Small accounting practices in Singapore are feeling the squeeze. Costs are rising, margins are razor-thin and there is a talent squeeze making staff hard to come by. Meanwhile, the number of small and medium practices (SMPs) is growing, bringing the risk of losing clients to competitors. The answer, say some practitioners, is collaboration between firms.
Yet, the value of collaboration is not always obvious – and many fear losing their independence, says Willy Tan, founder and director of compliance at ForBis, a small practice focused on accounting, human capital and financial advisory.
‘SMPs can strengthen their resilience, expand their capabilities and remain competitive’
‘If you’re a one-man show, the amount of services you can do will be very little. Chances are the other firms you collaborate with will be able to provide all those services at a lower cost,’ he says. ‘That might be a bit threatening or scary for some of the very small or micro practices.’
Robert Yam, executive chairman of audit and tax firm Robert Yam & Co, adds that what practitioners feel able to charge – while offering value for money – is front of mind when billing clients. ‘Fees are a strict constraint,’ he says. ‘It’s very difficult for smaller firms to explain why fees are so expensive.’
Think differently
The concerns of practitioners are considered in a new strategy paper from the Institute of Singapore Chartered Accountants (ISCA), which outlines key challenges facing the sector: tough competition, difficulty finding talent and keeping pace with fast-changing technology. It sets out five recommendations – collaborate, build trust, embrace technology, develop new talent and expand globally – to help SMPs grow and compete.
The paper calls for a fresh look at firm ownership rules and urges SMPs to explore new ways to collaborate – from overseas back offices to digital tools – without compromising quality. To attract younger talent, the institute is also calling for a digital badge system to recognise firms’ credibility and raise the profile of SMPs.
‘At their core, the recommendations focus on helping SMPs build greater scale, resilience and relevance in a rapidly evolving environment,’ says Koh Wee Kwang, co-chair of the ISCA’s Strengthening SMP Taskforce and an ISCA council member.
According to the paper, 70% of Singapore’s accounting firms – 534 companies – are run by fewer than 10 employees, while 98% have fewer than 100. Most focus on compliance, audit and assurance work, serving small businesses with practical, tailored solutions.
‘Professional services centres enable firms to connect with other practices abroad’
For these firms, staying open to new ways of working is essential, says Helmi Bin Ali Bin Talib, ISCA council member and taskforce co-chair. ‘By embracing this mindset, SMPs can strengthen their resilience, expand their capabilities and remain competitive, while still preserving the independence and client-focused values that define them,’ he notes, adding that consolidation and collaboration need not mean extinction; firms can pursue various pathways, from alliances to mergers, depending on their goals and stage of development.
Collaboration can also help firms bid for larger clients, says Ying Hu FCCA, CFO and founder at Accounting BPO company ET Management. ‘When you go up the value chain, what the client requires starts to differ. When we give higher value services, the normal bookkeeping and accounting work can be done at a basic level,’ she says.
Shared approach
One way SMPs are collaborating is through offshore shared-service centres. A growing number have set up back offices overseas to support their Singapore operations, and ISCA’s strategy paper recommends developing a framework to ensure quality at these centres, with staff encouraged to pursue accountancy qualifications and align with professional standards. Over time, the centres could evolve into integrated professional services (PS) hubs, facilitating the exchange of expertise and talent while generating business leads and referrals.
‘These centres enable firms to connect with other practices abroad and access shared resources, fostering collaboration, learning and growth,’ says Koh. ‘Through the PS centres, firms can expand their reach, build relationships and strengthen their capabilities in a structured and sustainable way.’
‘The urgency lies in ensuring that firms are not operating in isolation’
For Ying, who operates her own shared-services centre in Vietnam, having a back office has opened up new opportunities.
‘When my associates have a big job, instead of lowering costs by opening their own Vietnam centre, they come to me and say, “Why don’t we collaborate on this?”’ she says. ‘I share my resources in Vietnam with them and, in a sense, I also earn and recover my costs in Vietnam.’
‘Independence, close client relationships and manageable risk profiles are real strengths of SMPs,’ says Talib. ‘The urgency lies not in forcing scale, but in ensuring that firms are not operating in isolation in a way that exposes them to growing talent, regulatory and technology risks.’
Ultimately, collaboration could help smaller firms compete for bigger clients, says Tan. ‘A lot of the market share goes to the Big Four,’ he says. ‘There’s a very big pie out there and, through collaboration, we can potentially see a bigger pie.’
