What High-Growth SMEs Have In Common

When it comes to small business growth, SME owners need support from financial officers to succeed. But new research by the Association of Chartered Certified Accountants found that for the fastest-growing businesses, financial officers stretched their role into an all-around strategic business partner.

According to reports in the Financial Director on Wednesday (Aug. 26), the ACCA surveyed eight chief financial officers and controllers at companies that experienced 70-percent growth over the last three years to explore how those financial executives played a part in that corporate expansion.

Researchers found that while initially, the finance function was established in a traditional sense – that is, providing accounting services and other traditional financial processes – financial executives morphed into a source of support for a company’s strategic growth.

“The remit of the finance function was almost always found to extend beyond operational tasks and processing during – and especially after – periods of high growth,” the ACCA research stated. “As the finance function becomes a strategic business partner in itself, it often drives this growth, or otherwise reciprocally feeds and accelerates it.”

ACCA researchers also found that within each company, growth was sourced through strategic internal decisions regarding expansion, through procurement of technical expertise to drive product innovation, or through strategic response to external factors, like consumer demand.

For small- and medium-sized enterprises, ACCA head of SME policy Rosana Mirkovic, who authored the report, the findings should be grasped as insight into how to fuel growth.

“SMEs experiencing fast growth require a CRO willing and able to take a key role in monitoring and controlling high growth as it unfolds,” she said, “as well as forecasting future trends and possible new directions for the business.”

She added that financial executives must be agile enough to deal with rapid expansion, which can cause significant problems for a company, including insufficient staff or the challenge of entering new competitive markets.

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