Small accountancy firms remain vital to SME Covid-19 survival
9 Sep 2020
To commemorate Small Business Advice Week, ACCA (the Association of Chartered Certified Accountants) produced a report outlining the importance of Smaller accountancy firms on businesses trying to survive the Covid-19 pandemic
9 Sep 2020
SMEs (small medium-sized enterprises) are a fundamental pillar of the economy. The World Bank estimates they make up 90% of businesses globally and more than 50% of employment worldwide.
Smaller accountancy firms, also known as small medium-sized practices (SMPs), are the most trusted advisers to the small business community – and provide a crucial lifeline to a sector vulnerable to business failure and poor governance.
In their latest report, Responsible SMP Pacesetters, which surveys almost 50 global SMP leaders, ACCA shows the importance of SMPs and why they act as a safety net for businesses trying to rebuild and steer their way through the Covid-19 pandemic.
The financial impact of the crisis has been immeasurable with many SMEs and microenterprises not being able to survive mandatory lockdown measures, which have not only forced disruption to supply chains, but caused staff shortages and restricted commercial activity.
The study shows how agility and innovation have contributed to an unprecedented mobilisation of the SMP community; with smaller accountancy firms working round the clock to keep businesses afloat, all the while facing their own challenges, such as a lack of staff, delayed payments or the physical difficulty in conducting audits.
The report also demonstrates how SMPs, now more than ever, provide a vital link between SMEs and the ecosystem they have to navigate.
So they not only guide their small business clients to the support available to them, but they also articulate their clients’ needs to diverse stakeholders, such as government, regulators and banks.
Other highlights from the study reveal how smaller accountancy firms also contribute to the wider community and society as a whole, including:
- Supporting the charity and NGO sector: SMPs make donations, fundraise and volunteer for charities. However, their biggest contribution is as accountants and business advisers - not just producing accounts pro bono but serving on boards and promoting good governance, financial accountability and best practice.
- Promoting the accountancy profession and social mobility: SMP leaders promote accountancy as a progressive profession to schools and colleges; offering training and apprenticeship opportunities often to underprivileged or excluded groups. In doing so, they create diverse practices, with a clear sense of mission and values.
- Financial inclusion and financial literacy: SMPs play a valuable role in fostering financial literacy among both individuals and organisations in their communities, promoting both entrepreneurship and personal responsibility. The adoption of digital technologies, in particular, is leading to a new era of engagement between SMP accountants and their clients, enhancing financial competence among small business owners.
- Sustainability and ethics: SMP accountants are playing a leading role in transforming SMEs into robust businesses, which behave ethically and responsibly. As trusted advisers, they can guide clients through complex reporting frameworks, carbon accounting and waste reduction; helping them become both economically and environmentally sustainable.
The report author and ACCA’s head of SME professional insights, Aleksandra Zaronina-Kirillova, said: ‘SMPs are a key part of the financial health system for the SME sector.
They have proven to be the “emergency services” to small businesses during the Covid-19 pandemic; providing enhanced business support and access to finance, enabling SMEs to make a contribution to overall economic growth.
‘However, they also have a much broader and impressive role in society, which often remains untold, so we wanted to shine a light on these aspects by publishing this report.
‘ACCA is a proud advocate of the SMP space and we aim to develop a robust global ACCA-SMP community.’