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Growing Your Practice

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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.

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Growing Your Practice

  1. 1. Page 1 | Confidential and Proprietary Information Growing Your Practice Session 4 George S. Willie, IFAC SMP Committee Member WB-IFAC SMP Regional Forum Vienna Wednesday, May 31, 2017
  2. 2. Page 2 | Confidential and Proprietary Information Growing Your Practice in a Competitive and Fast Paced Evolving Profession  What Issues are Shaping the Future of the Profession?  What are Firms’ Priorities?  Are Practitioners Leveraging Available Opportunities?  How are Firms Keeping up with Today’s Dynamic Economic Environment?  What are the Opportunities for Growth  What Tools are Available - What Works (Success)  How Can Your PAO Contribute? “There is nothing more difficult and dangerous, or more doubtful of success, than an attempt to introduce a new order of things in any state.” – Machiavelli
  3. 3. Page 3 | Confidential and Proprietary Information Top Issues: Global Survey – Impacting Practice Top Global Challenges 2016 vs. 2015
  4. 4. Page 4 | Confidential and Proprietary Information  Succession, succession, succession...  Client retention and client acquisition remain a priority.  Human capital concerns: finding and retaining qualified staff are in the top five for all firm sizes with more than two professionals.  Keeping up with tax laws and new rules and regulations are the biggest concerns for small firms.  Seasonality and workload compression is now a concern for all firm sizes.  Owner/partner accountability and unity remain issues for larger firms. CPA Firm Top Issues in the USA – Survey
  5. 5. Page 5 | Confidential and Proprietary Information  Rapidly Evolving Technology and the Speed of Transformation  External Forces Driving Change  Surveying and Attracting New Clients  Retaining and Recruiting Talented Staff  Staying Competitive Challenges for Accounting Firms
  6. 6. Page 6 | Confidential and Proprietary Information  Ongoing Technology and Cyber Issues  Regulatory Complexity  Cyber Threats  Changes in How We Work/Job Uncertainty External Forces Driving Change
  7. 7. Page 7 | Confidential and Proprietary Information Key Factor for Success  Structure, Strategy and Business Model  Use of Technology  Client and Relationship Building  Staff Development and Culture  Proper Mindset  Methodologies and Tools to Achieve Your Firms Goals  Practice Strategies that Drive Capacity and Growth Preparing Firms for the Future – Sustained Growth “The key to growth is sustainability and the key to sustainability is strategy developments.” – Gale Crosby
  8. 8. Page 8 | Confidential and Proprietary Information  Strategic Planning o Embrace growth; narrow your focus and develop a niche strategy; grow in strength not size; grow from inside out; develop and follow business models.  Refinement: o Build your business around the right technologies and processes. Growth through refinement, a prerequisite for success.  Technology: o Address security and privacy concerns; adapt traditional services; utilize state-of-the- art tools to reach out to new markets.  Education: o Balance judgment with technical skills; teach soft skills; stay ahead of the curve on regulations and standards.  Globalization: o Understand international issues, trends, standards and regulations; identify new markets; explore new job opportunities. Embracing the Future – How Do We Do It?
  9. 9. Page 9 | Confidential and Proprietary Information  Promotion: o Market the profession’s virtues of integrity, objectivity and trust to local, national and international audiences.  Collaboration: o Understand the different perceptions and realities of the generations and find ways to bridge the gap and take advantage of the best each can offer.  Integration: o Review our competencies and align them with new realities; enhance our role as a business advisor.  Adaptation: o Address changes in the marketplace, economy, business and regulations; immerse ourselves in domestic and international trends.  Competition: o Understand the numerous choices available to clients. Embracing the Future – How Do We Do It? (Continued)
  10. 10. Page 10 | Confidential and Proprietary Information Practice Management—General  The IFAC SMP Committee has developed resources to help SMPs in their practice management activities  The main resource is the Guide to Practice Management for Small- and Medium- Sized Practices  Other resources – Practice Management section on the Gateway: www.ifac.org/Gateway
