Small to mid-sized accounting firms are traditionally viewed as serving only local clients, but with rapid increases in technology, the world is quickly becoming a smaller place to do business. As globalization presents numerous opportunities for small businesses, it also opens the door for smaller accounting firms to expand their services into the international arena.
According to a 2016 survey conducted by the National Small Business Association (NSBA), 58% percent of small business respondents have exported goods and/or services. While large firms have traditionally dominated the marketplace for accounting and advisory services for international companies, a trend in accounting alliances is giving smaller firms a chance to compete. As more and more small businesses grow beyond their national borders, it seems many firms are taking advantage of this opportunity. According to the 2014 AICPA poll of U.S. accounting firms, half of sole practitioners and 71% of small firms forecast international growthi.
This trend is one that Terry Snyder, President and CEO of Allinial Global, a global accounting firm association, saw coming.
When he started out in the accounting profession more than 40 years ago, Terry was part of one of the largest accounting firms in the world, Arthur Andersen. At that time, firms like this were dominating the market for international accounting and advisory services. But even back then, Terry sensed that the marketplace would eventually evolve, making international work commonplace for all sizes of firms.
“It was a shift that seemed inevitable,” said Terry.
After leaving Arthur Andersen in 1976 to work with a small independent practice in Champaign, Illinois, Terry began fielding questions from clients that demanded international insight. He knew the firm couldn’t keep pace to address the needs of international clients and it was eventually merged into RSM in 1983.
In his current role as President and CEO of Allinial Global, Terry is now helping firms of all sizes remain independent by providing a full backstop of international talent and resources for member firms to pull from.
“International tax inquiries are a trend smaller firms can no longer ignore,” said Terry. “Even if these questions are coming in only once or twice per year, the inability to answer them opens the door to competitors. Our association of international firms share education, marketing resources, and technical knowledge in a wide range of services and sectors to help each other answer these questions.”
Is an international alliance right for your firm?
Like Allinial Global, international accounting alliances are made up of independently owned accounting firms around the world who work collaboratively to serve clients. To understand whether or not joining one is right for your firm, take a look at your client base and figure out which clients are doing business internationally now —and which ones are headed in that direction. Consider an informal survey of all clients if you’re not sure. While you’re at it, ask them about the challenges their clients will face from an international standpoint and the support they’d like to see. If a significant number are already operating internationally or would like to do so in the future, joining an alliance may be the right move for your firm.
Benefits of membership
Among its many benefits, membership to an international accounting alliance provides a platform for independent firms around the world to share knowledge with one another on country-specific accounting, tax, auditing and advisory services. They also offer referral services, networking opportunities and a chance to develop your international tax acumen, not to mention the camaraderie you’ll enjoy while working side-by-side with others in your profession around the globe. Yes, you’ll be sharing the revenue, but you’ll also be mitigating the risk.
“One of the most valuable benefits of joining a global accounting association is that you’re not only reading or studying up on international tax code, but also utilizing the insight and expertise of others who are out there actually doing the work,” said Terry.
With more than 40 international accounting associations to choose from, make sure to do your research and select the one that best meets the needs of your firm and your clients. Many of these alliances have strict criteria that must be met before your firm can become a member. The flip-side of this selectivity is that once accepted, you know the partners you’ll be working with are valuable assets.
How technology can support international work
As your firm begins to take on more international work, make sure your practice management system enables effective collaboration. It should allow you to share general information among staff and throughout your alliance network, but also have the ability to restrict access to more sensitive information based on roles. The balance of control and visibility is important in a collaborative work environment.
Being a member of an affiliation is also a great way to leverage and learn how other members manage and deploy technology within their own firms. It’s an easy way to take a best practices approach to technology management.
If one thing’s for certain, globalization is a trend that’s here to stay. As the world becomes smaller, opportunities for international growth become more accessible. No matter the size of your firm, you can capitalize on these opportunities with the support of networks, associations, alliances and the proper technology. It’s a decision that will certainly benefit your firm for years to come.