Small and medium sized accountancy practices (SMPs) have a global reputation as leaders in the delivery of professional advice. This arguably provides them with an excellent platform for delivering additional support to clients seeking to expand into international markets.
A wide breadth of professional advice and support is used by internationalising SMEs, who tend to reach out to different sources as they move along their internationalisation journeys. Government or relevant public agencies (39%) are the most widely used source of professional advice, closely followed by lawyers (35%) and then banks (33%).
Accountants are most likely to be used by SMEs when looking for support on international tax, regulatory compliance, foreign exchange and accessing external finance.
The diversification question: do practices stick or twist?
Many SMPs are considering their own future strategic direction as new technologies, growing competition and deregulation threaten their existing business models. Some practices see it as a high risk to change a proven business model, but international trade is an area that could lead to new service provision.
And the evidence is pointing in that direction:
- more SMEs are participating in international trade thanks to developments in value chains, e-commerce and other technologies
- SMPs are already leaders in the delivery of professional advice
Understanding the SMEs
However, for those practices interested in offering additional international advisory provision, they first need to understand how SMEs value relevant advice.
Our research found that there is a wide range of reasons for why SMEs participate in international markets:
- 45% - accessing new customers in foreign markets
- 35% - increased profitability
- 33% - faster business growth
- 30% - accessing new business networks
Meanwhile, foreign regulations were frequently cited by SMEs and practices as among the most significant barriers towards internationalising.
ACCA author - Ben Baruch
Four imperatives for practices wanting to offer additional international support to their clients
When looking to offer international advisory services, SMPs can gradually adapt their business models. However, this requires practices to use resources more efficiently, proactively expand their external networks and think strategically about which specific client services will generate demand.
"SMPs looking to take advantage of international opportunities may need to think strategically about their approach to networking."
SMEs: The finance foundations come first
SMEs see the capacity of their business as the most significant internal barrier to internationalisation. ‘Capacity’ is often connected with certain risks associated with expansion, including staff ability to respond to new workloads and increased numbers of processes, as well as limited access to financial capital.
1. Create a business strategy with global ambitions
2. Adopt cloud technologies from the start
3. Develop the scalability of the finance function
4. Identify where external advice could support the SME's international journey