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Enhanced Practice Management

& New Services

Giancarlo Attolini

Chair IFAC SMP Committee

Bologna

October 14, 2014

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Agenda—Expanding the range of SMPs Services

• Practice Management

• Technology Developments

• Trusted Business Advisor

• New Service Offerings

• References

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Practice Management — General

• The SMP has developed resources to help SMPs in their

practice management activities

• The main resource is the Guide to Practice

Management for Small- and Medium- Sized

Practices

• Other resources

– Practice Management section on

www.ifac.org/Gateway

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Implications for SMPs—Practice Management I

• Specialization/ niche

– Develop capability to offer and market new services

– Choose fields where firm has high degree of industry and/or

technical understanding

– Choose fields big enough to justify spending on marketing and

gaining specialist knowledge

– Consider offering your firm as an adviser to second-tier firms,

whose clients want top-tier specialist expertise

• Networking

– Forge alliances/network with other practices

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Implications for SMPs—Practice Management II

• Pricing

– Consider value over time-based – 77% Gateway poll respondents

said it will be the pricing strategy of the future

• Invest in people

– Develop technical and soft skills (branding, marketing, selling,

negotiating, etc.)

• Marketing

– Use social media (e.g., Twitter, Facebook, LinkedIn)

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Implications for SMPs—Practice Management III

• Accounting, compilation & other non-assurance / related

services (33%) is fastest growing source of revenue for

practices (IFAC SMP Quick Poll 2013)

• Opportunities

– Technological advances enable practices to profitably provide

outsourced accounting services

– Rapid change and increasing complexity are driving up demand for

outsourced accounting services

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Technology Developments I

Three Mega-Trends

• Digitization (cloud computing)

– Paper to paperless to boost productivity

• Virtualization (systems of engagement)

– Physically present to virtually present to improve market reach

• Transformation (business intelligence)

– Compliance provider to trusted advisor to enhance value

– On-demand reporting, business analytics, dashboard graphics,

target market segment benchmarking and advisory services

(discussing how best to respond to revealed issues)

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Opportunity, Threat and Challenge

• Technology is part of step change in accounting

• Technology = opportunity – the future of practice

• Technology = threat – commoditization, DIY

• Challenge is how to implement technological change

Technology Developments II

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Opportunities Presented by Technological Change

• Profitable outsourced client accounting services (CAS)

• Expand geographical scope

• Real-time round the clock service

• Time and resource available for analysis and advice

• Rapid change and increasing complexity are driving up

demand from clients for outsourced accounting services

Technology Developments III

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Technology Developments IV

Digital Enablers

• Help improve practice efficiency and move client

interactions online

• Smartphone apps

– Wi-Fi Finder, Evernote, Feedly, Dropbox, Keeper, TripIt, XE

Currency, Uber, PrintCentral, The World Clock, HP12C & AirServer

• Video and instant messaging services

– Skype, FaceTime and Google Hangout

• Search engine optimization (SEO)

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Trusted Business Advisor—What it Means

• Understanding and listening to clients’ needs

• Using our broad experience/expertise to help clients

accomplish their goals

• Creating an ongoing relationship with clients

• Providing more than core accounting services

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New Service Offerings—Country Examples I

• Ireland (IFAC Board member)

– “If we do not provide bookkeeping services, we encourage the

client to purchase an accounts software package, then install it and

get it set up and then train the client on how to use it and to take

back-ups. Each year we review how they are getting on and attend

their premises to tidy up, before doing a year end procedure. The

“cloud” is the obvious next move for this service though it is a little

cost prohibitive for now. These are all value added services which

the client pays a bit more for and gets them more engaged with the

financial side of their business. Equally, we are not burdened with

quality control issues over low value bookkeeping services.”

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New Service Offerings—Country Examples II

• Australia (SMP Committee Member)

– “We aim to become the virtual CFO. We target companies which

are large enough to need planning, SWOT analyses, but not so

large to have their own CFO. Our role is to facilitate, engage in your

clients’ business and make an impact on their life – help them pay

off their house loans, pay kids school fees, plan for retirement”

• Brazil (SMP Committee Member)

– “SMPs have been supplying all kinds of services related to tax and

accounting issues—including complete outsourced accounting,

payroll & tax. Additional services related to evaluation, financial due

diligence, and outsourcing of administrative and financial routines,

are also an increasing market”

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• Sustainability Services Insights from IFAC SMP Quick Poll

– Mid year 2013

• 46% of practices offer sustainability services

• 27 % respondents current do not offer any sustainability

services but plan to in the future

• May be a growth area for practices

New Service Offerings III—Sustainability Services

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New Service Offerings IV—Review Engagements

• International Standard on

Review Engagements (ISRE)

2400 (Revised)

• The Guide to Review

Engagements available on

www.ifac.org/SMP

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New Service Offerings V— AUP

• Agreed-Upon Procedures (AUP) Engagements

• Based on the IAASB’s ISRS 4400, Engagements to

Perform Agreed-Upon Procedures Regarding Financial

Information

• Attractive and fast growing service

• The practitioner provides a report based on the factual

findings regarding financial information – no assurance is

expressed

• The report is not distributed publicly – it is restricted to

those parties that agreed to the procedures

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References—Business Advisory

• Gateway—embedded various topics: www.ifac.org/Gateway

• The Role of SMPs in Providing Business Support to SMEs research paper:

www.ifac.org/publications-resources/role-small-and-medium-practices-providing-

business-support-small-and-medium-s

• SMP Committee Business Advisory Interviews (Videos) IFAC YouTube Channel:

www.youtube.com/user/IFACMultimedia

• Good Practice Checklist for Small Business, 2e:

www.ifac.org/publications-resources/good-practice-checklist-small-business

• How to Build Your Business Advisory Practice article: www.ifac.org/publications-

resources/how-build-your-business-advisory-practice

• Sustainability: Challenges and Opportunities for SMPs and SMEs article:

www.ifac.org/news-events/2013-04/sustainability-challenges-and-opportunities-

smps-and-smes

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References—Practice Management

• Guide to Practice Management for Small- and Medium-Sized Practices, 3e

(incl. companion manual): https://www.ifac.org/publications-resources/guide-

practice-management-small-and-medium-sized-practices

• 7 Tips for Accountants on Supporting the Globalization of Small Business article:

www.ifac.org/news-events/2013-08/7-tips-accountants-supporting-globalization-

small-business

• Social Media Marketing May Be the Key to Practice Profitability article:

www.ifac.org/news-events/2013-10/social-media-marketing-may-be-key-practice-

profitability

• Tomorrow’s Firm and the Role of Value Pricing: IFAC Interview with Ronald J.

Baker article: www.ifac.org/news-events/2013-02/tomorrow-s-firm-and-role-value-

pricing

www.wcoa2014rome.com

See you in Rome in November 2014

www.ifac.org