Two years ago, Singapore launched its SMEs Go Digital campaign, a government effort to enable small businesses to modernize and embrace the cloud that continues today.
Indeed, amid the coronavirus pandemic, this digitization push has become even more paramount than before, and Singapore is calling on not only small businesses, but their service providers and partners, to support the effort.
Accounting firms have become an important collaborator in aiding cloud migrations by small to medium-sized businesses (SMBs), according to Alan Chang, managing director of Singapore Corporate Services (SCS). Not only has Singapore rolled out an Accountancy Industrial Digital Plan to encourage the accounting sector's own digitization, but according to Chang, the ecosystem as a whole is facing market pressure to elevate its SMB clients' ability to operate in a digital economy.
"This is not only a good opportunity, but rather is utmost necessary for accounting firms to move toward digitalization of our services in order to stay relevant," Chang recently told PYMNTS.
As part of this evolution, SCS embarked on an effort last September to develop a platform to bring the B2B eCommerce model to small business accounting, enabling business owners to quickly view prices and order reports the same way they shop for goods and services online. With the platform now live, Chang reflected on the biggest challenges that small businesses in Singapore face, and how the coronavirus pandemic has exacerbated the need to embrace the cloud.
A New Model For Accounting
According to Chang, launching an accounting eCommerce portal has not been done before in Singapore, making its development a challenge — and making collaboration with technology vendors key to its success.
"Being a [more than] 150-year-old traditional industry, the accounting industry's greatest challenges come from the impact of the technologies and accountants' ability to adapt to the fast-paced changes in the business environment," he said, pointing to blockchain as one example of this disruption. "Blockchain technology has been widely adopted in man industries, but accountants are still debating on how to properly account for it."
Migrating a services-based market, rather than a products-based one, can also be more difficult to migrate into an eCommerce business model, he said.
But overcoming these challenges is essential. Not only does the accounting sector have to modernize with the rest of the economy, but as more small and medium-sized businesses embrace digitization, they are seeking the same level of digital experiences from their service providers that they offer themselves.
It's a two-way impact, said Chang, who added that not only do digitization efforts by SMBs encourage accountants to modernize, but through its own digitization, the accounting sector can promote the modernization of its own clients across verticals as well.
"I believe the question is not about what challenges SMB clients face when their accountants don't offer online services [and] experiences," he said. "We should turn the question around: What are the clients left to be served if accountants don't catch up to offer those online services and experiences?"
Easing SMB Globalization
While the ability to explore pricing and procure financial reports can be beneficial to small and medium-sized businesses, SCS's new eCommerce platform is also focused on one of the greatest challenges that SMBs face today when it comes to managing finances. When a company seeks to expand across borders, it can struggle to launch financial processes in new markets, often forcing business owners to physically travel to those new jurisdictions to open up bank accounts.
In today's environment, SMB growth is key to survival, but cross-border travel is all but impossible in the midst of the coronavirus pandemic.
To tackle this challenge, the platform enables small businesses across borders to place orders with accountants for services that will help them establish operations in Singapore. The service includes the ability for accountants to guide SMBs through the process of opening up a Singapore bank account remotely while facilitating compliance checks for financial institutions, including anti-money laundering (AML) and know your customer (KYC), via video conferencing. The digital platform eases the friction of data collection for accountants, Chang explained, and empowers SMBs to expand globally in ways that are not possible without this digital eCommerce model.
As a top financial hub of Asia and the world, Singapore is a key market for many small businesses. According to Chang, citing the Accounting and Corporate Regulatory Authority of Singapore, last year saw 16,000 new small businesses formed.
"It is essential for these 16,000 newly-formed companies to quickly get a bank account open, so the business activities can start to take in revenue and pay expenses," he said.
Moving ahead, Change said SCS will look to introduce a broader array of professional services onto the eCommerce platform. With nearly all of SCS's clients now having adopted cloud-based accounting software, the ability for SMBs and their accountants to help each other digitize and grow is greater than ever.
But the digital migration journey is far from complete, and accountants and SMBs must work together to further move the needle — sometimes in incremental steps. For example, SCS is helping SMB clients digitize their document depositories.
"This is a very small step for some small businesses that are not savvy or sensitive to the digitalization revolution," said Chang, "but it is an essential step to take."