Survey of SMPs Shows High Demand for Sustainability Services
by Terri Eyden on
By Jason Bramwell
Almost three-quarters (73 percent) of small- and medium-sized accounting practices (SMPs) worldwide are either providing or have plans to provide sustainability services to their clients, suggesting there is a sizeable market for these services among the small businesses that SMPs typically serve, according to a recent survey by the International Federation of Accountants (IFAC).
Of the nearly 3,700 SMPs surveyed in the IFAC SMP Quick Poll: Mid-Year 2013, 76 percent said the most common sustainability service they offer is advisory services, followed by reporting services (52 percent) and assurance services (42 percent).
Additional Key Survey Results
- Twenty-three percent of SMPs indicated that burden of regulation is the biggest challenge facing their SME clients. Economic uncertainty (17 percent) and pressure to lower prices of their products and services (16 percent) rounded out the top three challenges.
- Keeping up with new regulations and standards (25 percent) is the top challenge facing SMPs, followed by pressure to lower fees (23 percent) and attracting and retaining clients (20 percent).
- What is the fastest-growing source of revenue for SMPs? Thirty-five percent said accounting, compilation, and other nonassurance-related services, followed by audit and assurance (26 percent), advisory/consulting services (22 percent), and tax (17 percent).
- Forty-five percent of SMPs surveyed said acquisition of new clients was their main driver of profitability, followed by better retention of existing clients (23 percent) and increased productivity (12 percent).
Some differences were noted across practice size and region. The larger the practice, the more likely it was to be offering sustainability services. More than half (54 percent) of practices with twenty-one or more professionals indicated they currently offer these types of services compared to 37 percent of sole practitioners.
Practices in Asia (58 percent) and Africa/Middle East (56 percent) were most likely to be offering sustainability services, while SMPs in Central and South America/Caribbean (23 percent) and Australasia/Oceania (32 percent) were the least likely to. Forty-two percent of North American SMPs polled provide sustainability services.
In North America, 83 percent of SMPs offer advisory services, while 61 percent offer reporting services and 53 percent offer assurance services. North American SMPs with a professional staff of between two and five people were most likely to offer all three services.
"The widespread provision of sustainability services suggests that small businesses are increasingly recognizing the tangible benefits of operating more sustainably," IFAC SMP Committee Chair Giancarlo Attolini said in a written statement. "SMPs can help their small- and medium-sized entity (SME) clients in many ways; for example, advising on the costs and benefits of behavioral changes aimed at reducing waste, appraising potential investments in alternative sources of energy, and assisting with the implementation of an environmental management system. This is a large and growing area of demand that SMPs need to be prepared to meet."
About the survey:
The IFAC SMP Quick Poll: Mid-Year 2013 received 3,678 responses and was conducted in sixteen languages from May 29 to July 8. The poll, conducted twice annually, is intended to take a snapshot of key challenges and trends influencing SMPs globally.