  11. 11. Page 11 | Confidential and Proprietary Information Guide to Practice Management for SMPs  Organized into eight stand-alone modules 1) Planning for Your Firm o Business and strategic planning processes & policies for development and implementation. 2) Practice Models and Networks o Structural considerations and models, profit sharing, and use of networks. 3) Building and Growing Your Firm o Building a business advisory practice, coping with regulation, and developing a firm culture.
  12. 12. Page 12 | Confidential and Proprietary Information Guide to Practice Management for SMPs 4) People Power: Developing a People Strategy o Leadership roles, staff retention, motivation and training. 5) Technology and e-Business o Effective selection, implementation, and management of tech. 6) Client Relationship Management o Development and ongoing maintenance of client relationships. 7) Risk Management o Framework for identifying, evaluating, and acting on risks. 8) Succession Planning o Valuation and pricing, mergers, internal and external buyouts.
  13. 13. Page 13 | Confidential and Proprietary Information Updated Academic Literature Review—Role of SMPs providing business support to SMEs  SMEs heterogeneous in size & growth intentions  Demand for Business Support – Size, Debt, Age, Growth, Resources – Economy, Regulation, Competition – Owner-manager Characteristics – Personal Factors—Trust, Perceived Service Value, Image IFAC Research
  14. 14. Page 14 | Confidential and Proprietary Information Implications for SMPs— Practice Management I  Specialization/Niche – Develop capability to offer and market new services. – Choose fields where firm has high degree of industry and/or technical understanding. – Choose fields big enough to justify spending on marketing and gaining specialist knowledge. – Consider offering your firm as an adviser to second-tier firms, whose clients want top-tier specialist expertise. – Create a culture that supports growth.
  15. 15. Page 15 | Confidential and Proprietary Information  Creating Value for SMEs through Integrated Thinking: the Benefits of Integrated Reporting <IR>  How Do SMEs Create Value?  <IR>: Promoting Integrated Thinking  The Multiple Capitals in an SME context  Using <IR>: All Things Considered  Invest in People  Develop technical and soft skills (e.g., branding, marketing, selling, negotiating, etc.) Implications for SMPs— Practice Management II
  16. 16. Page 16 | Confidential and Proprietary Information Opportunity, Threat, and Challenge  Technology is part of step change in accounting  Technology = opportunity—the future of practice – Cloud computing can reduce costs and increase agility  Technology = threat—commoditization, DIY – Parliament of New South Wales Report—Accounting Clerks have a 94.8% probability of computerization  Challenge is how to implement technological change – Concerns over cyber-security Technology Developments I
  17. 17. Page 17 | Confidential and Proprietary Information  Opportunities Presented by Technological Change – Profitable outsourced client accounting services (CAS) – Expand geographical scope – Real-time round the clock service – Time and resource available for analysis and advice – Rapid change and increasing complexity are driving up demand from clients for outsourced accounting services Technology Developments II
  18. 18. Page 18 | Confidential and Proprietary Information  AICPA Firm Global Connection  Worldwide Online Community of Peers  Resources for Any Firm Size - Tools in: – Human Capital – Customer Service and Client Retention – Marketing – Practice Growth & Client Acquisition – Succession Planning – Cyber Security – Specialized Training PAO Support
  19. 19. Page 19 | Confidential and Proprietary Information Overall Program Strategy  Integrate the accounting profession more prominently into the SMP business support environment and raise awareness of how professional accountants can supports SMEs.  Build the capacity of professional accountants and accounting practices to improve SME financial management and provide relevant business.  Build the capacity of the professional accounting bodies to support members.
  20. 20. Page 20 | Confidential and Proprietary Information Keeping It Simple and Relevant • Resources should be easy to replicate in a cost effective manner and adaptable to local conditions Providing Options • New Approaches • Technology • Niche Strategy • Flexibility • Training • Tools • Surveys Lesson/Summary
  21. 21. www.ifac.org/SMP

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