Global connections: learning from the international landscape

The last few years have proven the accountancy sector agile and adept at handling market turbulence but as the global shocks continue it’s important not to become too inwardly focused warns John Edwards, Chief Executive and Group Executive International of the Institute of Financial Accountants (IFA). It’s only natural that an accountant operating in the UK places intense focus on the UK economy and regulations, but in doing so they may miss lessons and opportunities from the international landscape that could prove lucrative. Having at least a working understanding of overseas markets presents accountants with the opportunity to reinforce their position as trusted business advisers. Import and export are just two of the ways in which to reap the rewards. Understanding import: the opportunity for supply chain diversification One growing post-pandemic trend has been the diversification of supply chains away from the homogeny of cheap providers in Asian manufacturing hubs and back towards their European counterparts. Markets reeled from supply chains slowing and even closing during the pandemic, exacerbated by the Suez Canal blockage, and transport shortages, so the need for better control and closer geographic links became a must. Supply chain disruption remains a significant threat to UK commerce with the multi-faceted challenge of managing costs, consistency and quality against the stability of supply. Many businesses are struggling, but are not yet equipped to diversify their supply chain, verify potential new suppliers or establish direct-to-manufacturer relationships having previously relied on importers. While some businesses will have reserves to withstand short-term disruption, the continuation of global turbulence makes supply chains a more pressing concern. Even without significant overseas experience accountants are uniquely placed to support clients with risk analysis by crunching the numbers needed to understand the impact of maintaining or moving supplier relationships. What’s more, they can understand the potential of new relationships, and can navigate international marketplaces directly or with a trusted international counterpart. International professional accountancy bodies can support with the development of these relationships, fostering connections with partners that can help you build your own brand and reputation too. Growing the market: understanding export According to the National Survey of Registered Business Export Behaviours (NSRB), of businesses with a turnover in excess of half a million, 1 in 7 are not currently exporting but could be, and of those that are, 66% are considered “passive” exporters awaiting inbound orders rather than actively seeking sales. According to UK Export Finance, that’s £290billion of untapped potential sales every year. A lack of knowledge is the most common reason for avoiding export, including whether the goods or services can be exported, whether there is a market for them, how to export, how to sell abroad, and what regulations they will be subject to. Resource is also a challenge, with SMEs citing a lack of time, knowledge, or the people power required to get up to speed. Accountants have opportunity to fill this void, drawing on their background of regulatory knowledge to lead initial explorations. Understanding at least the most common export markets can support your SME to leverage its competitive advantage, distributing British-made goods and services to international marketplaces. Maximising your own competitive advantage While much of an accountant’s focus is directed to client businesses there are also opportunities for our own growth when we focus our attention beyond the UK’s borders, including: Resource: the UK employment market is at its peak and according to research by jobs board Broadbean Technology, there has been an increase of 33% in vacancies for accountancy job roles in 2022, while a survey by Hays highlights both increasing demand for applicants (a 54% increase in vacancy postings) alongside 73% of businesses saying that they are experiencing a skills shortage. Overseas labour has the potential to plug this shortfall, and while UK applicants remain desirable for many, significant investment in overseas relationships in recent years is opening up a pool of additional labour, equipped and qualified to support British accountancy practices with much-needed resource. This is particularly pressing following labour movement changes post-Brexit and the requirement for a sponsor license too. The IFA, which is part of the IPA Group, has recently signed partnerships with membership and training bodies in The Philippines, Fiji, and the Solomon Islands to support international training and maintaining/increasing standards. There are already many qualified accountants keen to offer support to UK businesses, which could be levied for non-client-facing roles. Best practice: while the government legislate for our borders, the reality is that a significant percentage of businesses now have, or plan to have, an international aspect. Accountants must be au fait with their regulatory responsibilities in the UK but must also acknowledge the value and influence of international relations. This means understanding and utilising international best practice to theirs and their clients’ best interests. Sustainable Development Goals: as we all join the global race to net zero, the UN has set out 17 sustainable development goals that will become increasingly essential for business. These issues, the solutions, and appropriate benchmarking span international borders, and will most likely happen at an international level, following COP delegations and international cooperation. 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, agile, adaptation of strategies. As arbiters of data, accountants have a unique and progressive role to play in the adoption of environmental, social and governance strategy. Innovation and new approaches: Every international market is unique and subject to its own market demands and regulations. With that uniqueness comes different mandatory requirements and different standardised approaches to finance. For UK accountants this provides a veritable landscape of untapped knowledge and potential innovation by bringing new standards and insights into UK businesses. Becoming part of an international accountancy body can provide unique learning opportunities through networking, the sharing of technical and soft skill professional development and potential connections, supporting SME accountants to push the envelope on innovative service delivery for their clients. There is much to be gained from inviting international best practice into our businesses, and seeking the opportunities afforded by a broader working knowledge of the world. At the IFA, we encourage accountants to upskills themselves to an internationally relevant scale, using it as opportunity to better serve their clients and to acquire new ones too.