For many SMEs across South Asia, the past few years have felt like a succession of shocks. First came the pandemic, followed by inflation, supply-chain disruption and high interest rates. Now, the ongoing crisis in the Middle East is creating fresh uncertainty for businesses already operating on tight margins.
Rising energy costs, volatile exchange rates, disrupted shipping routes and weakening demand in some export markets are all feeding through to the region’s SMEs. For South Asia’s highly trade-dependent economies, the consequences are particularly significant.
‘Today, the typical brief is about survival of the balance sheet’
In response, SMPs are finding themselves playing an increasingly strategic role, helping clients move beyond compliance to navigate a rapidly changing risk landscape.
A perfect storm
‘The crisis in the Middle East is creating very real pressure and a level of uncertainty for SMEs, not only across South Asia but also across the wider APAC region,’ says Dr Suresh Surana, founder of RSM India. ‘Through our work with clients, we also note the resilience of many SMEs who, despite these challenges and the immediate uncertainty they face, are committed to executing their existing longer-term strategies.’
Nevertheless, the nature of client conversations is changing. ‘Today, they’re less about compliance and more about resilience,’ says Nikhil Narang FCCA, founder and managing director of Peakvisory Accountants in India. Clients want to know how much cash runway they actually have; whether they should delay hiring or expansion plans; and how to protect margins without damaging customer relationships.
‘In uncertain periods, cash management becomes more important than revenue growth’
Surana is hearing similar concerns. Businesses are asking how the crisis will affect budgets, financing costs, projects, contracts and cashflow. Many are looking for sensitivity analysis and contingency planning rather than traditional accounting support.
Paurav Thakker FCCA, owner of PAT & Associates in India, says the mood has shifted noticeably. ‘Eighteen months ago the typical brief was about optimisation, how to structure an expansion, how to improve the effective tax rate. Today, it’s about survival of the balance sheet.’
Clients with Gulf exposure are increasingly concerned about payment risk, currency movements and supply availability. Others are asking whether they should build inventory, hedge foreign exchange exposure or revise growth plans altogether.
Cash is king
One theme runs consistently through the advice that SMPs are giving: protecting liquidity.
‘In uncertain periods, cash management becomes more important than revenue growth,’ says Narang. His firm is encouraging clients to build rolling cashflow forecasts, monitor supplier dependency risks and review gross margins more frequently.
Surana agrees. ‘The advice we’re providing is to act early, preserve flexibility and make decisions based on clear data rather than uncertainty,’ he says. Among his priorities are revisiting budgets, stress-testing assumptions and ensuring sufficient liquidity to cover six to 12 months of operations.
‘The firms that come through these episodes are rarely the boldest’
Thakker’s approach is similarly pragmatic. ‘On liquidity I’m unambiguous: protect it ahead of almost everything else, growth included,’ he says. ‘The firms that come through these episodes are rarely the boldest. They’re the ones that protected their cash and kept their options open.’
Managing risk, not avoiding it
Foreign exchange exposure has become a particular area of focus. Shah Ahmad Hossain FCCA, director at Hoda Vasi Chowdhury & Co in Bangladesh, says clients are increasingly seeking advice on managing currency volatility, import costs and changing regulatory requirements.
At the same time, advisers are helping clients navigate evolving regulations. Central banks and governments across the region continue to adjust policies in response to economic pressures, creating an additional layer of complexity for businesses.
‘The message is not necessarily to become risk-averse, but to become more disciplined. In terms of existing projects, we’re recommending clients remain cautious as stakes are very high and situations very fluid,’ says Hossain.
Opportunity amid uncertainty
Despite the challenges, many advisers see opportunities emerging from the disruption, the most obvious being diversification. Businesses that rely heavily on one market, customer group or supplier network are reassessing their exposure.
‘The conflicts are reinforcing the importance of building resilient business models, having stronger forecasting systems, using technology and AI for risk monitoring, improving operational efficiency and diversifying markets and revenue streams,’ says Narang.
Hossain points to growing interest in renewable energy projects as businesses seek greater energy security. Bangladesh recently reaffirmed ambitious plans to expand solar generation capacity, creating opportunities for advisers with expertise in finance, regulation and project development.
‘The issue of sustainable energy is at the forefront,’ he says. ‘Power sector clients are asking how they can get involved in sustainable energy initiatives, the barriers to entry, how to manage regulatory affairs and so on.’
Thakker believes the biggest lesson is that resilience can no longer be treated as an afterthought. ‘The governing question has moved from “How do we maximise growth?” to “How do we grow in a way that survives the next shock?”,’ he says. ‘The working assumption among serious operators now is that there will be a next shock.’
Strategic advisers
For SMPs, the crisis is accelerating a trend that was already under way. Clients increasingly want advisers who can interpret data, assess risk and provide strategic guidance, rather than simply prepare accounts.
As geopolitical uncertainty becomes a permanent feature of the business environment, that role is only likely to grow. ‘Businesses no longer only need bookkeeping support; they need strategic financial intelligence,’ says Narang.
For South Asia’s SMPs, helping clients navigate uncertainty may prove to be one of the profession’s most important value propositions in the years ahead.
