon the decision process is important to and useful for theory building, as well as providing practical implications. Not only will this enhance the literature, it can also provide a useful benchmark for real-world practice, as small businesses need to be competitive in order to survive within a more open international business environment.
This research contributes to the body of knowledge by providing a theoretical framework for accounting service providers and small businesses to further explore issues examined in this study. While this research focused on identifying differences between perceptions by two respondent groups, further research linking these factors to the outsourcing activity should provide a wider view of the issues involved. This in turn will assist towards building a better understanding of the cause-effect relationships between different variables within the finance and accounting outsourcing area