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.
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.”)
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.