Insights on Small- and Medium-Sized Practices

Source: IFAC

In this article, Giancarlo Attolini and Paul Thompson share insights from the IFAC Global SMP Survey. The survey had over 6,725 respondents, making it one of the largest surveys of accountants. The survey, suggest Attolini and Thompson, serves as an indicator of overall health of the global economy.

SME (Small- and Medium-Sized Entity) Clients

• The top challenges facing SME clients included economic uncertainty, rising costs, competition, and difficulty obtaining financing.
• About 75 percent of respondents said their SME clients were engaged in some international business — commonly import or export activities and more often in the Middle East than elsewhere.
• Forty-one percent of respondents said SME clients' profits had decreased over the past year.

Challenges for SMEs

• Respondents said their most pressing challenges included attracting new clients, keeping up with new standards and regulations, and differentiating themselves from the competition.
• Of eight environmental factors that might impact firms over the next five years, the top three cited were regulatory environment, competition, and technology developments.

SME Performance

• The majority of SMEs' revenue stayed the same or increased moderately from 2014 to 2015.
• More than one-third of respondents anticipated increased fees in 2016.
• Most respondents offer some type of consulting service. The advisory services offered most frequently were tax planning and corporate advisory, including mergers and acquisitions, valuations, and legal issues.

Associations

• Respondents said the top three benefits of being part of a network, association, or alliance were attracting new clients, broadening client service offerings, and branding and marketing.
• Only slightly more than 25 percent of respondents said they belong to a network.
• Twenty-four percent of SMEs said they were considering joining a network or association.

For the complete entry, read “IFAC Global Survey Gives Insights into Challenges, Opportunities, Economic Health of Small- and Medium-Sized Accountancy Practices and their SME Clients.”

From IFAC, Global Knowledge Gateway, April 19, 2016, www.ifac.org.