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Changing SMPs Business Model: Challenges and Opportunities

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IFAC and the World Bank Centre for Financial Reporting Reform hosted a joint Regional Small- and Medium-sized Practices (SMP) Forum for Europe and Central Asia on May 31 in Vienna, Austria.
The Forum provided the opportunity to discuss addressing the challenges and opportunities SMPs and medium-sized entities (SMEs) face. This presentation is by Mats Olsson, Deputy Chair, IFAC SMP Committee.

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Changing SMPs Business Model: Challenges and Opportunities

  1. 1. Page 1 | Proprietary and Copyrighted Information Changing SMPs Business Model: Challenges and Opportunities Mats Olsson Deputy Chair IFAC SMP Committee Global SMP Survey 2016 Results World Bank – IFAC SMP Forum May 31, 2017 Vienna, Austria
  2. 2. Page 2 | Proprietary and Copyrighted Information IFAC Global SMP Survey 2016 • Objectives – Visibility – Market intelligence • 5,060 respondents from 164 countries • 23 languages • Report & summary published March 2017 www.ifac.org/smp
  3. 3. Page 3 | Proprietary and Copyrighted Information IFAC Global SMP Survey 2016 – About I Respondents by Region 38% 28% 14% 7% 5% 5% 3% Europe Asia Africa Central and South America and Caribbean North America Middle East Australasia and Oceania
  4. 4. Page 4 | Proprietary and Copyrighted Information Country (Global) Responses China 493 India 417 Romania 365 Turkey 259 Canada 196 Poland 191 France 168 South Africa 150 Italy 142 Finland 134 IFAC Global SMP Survey 2016 – Top Countries
  5. 5. Page 5 | Proprietary and Copyrighted Information Country Responses Albania 18 Armenia 1 Azerbaijan 7 Belarus 2 Bosnia & Herzegovina 6 Georgia 1 Kosovo 7 Macedonia, TFY 3 Republic of Moldova 1 Montenegro 5 Serbia 5 Ukraine 12 IFAC Global SMP Survey 2016 – The 12 Countries Represented Here
  6. 6. Page 6 | Proprietary and Copyrighted Information IFAC Global SMP Survey 2016 – About II 35% 35% 10% 7% 12% Sole practitioner 2-5 partners & staff 6-10 partners & staff 11-20 partners & staff 21 or more partners & staff Respondents by Size of Practice
  7. 7. Page 7 | Proprietary and Copyrighted Information Respondents by Region by Practice Size Region Sole practitioner 2-5 partners & staff 6-10 partners & staff 11-20 partners & staff 21 or more partners & staff Africa 41% 39% 9% 6% 5% Asia 26% 35% 11% 10% 18% Australasia & Oceania 45% 30% 5% 5% 14% Central & South America & Caribbean 27% 38% 14% 9% 11% Europe 37% 36% 9% 6% 12% Middle East 34% 35% 15% 9% 8% North America 57% 22% 9% 3% 9% IFAC Global SMP Survey 2016
  8. 8. Page 8 | Proprietary and Copyrighted Information Partner, Owner, or Sole Propriet or 76% Director 7% Senior Manager 5% Manager 7% Other 5% 2% 16% 28% 29% 18% 7% Respondents By Age Under 25 25-35 36-45 46-55 56-65 Over 65 IFAC Global SMP Survey 2016 – About III Position Level of Respondents in Practice
  9. 9. Page 9 | Proprietary and Copyrighted Information Top 3 Challenges For SMPs (high/very high) Challenges 12 Countries Cluster Europe (%) Global (%) Attracting new clients 43 47 46 Experiencing pressure to lower fees 37 41 41 Keeping up with new regulations and standards 30 47 41 IFAC Global SMP Survey 2016 – Highlights I
  10. 10. Page 10 | Proprietary and Copyrighted Information Factors Most Impacting SMPs Over the Next Five Years (high/ very high) Challenges 12 Countries Cluster (%) Europe (%) Global (%) Political instability 62 41 40 Regulatory environment 57 62 56 Perceived trust and credibility of the profession 50 49 43 IFAC Global SMP Survey 2016 – Highlights II
  11. 11. Page 11 | Proprietary and Copyrighted Information Fee Revenue Increases 2016 (Across Service Line) Note: For the 12 countries & the greater Europe, the highest growth is still in advisory & consulting services. Region/ Countries Percentage of Firms 12 Countries Cluster 19 - 40% Europe 23 – 32% Global 30 – 35% IFAC Global SMP Survey 2016 – Highlights III
  12. 12. Page 12 | Proprietary and Copyrighted Information Forecasted Fee Increases for 2017 Service Line 12 Countries Cluster (%) Europe (%) Global (%) Accounting, Compilation & NAS 57 37 44 Advisory & Consulting 52 38 45 Tax (incl. Compliance & Planning) 41 31 42 Audit & Assurance 41 25 38 IFAC Global SMP Survey 2016 – Highlights IV
  13. 13. Page 13 | Proprietary and Copyrighted Information Business Advisory & Consulting Services (More Common Services) Type of Business Advisory 12 Countries Cluster (%) Europe (%) Global (%) Management accounting 56 41 46 Human resources/ employment regulation 47 40 30 Corporate advisory 46 52 48 Restructuring/ insolvency/ liquidation 22 29 24 IFAC Global SMP Survey 2016 – Highlights V
  14. 14. Page 14 | Proprietary and Copyrighted Information SME Client Challenges Challenges 12 Countries Cluster (%) Europe (%) Global (%) Economic uncertainty 66 66 61 Difficulties in accessing finance 60 52 51 Rising costs 53 59 59 Competition 49 57 53 IFAC Global SMP Survey 2016 – Highlights VI
  15. 15. Page 15 | Proprietary and Copyrighted Information Top 3 Technology Challenges For SMPs (high/very high) Technology Challenges 12 Countries Cluster (%) Europe (%) Global (%) Investing in and staying current with Software 44 45 38 Determining what technology is best for the practice 37 40 36 Achieving a digital, paperless environment 35 38 37 IFAC Global SMP Survey 2016 – Highlights VII
  16. 16. Page 16 | Proprietary and Copyrighted Information Top 3 Personnel & Staffing Issues For SMPs (high/very high) Staffing Challenges 12 Countries Cluster (%) Europe (%) Global (%) Retaining qualified staff (all levels) 40 40 41 Finding qualified staff (all levels) 38 47 45 Technical training 31 34 35 IFAC Global SMP Survey 2016 – Highlights VIII
  17. 17. Page 17 | Proprietary and Copyrighted Information • Practice Utilization Percentage (of less than 50%) – Global: 12% – Europe: 8% – The 12 countries cluster: 20% • Firm’s Receivables Collection Period (most common practice) – Global: 0-59 days (59% of respondents) – Europe: 0-59 days (66% of respondents) – The 12 countries cluster: 0-59 days (65% of respondents) IFAC Global SMP Survey 2016 – Highlights IX
  18. 18. Page 18 | Proprietary and Copyrighted Information IFAC Resources • IFAC SMP Committee: www.ifac.org/SMP • Follow us on Twitter: @IFAC_SMP • IFAC Global SMP Survey: Publications & Resources on the IFAC website • Join us on LinkedIn: IFAC SMP Community • Global Knowledge Gateway: www.ifac.org/Gateway
  19. 19. www.ifac.org

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