The biggest challenges facing small- and medium-sized accounting practices (SMPs) worldwide are complying with regulations and standards and attracting new clients, according to the 2014 IFAC® Global SMP Survey. Conducted annually, the Global SMP Survey provides unique insights into the challenges and opportunities facing SMPs around the world.
“IFAC is committed to building the capacity of SMPs worldwide, and the findings from our SMP Survey are critical to that mission,” commented IFAC CEO Fayezul Choudhury. “Understanding the challenges that SMPs and their clients face, both on a regional and global scale, helps IFAC and our member organizations better serve this important constituency and accurately represent them in our interactions with regulators, standard setters, and policy makers.”
The key findings from the 2014 IFAC Global SMP Survey include:
Challenges Facing SMPs
- Keeping up with regulations and standards (57%) and attracting new clients (58%) were identified as the two greatest challenges facing SMPs worldwide. Pressure to lower fees (51%), rising costs (50%), and differentiating from the competition (50%) were nearly tied as the next biggest challenges.
- Attracting new clients was found to be a key concern in the Middle East (80%), but much less of a concern in North America (33%) and Australasia/Oceania (36%).
- Regulatory concerns ranked highly at firms in Central and South America (68%), the Middle East (65%), and Europe (63%).
Challenges Facing SME Clients
- Rising costs (67%) and economic uncertainty (66%) were identified as the top two challenges facing SME clients.
- This was especially apparent in the Middle East and Africa, where these challenges were ranked higher than any other region.
Percentages in the above represent respondents rating these challenges as a “high challenge” or “very high challenge.”
Performance and Outlook
- SMPs show promising economic growth, with 72% of firms maintaining or growing the previous year’s practice fee revenues (31% reported that practice fee revenues stayed the same, 37% reported a moderate increase, and 4% reported a substantial increase).
- Australia/Oceania (63%), North America (56%), and Africa (55%) ranked as the top three regions reporting moderate to substantial growth in practice fee revenues.
- Tax (48%) and advisory/consulting services (50%) were projected to be the two biggest sources of revenue growth for the year ahead. (Percentages represent respondents rating these services as “increase moderately” or “increase substantially.”)
“It is encouraging to see SMPs maintaining or growing their revenues as they are a crucial part of the global economy,” said SMP Committee Chair Giancarlo Attolini. “With solid performance this past year, and optimism regarding revenue growth in the coming year, SMPs reflect the current state of the global economy and the spectrum of opportunities for small businesses.”
The year-end 2014 survey, which is being undertaken in collaboration with lead researchers from the University of Dayton in the US, received 5,083 responses from 135 countries, and was conducted in 21 languages. For full results of the IFAC Global SMP Survey, expected in March 2015, please visit and subscribe to SMP updates from: www.ifac.org/SMP. Due to different response rates in different geographic areas, results may not be statistically representative of global or regional populations of SMPs. IFAC wishes to thank the many member and regional organizations that helped with translation and distribution of the survey.
About the SMP Committee
The SMP Committee of the International Federation of Accountants (IFAC) represents the interests of professional accountants operating in small- and medium-sized practices (SMPs). The committee develops guidance and tools and works to ensure the needs of the SMPs are considered by standard setters, regulators, and policy makers. The committee also speaks out on behalf of SMPs to raise awareness of their role and value, especially in supporting SMEs, and the importance of the small business sector overall.
About IFAC
IFAC is the global organization for the accountancy profession, dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. It is comprised of more than 175 members and associates in 130 countries and jurisdictions, representing approximately 2.5 million accountants in public practice, education, government service, industry, and commerce.