SAFA-IFAC Regional SMP Forum
8-10 October, 2014 at Hotel Le-Meridien, New Delhi, India
Presented by:
Abdul Wasey Khan Sherani, FCMA
Honorary Secretary, ICMA Pakistan
Enhanced Practice Management
and New Services
Practice Management
•Practice management covers a wide array of professional services
that are required for running a successful accounting practice.
•The professional services cover both operational and strategic areas
such as marketing, networking, pricing, HR management, practice
development, succession planning, compensation strategies,
recruiting and retention, billing and collection, administration,
leadership, and more.
•The theories, techniques, approaches, and tools of practice
management share much in common with those in managing a
business. Practice management is likely to get more sophisticated as
the practice of SMPs grow.
Small and Medium-sized Accountancy Practices (SMPs)
•SMPs constitute the vast majority of accountancy practices worldwide and
employ majority of professional accountants working in practice.
•SMPs in many countries account for majority of private sector GDP,
employment and growth.
•SMPs provide high-quality professional services to meet a wide range of client
needs, which ranges from well-established services, such as audit, accounting,
and tax, to value-adding business advisory services.
SMPs provide their professional services in a customized and personal manner.
For these reasons, SMEs often seek a broad range of professional services from
SMPs.
Definition of SMPs
SMP definition varies from one jurisdiction to another. According to IFAC, SMP
is an accounting practice/firm that exhibits the following characteristics:
•its clients are mostly small and medium-sized entities;
•external sources are used to supplement limited in-house technical resources;
•the majority of client work may be non-assurance services;
•it employs a limited number of professional staff and
•it executes less formal quality control procedures.
Small and Medium Enterprises (SMEs)
•SMEs are a vital and integral part of the global economy and account for the
vast majority of businesses globally.
•SMEs constitute an overwhelming majority of private sector enterprises in
developed and developing economies.
•According to the OECD, SMEs account for the majority of private sector GDP,
employment, and growth as well as large share of new jobs worldwide.
•SMEs are a major source of entrepreneurship and innovation. They hold the
key to the global economy’s continued recovery from one of the most severe
downturns in modern times.
•SMEs have assumed role just like multinationals and manufacture products
and provide services and sell to customers and clients around the world.
SMPs services to SMEs as Business Adviser
SMEs are the traditional clients of SMPs and they value SMPs as one of the
trusted sources of business advice for improving their competence and
integrity.
SMPs are becoming an important catalyst to SMEs to help them in following
ways:
•Perform in a more effective and efficient way
•Assist in compliance with the rules and regulations,
•Provide business support and advisory services
•Play a pivotal role in SMEs’ financing needs.
No
Business
Development
Corporate
Advisory
Wealth Creation
& Preservation
Tax
Consultancy
Management
Accounting
1.
Strategic
Business
Planning
Business
restructuring
Financial Position
Evaluation
Tax Advice
Budgeting
2.
Budgets and
Projections
Valuations
Investment
Strategy
Development
3.
Sustainable
business
practice
Litigation
support
Asset Allocation
Cost
Accounting
4.
Virtual CFO
Forensic
Accounting
Succession
Planning
Profitability
Analysis
Debt/Equity
funding
Pension Planning
5.
Representation Management
on tax matters
Reporting
Changing Role of SMPs
•SMEs are increasingly demanding a broader range of professional services,
especially value-added business advisory services from the SMPs.
•SMEs want SMPs to provide proactive business advisory services that could
help them in generating business plans and financial forecasts, identifying and
managing risk, defining and implementing IT systems, and value the business.
•SMPs must evolve to meet the growing needs of SMEs and review their level
of knowledge, training and management strategies in meeting these demands.
•SMPs need to equip themselves with the necessary skills and knowledge to
satisfy the growing need of SMEs for business advice.
•SMPs need to develop capacity and overcome the challenges lying ahead due
to the changes in market and regulatory dynamics.
•SMPs need to develop more effective communication networks, involve
themselves in strategic decision-making and focus on sharpening analytical
skills of their staff.
•SMPs should adopt new services or ways of delivering those services and also
invest in the development of new services
Enhancing Client Relationships through Innovative means
•Strong and effective client relationships is the backbone of successful
accounting firm and the clients are fundamental to the value of SMP firms
•SMPs should maintain and enhance their client relationships to survive in
today’s competitive market environment. They should develop and implement
strategies to better know and build relationships with clients.
•SMPs should identify opportunities to deliver additional value added services
to help the clients successfully run and operate their businesses. In the long
run, this would help the SMPs in shape of satisfied clients but also in
maximizing their income.
•SMPs should establish relationships with other professional firms, both
accountancy and non-accountancy, such as legal, HR, and IT firms, to meet
client needs that fall outside their area of expertise. This way SMPs can
leverage resources and help convince clients that they have the capability of a
much larger practice.
•SMPs can look into the possibility of joining an accounting network or
association, or merging with another practice, to further leverage economies
of scale and synergies.
Providing enhanced Services to export-oriented SMEs
•SMPs can provide proactive support to those SMEs who intend to export their
products and services to international markets. SMPs can help them locate
potential markets overseas and to improve their capabilities.
•SMPs can develop knowledge and information resources to guide SMEs as to
how to meet the requirement for international documentations and access
funding sources.
•SMPs can establish relationships with banks and financial institutions related
to trade financing so as to assist the SMEs in getting the required funding..
•SMPs can provide value-added advice to the SMEs in managing foreign
exchange risks and forecasting currency needs.
•SMPs can provide service as a catalyst in connecting SME clients with each
other to create mutually supportive environments and information channels.
