ACCA recently released a report entitled ‘The Global SMP business model: understanding a changing profession’ that provides a unique insight into how the SMP business model is changing to adapt to a new reality.
If you are a finance and accounting professional, this report makes for an interesting read because it is the first study to provide a detailed map of the sector’s service offering, its growth prospects and the source and value of its diverse skills across different countries.
Although the sample size of 22 SMP respondents from Singapore (out of a total of 531 respondents) did not allow for any statistically significant conclusions, the findings of surveys on Singapore SMPs done in the past 5 years are generally consistent with the current global findings from this survey.
Thus, this provides a context for the Singapore SMP sector to compare with.
The survey found that:
- At the global level, the SMP sector’s offering remains highly focused, with the ‘core’ SMP offering still based on assurance, tax and compliance.
- These services were cited as the ‘cash cows’ for SMPs.
The Singapore Connection
This is also true for Singapore.
An inaugural #AEcensus2015 survey of accounting entities conducted by the SAC (Singapore Accountancy Commission) showed that for firms other than the Big 4, 64% to 71% of the revenue was generated from assurance services.
An SMPs survey, conducted by ACCA and commissioned by ACRA (Accounting and Corporate Regulatory Authority) in 2011 also found that a substantial portion of the respondents still derive their revenue mainly from statutory audit work (40% vis-à-vis the next contributor, taxation, which trails at 12%).
While the global SMP sector’s offering remains highly focused, with the core SMP offering still based on assurance, tax and compliance, this core technical skill set is highly adaptable and transferable.
SMPs are actively exploring a number of routes to higher value-added offerings, such as helping clients design and monitor internal controls as global supply chains demand accountability and transparency. In fact, this survey showed that over 70% of SMPs are planning to introduce a new service over the next two years.
For the full report, please click here.