ACCA Global Forum for SMEs demands coordinated government support for hardest hit businesses
Members of the forum are supporting ACCA’s call on governments around the world to review economic rescue packages, emphasising that SMEs are paramount for social and economic health of the community. As a vital part of the global value chains, SMEs should be put in the spotlight of the rescue schemes.
Access to support schemes is uneven across different countries, with SMEs in developing countries feeling the hardest hit as resources are often scarce, limited or inaccessible.
Rosanna Choi, chair of the forum, said: ‘We need a collective coordinated effort, with governments, international organisations and business communities mobilised to rescue SMEs. As trusted advisers to SMEs, small and medium-sized practitioners (SMPs) are at the forefront of small businesses support.
'Technology is essential to ensure adequate levels of support. Those of us running accountancy practices have been working round the clock to help SME clients transform and survive, but our work needs to be backed by vigorous support packages and grants for SMEs.’
The call comes after the forum debated ACCA’s Covid-19 global survey, The Road to Recovery, sharing their views on the effectiveness of SME support measures undertaken in response of the global pandemic.
The survey data shows that small and medium enterprises (SMEs) hardest hit by Covid-19 are suffering in a number of key areas. For example, they face greater challenges with stopped or reduced customer purchases and cash flow relative to larger organisations, with almost 60% of SMEs now citing customer purchases as having stopped or been reduced.
Cash flow is following a similar trajectory, with over half of SME respondents (53%) indicating this is now a problem. This is of particular concern given the range of support measures introduced by governments to help SME financing and cash flow challenges.
Only 33% of SME respondents consider governments support measures as effective.
Call for action
Members of the ACCA Global Forum for SMEs call for the following action to support SMEs:
- Governments, international organisations (IOs), and technical assistance providers should take collective coordinated action to provide financial and technical support for SMEs in the medium term and to support the recovery and resilience of the businesses in the long term. We need a robust international SME support ecosystem.
- Governments should facilitate the dialogue between the profitable businesses (that are least affected by Covid-19) and the harder hit small businesses, promoting best practice recovery information sharing for them, with easily accessible B2B support schemes in place.
- Transparent channels of communication that enable the dialogue between small businesses representatives, governments and IOs should be in place to ensure the support offered actually responds to the needs of the SMEs.
- Governments and IOs should provide clear instructions on where and how to get access to the support available.
- Governments should involve accountants and accountancy practices in discussions related to SME support schemes. Accountants are assurance providers to SMEs, they have an important role in supporting SME survival and have the robust financial data about the current state of small businesses. As part of the small business segment, accountancy practices also should have the opportunity to directly benefit from government support schemes.
- Technology is essential in supporting future resilience of the SME sector. Governments should provide technical assistance and funding for SME digital transformation to ensure robustness of the SME sector and its preparedness for any potential future shocks.
Eriona Bajrakutaj, UK member of the global forum, said: ‘Despite the fact that the accountancy practices play a vital role in supporting SMEs during this crisis situation, they have been left outside of the scope of the government support scheme.’
Eilis Quinlan, Republic of Ireland member of SME Global Forum, said: ‘We need more grants for SMEs to ensure their future survival.’
Robert Belle, Kenya member of the forum, said: ‘If economies are to be restarted, then it must happen with focus on the micro, small and medium enterprise (MSME) ecosystem. While each entity may not have a large turnover, the MSME sector is an ecosystem and the ripple effect and aggregate impact is widespread. In Kenya, they account for more than 30% of employment, with a McKinsey report showing this is 40% across Africa. Also, there is just a special bolt of radiating confidence in a society when an MSME weathers a storm and recovers.’
More information about the ACCA Global Forum for SMEs can be found here