SME Update

September 2022

  • Commission announces new SME support measures in light of crises Europe faces
  • Commission proposes new forced labour Regulation with impact on SMEs
  • EFRAG appoints two new members to its SME sustainability working group
  • Only 10% of SMEs own intellectual property rights, according to EUIPO

Accountancy Europe’s “Insights from SME accountants” series continues

In June we launched our new “Insights from SME accountants” article series. Each article features a small practitioner accountant working with small and medium-sized enterprise (SME) clients and specialising on sustainability services.

Jesper Esman Andersen, in his article, explains some of the main hurdles that SMEs face on sustainability and gives tips for first steps to take. Ismael Moussa, a former professional volleyball player turned accountant, explains what motivated him to start working on sustainability. He emphasises the need for raising awareness about sustainability’s importance – both among SMEs as well as within the accountancy profession. Caroline Cziharz, for her part, elaborates on how accountants can help SMEs with sustainability.

There’s much more in the pipeline still, so keep watching this space. With this series, we aim to highlight the great work done every day by our thousands of small practitioner members from across Europe in supporting their SMEs.

European Commission

Commissioner Breton outlines SME support measures

Commissioner Thierry Breton, in charge of the European Commission’s (EC) Directorate General for Internal Market, Industry, Entrepreneurship and SMEs (DG GROW) and the EC’s SME agenda, has provided further details on SME support measures in light of the ongoing multiple crises. He said that he intends to revise the Late Payment Directive to create a “European standard of responsible conduct” for all businesses in the Single Market.

For example, he suggests the introduction of ceilings for business-to-business payments (as is done for the public sector), the strengthening of enforcement through sanctions and monitoring obligations. He also proposes to create tools for SMEs to improve dispute resolution.

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Commission’s forced labour proposal could impact SMEs

The new Regulation was published on 14 September. It aims to prohibit the making available and export from the EU market of products made by forced labour. The prohibition should apply to products when forced labour has been used at any stage of their production, harvest or extraction. The prohibition should apply to all products, of any type, including their components. The prohibition should apply to products of any origin, domestic or imported, and made available on the EU market or exported from the EU.

All economic operators, economic sectors, stages of production or steps of value chains should fall under the scope of this Regulation. This means that SMEs too are in the scope. The EC states that their situation should be addressed through the design of the proposal, risk-based enforcement, and supporting tools.

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European Parliament

SOTEU: SME support package incoming

In her annual 14 September State of the Union (SOTEU) speech to the European Parliament, EC President Ursula Von Der Leyen announced an upcoming support package for SMEs. This will include a revision of the EU’s Late Payments Directive (see article about Commissioner Breton above), as well as a proposal to harmonise and consolidate the EU tax base for businesses that operate across borders in the EU Single Market (BEFIT).

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Commission holds state of the SME Union speech as a follow-up

During a debate in Strasbourg on Thursday 15 September, MEPs were unanimous in expressing their concerns about European SMEs’ situation, which has been particularly deteriorated by Russia’s invasion of Ukraine and the ensuing energy crisis.

The pandemic, supply disruptions, the war in Ukraine, the energy crisis… in each speech, everyone spoke of the same difficulties and concerns. In detail, following the example of Martina Dlabajová (Renew Europe, Czech), several MEPs mentioned European legislation’s lack of adaptation to the needs and constraints of SMEs.

Věra Jourová, EC Vice-President speaking on behalf of Commissioner Breton, aimed to reassure. The objective of the SME support package announced by Von Der Leyen in her speech the day before is to provide an answer to SMEs’ lack of liquidity, in particular with the revision of the Late Payments Directive.

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Council adopts Conclusions on internationalisation of SMEs

The Conclusions are Member States’ reaction to the European Court of Auditors’ (ECA) special report No 7/2022 on SMEs’ internationalisation. The Conclusions call on the Commission to improve SMEs’ awareness on the availability of EU internationalisation support, to bring these programmes “closer to European SMEs”, and to increase awareness of SME support opportunities provided through the Enterprise Europe Network (EEN).

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EIB Group and RLB Steiermark join forces to provide additional lending to SMEs

The European Investment Bank (EIB) Group and RLB Steiermark have joined forces to provide additional lending to SMEs and mid-caps.

EIB Group synthetic securitisation will enable RLB Steiermark to lend up to €240 million to small and mid-sized businesses mainly in Austria. The operation is backed by a European Fund for Strategic Investments (EFSI) guarantee under the Investment Plan for Europe. The operation will also benefit private individuals undertaking energy efficiency projects in housing construction and renovation.

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EFRAG appoints two new members to its SME sustainability working group

In its meeting on 12 July, the European Financial Reporting Advisory Group’s (EFRAG) Sustainability Reporting Board (EFRAG SRB) appointed two new members with SME and social expertise to the EFRAG Sustainability Reporting TEG (SR TEG).

The new appointees are Carlota de Paula Coelho and Sandra Atler. These new seats are specifically relevant in this first term of EFRAG SR TEG in which most of the draft European Sustainability Reporting Standards need to be developed for the EC. The appointment is in principle for a term of two years.

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12 Accounting Mistakes New Business Owners Often Make

A new business won’t survive long if it doesn’t have solid cash flow and a good accounting system in place. Unfortunately, some of the most common financial problems stem from simple mistakes new entrepreneurs may make the first time they’re tasked with keeping the books.

Luckily, there are ways to avoid or fix most of these common mistakes and save your business’s bottom line. To that end, a panel of Young Entrepreneur Council (YEC) members answered the following question: “What’s one accounting mistake that new business owners might tend to make, and why? How can they fix it?”

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Only 10% of SMEs own intellectual property rights, according to EUIPO

The EU Intellectual Property Office (EUIPO) has once again found that the registration rate for intellectual property (IP) rights remains particularly low, while the benefits remain high, according to a new study published on Wednesday 28 September.

In fact, the Office has noted that difficulties faced when registering and a lack of knowledge are still among the main obstacles in the 2022 edition of the ‘Intellectual Property SME Scoreboard’. The EUIPO’s European Observatory on Infringements of IP shows that only 10% of SMEs in the EU have registered IP rights, such as trademarks, designs and national and European patents.

Accountancy Europe has worked together with the EUIPO to help raise awareness about IP access among SMEs, targeting specifically SMEs’ accountants. For example, in March 2022 we published a joint paper with a checklist for accountants.This 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.