The role of your accountant is traditionally viewed as a reporting or advisory role, focused on what has gone before, as well as what should come next. For the average UK SME, knowledge of UK requirements seems enough. Yet using the support of an accountant with an international focus, SMEs can tap into a plethora of overseas opportunities, argues John Edwards, Chief Executive and Group Executive International of the Institute of Financial Accountants (IFA).
The export potential
According to the latest figures from UK Export Finance and the National Survey of Registered Business’ Export Behaviours (NSRB), 1 in 7 businesses with a turnover of more than £500,000 are not currently exporting but could be. This equates to untapped potential of £290billion per annum. What’s more, of those which do export, 66% are considered “passive” exporters, waiting for orders to arrive rather than actively seeking sales. The most common challenge for businesses with exporting comes back to knowledge, which includes gaps in how to export, how to sell abroad, and what regulations they will be subject to. SMEs also cite a lack of time, and the resources required to get up to speed.
Drawing on a background of specific and wide-ranging regulatory knowledge, not to mention their position as trusted business advisers, accountants have the unique opportunity to support SME businesses with overseas expansion. Their understanding of the most common export markets can support SMEs to leverage their competitive advantage, distributing British-made goods and services to international marketplaces.
Supply chain diversification
One thing that the past few years have highlighted is the untold risk of supply chain homogeny, revealing the pitfall of relying on cheap, overseas imports from a single importer. Conversely, it has also highlighted the opportunity for diversification, opening untapped markets for import.
Supply chain disruption remains one of the single biggest threats to UK businesses currently, with challenges around the cost, consistency, and quality of previously stable supplies. Many businesses face the reality of a slowdown in supply without being equipped to diversify their supply chain, verify potential new suppliers, or seek out their own direct-to-manufacturer relationships having previously utilised an importer. Accountants understand the numbers and the potential of these relationships. They are uniquely placed to help navigate international marketplaces, either directly, or in partnership with trusted advisers with whom they can connect. Those who are members of international professional accountancy bodies like the IFA can also leverage support with the development of these relationships.
Global best practice
Since the advent of the information revolution, the world in terms of business has become more closely connected, with international borders playing a diminishing role in trade and market supply and demand having increasing influence. Couple that with the shared global challenges we face such as the race to net zero, and it is no longer relevant just to focus nationally. Much of the best practice necessary for future growth and prosperity will come from our international counterparts. Environmental sustainability, solutions, and appropriate benchmarking, will most likely happen at an international level too, following COP delegations and international cooperation.
The United Nations has set out 17 sustainable development goals, focusing on the main challenges that will be faced globally in the coming decades. They call for urgent action from all countries but, in reality, action will come from the businesses that underpin every economy globally. Unlike other business development goals, much of the best practice comes from a global rather than national landscape, and while straightforward in vision, can be challenging to integrate in practice. SMEs are uniquely positioned for the adoption of many of these goals, with size giving them a competitive advantage of a more straightforward and agile adaptation of strategies. As arbiters of data, accountants are primed to assist SMEs. They have a unique and progressive role to play in the adoption of environmental, social and governance strategy.
Wider access to resource
It is no secret that the UK recruitment landscape is highly competitive and businesses are grappling with retention of skilled staff members as well as slower-then-usual recruitment, further impacted by post-Brexit movement of labour. While there remains a desire to utilise a skilled, British workforce, significant investment in overseas relationships in recent years is opening up a pool of additional labour, equipped and qualified to support British businesses with much-needed resource. The IFA for example, which is part of the IPA Group, has partnerships with membership and training bodies in The Philippines, Fiji, and the Solomon Islands to support international training and standards. There are already many qualified accountants keen to offer support to UK businesses.