GLOBALISATION. Whilst it's an over-used term, it can no longer be ignored by accountancy firms. Across the world governments are making efforts to facilitate cross-border trading and improve transport and communications infrastructures. As a result it is becoming easier to do business internationally, and so smaller enterprises are venturing into the international market.
The top-tier firms have long cornered the large, multinational market but there are now opportunities for the firms to take advantage of having a greater compatibility with those SMEs that are looking to go international - in terms of both pricing and business approach. To use the catchphrase of a major bank, in the future even the smallest businesses will be multinational, and this an important message to send to clients that are looking to achieve growth.
But how to get in on the action? Firms should develop an internationalisation strategy and join an international network or association of practices.
Where that network is cohesive, with like-minded member firms, you will have greater confidence in putting your client in their hands. At the end of the day, the strength of an international network comes from the local knowledge that member firms can offer to clients.
It can however take time to develop an international mindset in partners and staff. At first it might seem that offering to help a client to internationalise will only generate work for your overseas associate, but it is an essential hook to keep a client that might otherwise feel they have outgrown your firm and need to upscale. It could also be what differentiates you from your competitor which looks less able to help a potential client with global aspirations.
There are many different business models which can be used to help clients expand globally, and there is no ‘one size fits all' solution. It could mean firms will have to develop a sales strategy which can be rolled out in other countries or set up a structure for subsidiaries or more complex business requirements.
To this end international company desks can provide a focused approach by concentrating efforts in growth markets such as India or China. These ‘desks' - separate business units managed by partners who are from, or have worked in, the country and speak the language - which can hold the hands of UK companies looking to move into these markets.
There is a wealth of information available to accountancy firms looking to help their clients to internationalise. The World Bank guide to the ease of doing business globally, benchmarks the regulatory environment in 183 countries from the perspective of the domestic SME; Transparency International monitors public and private corruption around the world; and the Legatum Institute offers a holistic assessment of the prosperity of a nation through the wellbeing and happiness of its citizens.
Also, some international accountancy networks have "Doing Business" guides, produced by member firms, summarising local regulations on foreign investment, setting up businesses and taxation.
All of this can assist in the development of international capabilities, but by far the most important step is to become a member of a cohesive international network - or to affiliate with a national firm with international links - which can help firms to engage clients so they can achieve their international goal.
Ladislav Hornan is managing partner for UHY Hacker Young, part of the UHY International network
It’s interesting to know Hong Kong such a tiny city can rank as the world’s number one economy in term of their degree of globalization relative to GDP. I guess proximity to China and free flows of international funds is the key to success.
Posted by: George Lee, CPA CGMA, 16 Feb 2012 | 12:04
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