A recent report by the Association of Chartered Certified Accountants (ACCA) has revealed the crucial role that accountancy firms have had in enabling SMEs to stay afloat during the pandemic and the continued support they will provide in a post-Covid world.
In its most recent report, Responsible Practice Pacesetters, which surveys almost 50 global SMP (small medium-sized practice) leaders, ACCA found how regional accountancy firms, including those in Carmarthenshire, have acted as a safety net for SMEs and microenterprises trying to rebuild and steer their way through mandatory lockdown measures. The financial impact of the crisis has been immeasurable on businesses, with many facing disruption to supply chains, staff shortages and restricted commercial activity.
SMEs are a fundamental pillar of the economy. The World Bank estimates they make up 90 percent of businesses globally and more than 50 percent of employment worldwide.
The study shows how agility and innovation have contributed to an unprecedented mobilisation of the SMP community; with accountancy firms working round the clock to keep businesses afloat, all the while facing their own challenges, such as a lack of staff, delayed payments or the physical difficulty in conducting audits. The report also demonstrates how SMPs, now more than ever, provide a vital link between SMEs and the ecosystem they must navigate.
Janet Collins, FCCA, Director at LHP Chartered Accountants in Carmarthenshire, said: “85% of our clients are SMEs and over the past six months or so, many have experienced delays in banks setting up accounts and have been unable to claim grants available. We have worked closely with each of them, advising on compliance issues, government assistance options, recovery, change of business model and provided advice on software to run their business more efficiently. We have also put them in touch with trusted finance providers and other advisors such as HR.
“We will undoubtably face further disruption to business as we steer our way through this uncertain period and implement Welsh Government guidelines, in particular SMEs could experience reduced cash flow and a business slowdown forcing many to review staff requirements and potentially scale back activity. By working with ACCA and SMPs, however, we can ensure all SMEs are aware of their business’s financial health and have access to every possible support source so that smaller businesses can make the right decisions in these changeable times and the effect on them is minimal.”
The report author and ACCA’s head of SME professional insights, Aleksandra Zaronina-Kirillova, said: “SMPs are a key part of the financial health system for the SME sector. They have proven to be the ‘emergency services’ to small businesses during the Covid-19 pandemic; providing enhanced business support and access to finance, enabling SMEs to contribute to overall economic growth. However, they also have a much broader and impressive role in society, which often remains untold, so we wanted to shine a light on these aspects by publishing this report.”
Other highlights from the study reveal how smaller accountancy firms contribute to the wider community and society, including supporting the charity and not-for-profit sector and playing a leading role in transforming SMEs into robust businesses which behave ethically and responsibly. SMPs also help foster financial literacy among both individuals and organisations in their communities, enhancing financial competence among small business owners, promoting both entrepreneurship and personal responsibility.
Find out more at accaglobal.com