Accountants in small and midsize practices around the world face staffing and tech challenges
Accountants working in small- and medium-sized practices (SMPs) around the world are facing heightened staffing challenges, according to the latest IFAC Global SMP Survey results. While attracting new clients, keeping up with new regulations/standards, and pressure to lower fees remained key challenges faced by SMPs, attracting new/retaining existing staff made the top four challenges for the first time since the survey was conducted in 2011.
Additionally, the anticipated impact of technology developments over the next five years increased substantially in 2016 over 2015. Staying current with new hardware and software, as well as moving to the cloud, topped the list of technology challenges.
Despite these challenges, SMPs’ future performance expectations increased slightly from a year ago in three of the four service areas, with the exception of tax. Growth is expected to be driven by advisory/consulting services, along with accounting, compilation, and other non-assurance/related services, with 45% and 44%, respectively, predicting fee revenue increases in these areas in 2017.
“The ever-increasing pace of technological change represents both a challenge and opportunity for SMPs,” said IFAC CEO Fayez Choudhury. “As trusted business advisors to small- and medium-sized entities or SMEs, a sector critical to global economic stability and growth, SMPs need to consider how they can best leverage technological advances to reduce costs and offer value-added services to meet clients’ changing demands and expectations. In addition, SMPs that keep pace with developments in technology are likely to do better in attracting, retaining, and nurturing talent.”
Additional key findings from the survey include:
SMPs recognize the value of offering business advisory and consultancy services.
- A significant majority of respondents provide some form of advisory services, with corporate advisory (48%), management accounting (46%), and human resource/employment regulations (30%) being the most common.
SMEs continued to be challenged by economic uncertainty and rising costs.
- Consistent with 2015, the top challenges facing SME clients were economic uncertainty and rising costs (with 61% and 59%, respectively, rating these as a high or very high challenge).
SMP performance in 2016 improved slightly over 2015.
- In 2016, 30% or more of SMPs reported moderate or substantial increases in fee revenue across services areas, compared to 27% or more in 2015.
Some regions, countries, and larger SMPs were not well represented in the survey results; caution should be exercised when attempting to generalize survey results to specific countries or regions, or SMPs of all sizes. See the full results, including breakdowns by region and size of practice, and subscribe to receive SMP updates, on the IFAC website: www.ifac.org/SMP.