Innovative Marketing Services to enhance practice growth
•SMPs should enhance practice growth through marketing services so as to
provide efficient services to SMEs.
•SMPs should proficiently market their professional services e.g. business
advisory and other types of assurance services, that they can offer to SMEs.
•SMPs should train and develop existing staff to implement marketing
strategies to make new clients and improve services to existing clients.
•SMPs can hire external marketing or PR consultant to develop a plan and
strategy to position the firm and expand outreach to the target clients.
Embracing new technologies to improve service quality
•SMPs should enhance practice growth through adoption of advance information
technology (IT) so as to provide efficient services to SMEs. They need to improve their
understanding of and practical ability to use and leverage technology.
•SMPs need to stay up-to-date with any new technology trends that are relevant to
their business environment and be open to adopting rapidly changing technologies so
as to help their own practice as well as to advice clients on technology needs.
•SMPs should consider automating their processes to improve efficiency and lower
costs. This would not only help generate new revenue for them but also boost client
satisfaction and loyalty.
•SMPs should especially embrace emerging technologies to remain competitive in the
market and to improve their professional skills and services. These technologies are
having great impact on the accountancy services in the present times.
The new technologies that can help SMPs in improving their service quality are:
1. Cloud computing
2. Advance Excel for accounting and financial reporting
3. ERP software
4. Data Storage Devices
5. Skype and VOIP (Voice Over Internet Protocol)
6. Smart phone applications
7. Communication through social media
Advantages for SMPs in adopting new technologies
SMPs can have following advantages by adopting new technologies:
•Enhance competency and the efficiency of processes
•Improve management and operational efficiency of SMP practices
•Improve competitiveness, profitability and sustainability.
•Learning more about current and potential clients and enter new markets
•Carry out audits, especially multiple audits, effectively and efficiently
•Access to complete databases for audit procedures and consistent analysis
•Deliver reports and financial information via the cloud
•Attract new clients via digital marketing
•Lower costs of providing existing services as well as offer new services
•Save time that is used to develop client relationships and respond to their
queries based on high efficient data analysis tools
Professional Services by Practicing
Management Accountants in Pakistan
The practicing management accountants in Pakistan perform a diversified range of
professional services related to cost audit, accounting, audit and assurance, taxation,
consultancy and other relevant services to the business and corporate sector. Some of
the services under different categories are outlined below:
Cost Audit Services
•Cost Audit is a critical area in which practicing cost and management accountants
extends their mandatory technical services to the manufacturing sector to help them
achieve overall efficiency and improve competitiveness.
•Cost and Management Accountants also provide technical services to the
manufacturing sector in implementing costing systems and strong controls.
•There are following five sectors in which cost and management accountants in
Pakistan are offering professional services in performing cost audit services:
1. Sugar Industry
2. Cement Industry
3. Vegetable Ghee & Cooking Oil Industry
4. Chemical Fertilizer Industry
5. Synthetic and Rayon Industry
Accounts-related Services
•Book-keeping,
•Financial Analysis,
•Financial Reporting,
•Retainer ship services…. Monthly returns
Audit & Assurance Services
•Internal Audit,
•Financial Audit,
•Cost Audit,
•Investigative Audit,
•Sales Tax Audit, Audit of Sales Tax Refund Cases,
•Composite Tax Audit,
•Audit under Federal Excise
Taxation-related Services
•Taxation
•Income Tax,
•Sales Tax,
•Customs and Federal Excise•Filings, follow-up, representation at various forums.
Certification Services
•Certification of Borrowers Accounts under Prudential Regulations
•Certification of Audited Accounts of Non-Profit Organizations (NPOs)
•Certification of Accounts of Leasing and Modaraba Companies
Government assigned Services
•Appointment as Accountant Member in Income Tax Appellate Tribunal
•Appointment as Committee Member on Custom Matters
•Appointment as Special Auditors by FBR for Income Tax Audit
•Appointment as Special Auditors by FBR for Sales Tax Audit
•Appointment as Inspector to investigate affairs of Companies
•Appointment as Member of ADR Committee
•Member Tax Advisory Council of FBR
•Member Tax Reforms Commission
Systems-designing Services
•Accounting Systems Design, Development and Implementation….
•(SAP, Oracle e-Business Suite, Microsoft Dynamics, Sage Peachtree, Quick
Books etc.)
•Costing Systems
•Project Management Systems (e.g. MS Project etc.)
•Document Management & Office Automation (MS SharePoint Solution)
•Payroll Management System, Human Resource Management System
•Budgeting and Inventory Management Systems
Business Planning and Consultancy Services
•Feasibility and Pre-Feasibility Studies
•Business Plans
•Physical verification of Fixed Assets
•Assets Revaluations
•Reconciliation of Fixed Assets Register
•Development of Financial and Costs Models
Business Policy Development Services
•Accounting Manual, Policies and Procedures Development
•Procurement Policies and Manuals Development
•Internal Audit Manual
•Internal Controls Procedures
•Performance Based Management System
•Medical and Transport Policies
•Training and Development Policies
Training and Capacity Development Services
Training to Corporate Clients in core as well as non-core areas such as:
Core Areas
New and Non-traditional Services
•Financial Management,
•Accounting for non-accounting
Managers,
•Financial Analysis, Budgeting
•Financial Systems,
•Internal Controls etc.
•Software Development
•Web Sites and Portals Development
•Outsourced
Solutions
(Payroll
Management, Accounting, IT, Financial
Systems etc.)
•International Online Projects
•WTO
Related
Issues,
Quality
Assurance etc.
Non-Core Areas
•Soft skills
•Business Planning
•Communication Skills,
•Motivation and Leadership,
•Personality Development etc.
Thank you