M Institute

IFAC explores growth challenges in medium enterprises

A draft paper from the International Federation of Accountants has identified the challenges associated with different growth trajectories experienced by medium-sized organisations, writes M Institute correspondent Joe Lickens. The paper, entitled "Typical Challenges for Medium-Sized Enterprises and Responses of Professional Accountants in Business ", is based on the premise that there are three archetypes of medium-sized business: "fast growing", "stable" and "under pressure".

The paper is part of a work program providing international good practice guidance to professional accountants in business (PAIB), but is very useful to senior managers in medium-sized organisations as well. According to the technical manager of the PAIB committee, Vincent Tophoff: "Feedback has so far been very positive. PAIBs from around the globe who have experience with M companies have been interviewed and the lessons learned will be used in conjunction with the paper when it is published."

Conservatives challenge on regulation

The Conservative party's economic competitiveness policy review was published this month, dealing with a remarkably broad selection of topics. The report looks at the current state of transport, skills and training, regulation, energy, the public sector, ownership, and taxation, and offers extensive recommendations for each, ranging from the seemingly banal (the re-phasing of traffic lights) to the controversial (the abolishment of inheritance tax).

The proposals that deal with regulation are perhaps of most interest. Some are drastic (scrapping data protection, for example) but, overall, the focus on tackling regulatory burden is welcome. The report argues that often regulation is used to impose practices that businesses, in the interest of competitiveness, already have in place. Furthermore, it argues that some regulations achieve the opposite of what is intended: in such instances, regulation sometimes produces unintended consequences that are more harmful than the issues the regulations are dealing with.

The report proposes a governmental push for deregulation: new regulations would have to be debated before being implemented and annually reduced regulatory budgets would be given to each department.
The report advocates exemptions, where appropriate, for SMEs.

Unfortunately, in M Institute’s view, the report fails to distinguish between the very different needs of small and medium sized businesses. Medium businesses usually do not qualify for exemptions and are treated exactly the same as large enterprises.