Performance moderate but remain optimistic, despite concerns over economic slowdown.

Accountants working in small- and medium-sized practices (SMPs) are generally optimistic about performance in 2016, as a majority predict that revenues will stay the same or increase across all service lines, according to the latest IFAC Global SMP Survey results. However, optimism is not at the same level as a year ago as growth projections across service lines have dropped since 2014.

While performance expectations decreased from a year ago, SMPs indicate that their challenges are somewhat less acute that last year. As n 2014, the most pressing challenges for SMPs in 2015 were; attracting new clients (47% high or very high challenge), keeping up with new regulations and standards (44%), differentiating from the competition (43%), and pressure to lower fees (41%).

The 2015 IFAC Global SMP Survey receives 7,725 respondents, representing 169 countries and more than 800,000 SME clients around the world, making it the largest survey of SMPs. The survey was conduction October-November 2015 in 22 languages.

It is well recognized that professional accountants are a preferred source of advice for SMEs, typically forming long-term relationships founded on trust, SMEs account for the vast majority of businesses globally and, in most jurisdictions, account for the majority of private sector GDP, employment, and growth.

(New York, New York, February 29, 2016) – Accountants working in small- and medium-sized practices (SMPs) are generally optimistic about performance in 2016, as a majority predict revenues will stay the same or increase across all service lines, according to the latest IFAC Global SMP Survey results (full report and summary). However, optimism is not at the same level as a year ago as growth projections across service lines have dropped since 2014.

While performance expectations decreased from a year ago, SMPs indicate that their challenges are somewhat less acute than last year. As in 2014, the most pressing challenges for SMPs in 2015 were: attracting new clients (47% high or very high challenge), keeping up with new regulations and standards (44%), differentiating from the competition (43%), and pressure to lower fees (41%).

The 2015 IFAC Global SMP Survey received 6,725 respondents, representing 169 countries and more than 800,000 SME clients around the world, making it the largest survey of SMPs. The survey was conducted October–November 2015 in 22 languages.

It is well recognized that professional accountants are a preferred source of advice for SMEs, typically forming long-term relationships founded on trust. SMEs account for the vast majority of businesses globally and, in most jurisdictions, account for the majority of private sector GDP, employment, and growth.

“Collectively, this is a large and important sector whose views are important to hear,” said IFAC CEO Fayez Choudhury. “The health of the SME sector is a barometer of the vitality of a nation’s economy and of global trade and commerce at large. Listening to SMEs through their accountants—who know them well—is a critical exercise that allows IFAC and its member organizations to better support them, which in turn supports stability and growth more broadly.

Additional key findings from the survey include:

SMPs recognize the value of offering business advisory and consultancy services

  • A significant majority of respondents provide some form of advisory services, with tax planning (52%), corporate advisory (45%), and management accounting (41) being the most common

SMEs face a number of challenges, with economic uncertainty consistently topping the list

  • Consistent with 2014, the top challenges facing SME clients were economic uncertainty (61% high or very high challange) and rising costs (58%).

Looking ahead, competition and regulatory developments will continue to be dominant factors in the SMP business environment.

  • Consisten with 2014, the regulatory environment (52% high or very high impact) and competition (46%) topped the list of environmental factors most likely to impact SMPs over the next five years, followed by technology developments (43%).
  • “For the second consecutive year, SMPs have predicted that technology and regulatory developments will have the biggest impact on them in the future; they will need to be nimble and adapt in order to remain competitive,” said IFAC SMP Committee Chair Giancarb Attolina. “While changes in technology are inevitable, we need to contributing to the development of international standards that are stable, relevant, and can be applied in a manner proportionate to the size of the entity or practice. And, as a profession, we need to help SMPs and SMEs adapt and prepare for changes by continuing to listen, develop guidance, and encourage knowledge sharing so they are well positioned to thrive in the future”The survey design and reporting were undertaken in collaboration with Sarah Webber and Donna L. Street, lead researchers from the University of Dayton (US). IFAC wishes to thank the many members and regional organizations that helped with translation and distribution of the survey. See the full results, including breakdowns by region and size of practice, and subscribe to receive SMP updates, on the IFAC website.