Governments should provide more support for small companies

   

A leading accountancy body has launched a new report, Supporting Enterprise Globally, which details how SMEs around the globe face similar obstacles to growth - including a lack of bargaining power with large companies.

Governments have been urged to invest as much money and effort supporting smaller firms as they do large listed companies.

Key Findings

The main points from the ACCA (the Association of Chartered Certified Accountants) report are:

• Countries should share best practice on how best to support their SMEs
• SMEs are critical to economic recovery
• SMEs around the world face similar obstacles, including limited resources, management capacity and lack of bargaining power compared with large companies
• Small firms can also struggle in complying with regulations; lacking time, resources as well as internal expertise to handle red tape
• The smallest companies can incur more than five times the administrative burden per employee than larger firms

Rosana Mirkovic, SME Senior Policy Adviser at ACCA commented:

“Small firms can also struggle in complying with regulations; lacking time, resources as well as internal expertise to handle red tape. In fact, the smallest companies can incur more than five times the administrative burden per employee than larger firms.

“And while large companies have enjoyed close relationships with governments, standard setters and financial institutions, small firms are invariably more difficult to reach and research, as well as represent effectively to policy makers and other important stakeholders.”

ACCA Chief Executive Helen Brand added:

“Policy makers need to 'think small first', paying particular attention to understanding the diverse needs of this sector, especially now that SMEs are likely to face increasing pressures in their business environment. In order for regulators and governments to provide appropriately designed business support, regulatory and legal environments, tax systems, external finance and other crucial factors which affect the sector’s performance, there needs to be a better understanding of the diversity of this sector and a greater sharing of best practice in order to more effectively address its needs.”

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