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
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Growing Your Practice
Session 4
George S. Willie, IFAC SMP Committee
Member
WB-IFAC SMP Regional Forum
Vienna
Wednesday, May 31, 2017
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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
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Top Issues: Global Survey –
Impacting Practice
Top Global Challenges 2016 vs. 2015
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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
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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
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Ongoing Technology and Cyber Issues
Regulatory Complexity
Cyber Threats
Changes in How We Work/Job Uncertainty
External Forces Driving Change
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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
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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?
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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)
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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
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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.
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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.
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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
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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.
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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
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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
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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
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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
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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.
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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