Small and medium sized practices diversifying for success
Versatility is key to small and medium-sized practices as they compete for survival says new report from ACCA.
The survey, named The Global SMP business model: understanding a changing profession, provides a unique insight into how the SMP business model is changing to adapt to a new reality. It is the first study to provide such a detailed map of the sector’s service offering, its growth prospects and the source and value of its diverse skills.
Reacting to the findings, Rosana Mirkovic, ACCA head of SME policy says: ‘While at the global level, the SMP sector’s offering remains highly focused, with the core SMP offering still based on assurance, tax and compliance we can see that this core technical skill set is highly adaptable and transferable.
‘A number of routes exist to higher value-added offerings and SMPs are actively exploring these. For example, there is growing interest across markets in helping clients design and monitor internal controls as global supply chains demand accountability and transparency. This trend is likely to continue with our survey showing that over 70% of SMPs are planning to introduce a new service over the next two years.’
According to Rosana Mirkovic, deregulation can spur on SMPs to innovate, and in doing so become more resilient, as she explains:
‘It is a testament to the SMP sector’s resilience and adaptability that in countries where the impact of deregulation has been greatest, such as reduced reporting requirements and rising audit thresholds, practices have responded to this with innovation, radically expanding their service offering and exploring partnerships with other organisations.
‘In the UK and Ireland, for example, the SMP service offering was twice as broad compared to practices in the Asia Pacific, with the typical practice offering more than 20 distinct services.’
Deregulation may be more advanced in Europe, but it is underway around the world, says Rosana Mirkovic: ‘Our survey shows that practices have responded to this trend by diversifying their services but we also see that for this to be sustainable, practices need to be very strategic about their investment in new services. There needs to be a strong emphasis on generating client growth, referrals and repeat business.’
Fortunately, moving into value adding services does not mean building an entirely new skill set, Mirkovic goes on to explain: ‘The core technical skills of an accountant are proving to be highly transferable and adaptable but planning and commercial discipline is required. The finance profession has a big role to play in helping SMPs meet this new challenge and as such there is much to gain from sharing insights and best practice across borders.’
The survey was conducted by ACCA, with support from the Institute of Singapore Chartered Accountants (ISCA); Corpul Expertilor Contabli se Contabililor Autorizati din Romania (CECCAR); Malaysian Institute of Accountants (MIA); Chinese Institute of Certified Public Accountants (CICPA); and Vietnam Association of Chartered Public Accountants (VACPA). It looked at the value-added services to SMEs (small and medium-sized enterprises) by professional accountants.
Professionals who worked in practice in the UK, Ireland, Singapore, Hong Kong, China, Romania, Iran, Malaysia and Vietnam, were surveyed about their business models.