Small and medium practices (SMPs) face a host of challenges, which SAICA is helping to address.
SAICA Small and Medium Practices (SMP) division is pursuing its 2013 objective of meeting more of our Small and Medium Practitioners out in the field, whether by attending discussion groups or visiting individual practices.
The purpose of this is twofold: to gain a better understanding of the SMP landscape, the challenges and opportunities that present themselves, and as part of SAICA’s communication strategy for advising SMPs of what resources and offerings are available through SAICA.
During our visits we have noticed there are definite key themes which are emerging from the SMP market. The top three challenges facing practices being:
• Regulation, especially the Companies Act
• Dealing with government stakeholders, especially the Department of Labour with regard to workmen’s compensation, Companies and Intellectual Property Commission and SARS
• Retention of quality trainees.
The pace of change in regulation is not a unique challenge to South Africa, but rather the number one challenge facing practices worldwide, according to the International Federation of Accountants (IFAC) SMP Mid-year 2013 Quick Poll.
SAICA tries to alleviate the burden somewhat by providing alerts when new legislation and standards are promulgated and through providing guidance such as the SAICA Companies Act Guide, our guidance document on S90 in the Companies Act, and through commenting and lobbying efforts with government, regulators and standard setters.
Many practitioners have been concerned about the possible impact of S90 on their practice and services which they provide to their clients. As the guide explains, S90 is only applicable to statutory audits and thus in the majority of cases, its impact on small practices is negligible.
The difficulties that practitioners experience with SARS and the Companies and Intellectual Property Commission (CIPC) is not a new challenge, also not an unexpected one, considering that SMPs deal with a large volume of transactions with these agencies and are brought in by businesses and individuals precisely because of the complexity of the situation.
However, SAICA has acknowledged the need and created an Operational Query Register (OQR) for members to log long-outstanding queries with SARS/CIPC that they have not resolved through the normal escalation and query resolution processes. The OQR offers members an alternative channel to attempt to resolve their queries, as well as affording SAICA the opportunity of collating data and cases to support our lobbying efforts with SARS and CIPC. SAICA also has regular meetings with these agencies to alert them to operational challenges being experienced by members.
The retention of trainees is always a difficult challenge to deal with, as trainees do have the freedom of choice. If they are willing to accept the penalties relating to moving firms during their training contracts, there is little that firms can do to prevent this. There are two primary reasons for trainees moving: the one being for more money, the other being that many of them don’t complete their training contract.
We encourage trainees to visit www.nowican.co.za website, which offers inspiration from CAs(SA) to motivate trainees to stay on the journey, as the rewards are worth it. Although SMPs can’t always compete with the public and private sector on salaries, there are definite benefits to completing a training contract with an SMP. The firm should look to highlighting these benefits to trainees and consider structuring packages to play to these strengths in an effort to retain trainees.
On the positive side, practices do seem to be more positive now than they have been over the last two years and are showing signs of expansion of service offerings and growth of clientele. If not now, they expect to within the foreseeable future. Many more firms are now focusing on business advisory services and outsourcing of the accounting function. Practitioners involved in tax compliance services are expecting that the role they play will become more complex and expansive due to the advent of the Tax Administration Act and other changing tax legislation.
With the country looking towards SMEs, entrepreneurs and small businesses for economic growth and employment, this is the opportune time for SMPs to play a leading role in supporting and advising these businesses. This will ensure that they do not become part of the growing statistic of failing businesses, but rather that they can excel with the support of a CA(SA).
Author: Bridgitte Kriel CA(SA) is Project Director: Small Practices, SAICA.