Accountancy Europe’s President since December 2017, Edelfried Schneider is an accomplished professional and leader. Part of this is his 4 decades of experience advising small and medium-sized entity (SME) clients. We ask what he has learnt along this journey (see also part 1).
SMEs would be pretty much alone, lost in a world of regulation and requirements. SME advice isn’t only given by small practices, but I would say that the type of service an SME would get from a larger firm will be very different. Basically, it is because people count.
SME accountants can give a more direct “boss to boss” advice, and like many things in life such as buying a car or a marriage, there must be a good match. SMEs seek advice from an audit or accountancy firm that matches them, so they would lack this type of service. As a result, even the local pharmacist or dentist can have a direct contact with someone at partner level at a small practice, which would not be possible with a larger firm.
“Niche” is the magic word here. Family businesses are mostly synonymous with owner-managed businesses, which means they are very flexible, and can make decisions on short notice. They should seek specialised services, related to the special needs as for car dealerships, retail, franchises, health care, constructions or crafts etc. These are all contexts where the client relation evolves positively because the accountant provides expertise and proximity.
SMEs can be the frontrunner for the change in technology, especially when this is in the hands of young people. The grey hairs won’t change it! The impact can be very wide: it can boost profits and provide SMEs with much needed internal information. For instance, there is a huge lack of cost accounting in SMEs which can be very important for them. Also, modern customer relationship management (CRM) systems can be very helpful to learn about their customers and manage their relationships.
Put simply, SMEs have a chance to adapt more rapidly to digitalisation. There is a lot of talent in smaller businesses. In practice they should not go for very large suites of programs, nor look to proprietary software. As they don’t require sophisticated programs, they can make use of software that is readily available on the market so long as it’s integrated. What is important is to connect everything and avoid working in silos.
The role of Accountancy Europe is to continue to share best practice cases. I have quite substantial experience in cross border work, which is getting more and more important for SME accountants. To provide quality advice, a professional network and language skills are essential, and these are lacking in many small practices. This is guidance and information we can share with small practices so that they can better tailor their work to the needs of SMEs.
We need to raise awareness of the different services SME accountants can provide, such as cost accounting and finance support and to show more of the profession’s expertise in insolvency and investment advice, just to mention a few areas. Accountancy Europe needs to serve as the platform where members can learn how other institutes have tackled certain problems. By using technology we can serve as a platform for sharing best practice solutions, gathering ideas, and inform on new services.