Firms must overcome a range of challenges in the coming five years to ensure their long-term survival.
In the current economic climate accountancy firms face an array of challenges, from new binding regulations, to increasing competition within the sector.
Research published as part of the International Federation of Accountants' (IFAC) Global SMP Survey for 2016 has now revealed the extent to which small to medium-sized practices (SMPs) must adapt their strategies in the coming five years, warning that failure to offset these risks could impact the long-term viability of many businesses.
Based on the responses of more than 5,000 SMPs in 164 countries, the report found that the number one challenge for accountants at present lies in 'attracting new clients', as global competition continues to rise – an issue for 46 per cent of respondents.
In joint second place for SMPs was 'keeping up with new regulations and standards' and 'experiencing pressure to lower fees' (41 per cent). This was followed by the 'ability to differentiate themselves from their competition' and 'rising costs' (both at 39 per cent).
Other risk factors that made it into the top ten included:
• development of new technology
• serving clients operating internationally
• personnel and staffing issues managing cash flow and late payments
• retaining existing clients and succession planning
Overall, IFAC's report highlights the wide range of issues that organisations will need to overcome to ensure stable and long-term development in the coming years.
With almost half of all respondents now pinpointing the need to bring in new business, more effectively manage their finances and adapt to a changing regulatory landscape, addressing these key risk factors must now be a priority.
You can find IFAC’s survey report at http://www.ifac.org/publications-resources/2016-ifac-global-smp-survey-report-summary