Our paper sets out how professional accountants help SMEs with digitalisation. Many small and medium sized enterprises (SMEs) in Europe are technology innovators or have already taken major steps towards digitalisation, but many less digitalised SMEs still struggle with it. Their attention may instead be focused on immediate business survival or day-to-day work, particularly following the COVID-19 pandemic.
We explain:
The paper is intended to help policymakers and others understand how accountants can help SMEs to digitalise. It also includes policy recommendations for fostering SMEs’ digitalisation efforts.
Our publication comes out as the European Commission set, on 15 September, ambitious digitalisation targets for the next 10 years, including over 90% of EU SMEs having reached at least a “basic level of digital intensity” (see article below). Read more
The EU initiative for so-called cooperative (tax) compliance will kick-start this autumn with a pilot project, possibly to be followed by an EU proposal.
This programme aims to facilitate and promote tax compliance by taxpayers based on greater cooperation, trust and transparency between taxpayers and tax administrations, as well as amongst tax administrations themselves.
This SME cooperative compliance scheme would consist of allowing tax administrations to preventively solve cross-border tax issues faced by SMEs operating within the EU.
The European Commission (EC) has published a survey asking for SME stakeholders’, including SMEs advisors’, views and experiences on cross-border tax issues that SMEs are facing. The deadline for responding is 30 September. Read more
The EC published its much-anticipated renewed sustainable finance strategy on 6 July. It was also accompanied by the EU Taxonomy Delegated Act on Article 8.
The strategy covers four main areas where additional actions are needed One of its 6 specific actions focuses on SMEs, and includes the following elements:
The Taxonomy Article 8 element specifies the disclosure obligations under Article 8 of the Taxonomy Regulation. These allow companies to translate the technical screening criteria into quantitative economic performance indicators – the KPIs – which will be publicly disclosed.
This may indirectly impact SMEs, who may be required by larger supply chain partners to provide sustainability information.
EC has published a report that provides data and reflections on the progress towards a Capital Markets Union (CMU) in the EU. The report includes several SME-specific indicators as well, such as SMEs’ views on the importance of equity financing, analysts’ coverage of SMEs and SMEs’ equity gap. Read more
On 15 September, EC published a policy framework for EU digitalisation targets by 2030. Great emphasis is put, notably, on the digital transition of SMEs, with the document stating that “the digital transition should also incentivise the digitalisation of SMEs”.
EC’s key objective for EU SMEs is that over 90% of them will have reached at least a basic level of digital intensity by 2030.
SMEs’ accountants and Accountancy Europe stand ready to support EC’s ambitions objectives in this area. See our publication in the feature story above for indications on how. Read more
Zdravko Počivalšek, Slovenia’s Minister of Industry and SMEs, stated that the country will aim to foster SMEs’ participation in Europe’s space projects during a hearing at the ITRE Committee (industry, research and energy) on 15 July.
This came as a response to questions by several Committee members on the Slovenian Council Presidency’s priorities and the importance of supporting SMEs.
Počivalšek also underlined that implementing the EU’s SME Strategy will be a priority, highlighting that SMEs will receive funding via the EU Single Market programme and the COVID Recovery and Resilience Fund. He pointed that SMEs also need short-term financing to resolve liquidity problems, and that this autumn’s SME Assembly will look at many of these issues.
Accountancy Europe will be present at the SME Assembly too.
Slovenia’s turn at the helm of the rotating Council Presidency began in July and will last until December 2021. To mark the occasion, Slovenia published a policy priority programme outlining what its focus areas will be. For SMEs, Slovenia will aim to:
According to a new OECD report, the COVID-19 pandemic has taken its toll on SMEs and entrepreneurs globally, but they are weathering the storm thanks to strong government support packages.
The OECD SME and Entrepreneurship Outlook 2021 looks at measures taken to help SMEs survive, and in many cases thrive, during the pandemic. It also considers the longer-term effects of the crisis and how countries can create the conditions for a greener, more sustainable, and inclusive recovery. The report finds that SMEs and entrepreneurs are fundamental in driving the recovery and confirms that government rescue packages are playing a crucial role. Read more
European associations representing SMEs, accountants, financial and guarantee institutions, and other key actors in the SME ecosystem have issued a joint statement calling for dialogue on the assessment of SMEs’ post-COVID financial health.
They will aim to organise pan-European discussions involving their sectors and the relevant public authorities at the EU level in order to ensure a common understanding of the challenges and solutions. The associations will also support similar potential initiatives by their national members to organise cross-sectoral national meetings, reflecting country specificities and needs.
The joint letter was initiated by Accountancy Europe, drafted in close collaboration with SMEUnited, European Banking Federation (EBF) and the European Association of Guarantee Institutions (AECM). Read more
We submitted our response to EFRAG’s consultation on sustainability standard setting on 14 September.
In its response, Accountancy Europe insists that there should be a specific due process for SME sustainability reporting standards. Moreover, these standards should consider SME characteristics, such as their governance model and resource constraints. Therefore, the respective standard-setting should also be adapted to consider their particularities. Accountancy Europe highlights that field-testing will be critical to understand if SME sustainability reporting standards are fit-for-purpose. EFRAG should invest more in getting SMEs to adequately participate in the fieldworks.
Accountancy Europe has worked extensively on SME sustainability. It published a paper last year highlighting the role that accountants can play in fostering sustainable transition in SMEs. And this spring we published a sustainability checklist for SMEs.
Cloud computing and e-commerce are areas in which German SMEs remain particularly behind, according to the OECD study published on 28 June (see article above). This could have a negative impact on the country’s post-pandemic economic recovery.
The findings come despite a number of government initiatives to make SMEs fit for the digital age.
“We have set a lot in motion here,” Economy Minister Peter Altmaier said during a Digital Agenda conference.
Germany has “set international standards” in the process of digitalising industry, otherwise referred to as Industry 4.0, Altmaier said. Still, the competition never sleeps, he added. Read more
The Institute of Chartered Accountants in England and Wales (ICAEW), one of Accountancy Europe’s UK members, has published a new article on funding opportunities for SMEs in the pandemic era.
While COVID closed off traditional micro-business funding opportunities, other options have emerged which play into the strengths of entrepreneurs from more diverse backgrounds.
For micro-businesses, the funding process usually follows a well-travelled – often long – path involving chats, coffees and meetings. But as the pandemic shut down all social interactions, the first six months were a scramble towards Zoom meetings, which opened some opportunities, but pressured even experienced founders in their search for funding. Read moreThis curated content was brought to you by Johan Barros, Accountancy Europe policy manager since 2015. You can send him tips by email, follow him on Twitter and connect with him on LinkedIn.
