We’re excited to have been part of the first-ever Accounting & Finance Show earlier this week, exhibiting alongside the likes of Xero, Maybank, Talenox and Financio among others. The show was held over two days, and supported by the Singapore Accountancy Association and IMDA who are both helping to drive the digital transformation of SMEs in Singapore.
A huge thanks to all who visited our booth across the two days too - we spoke to many accounting and finance professionals about the importance of cash flow management for a business, and how they can be tapping on their underutilised credit limits on their credit cards as a form of interest-free, short-term financing.
It was a truly buzzing two-day event, with 160 speakers sharing their insights and learnings and over 2,500 delegates in attendance. Topics covered include digital innovation in accountancy and finance, cash flow management, cloud technology as well as the future of finance.
Here are some of the key highlights we picked up from the show:
Daphne Ng, CEO of JEDTrade, kicked off the keynote sessions on the first day, sharing some of the major digital finance trends to look out for. Amongst these were - no surprises here - Cryptocurrency, Block Chain, Big Data and AI, and how they will affect the financial space in the years to come. Other trends of note include the rapid growth in Initial Coin Offerings available in the market, which the US is currently leading the way on, followed by Singapore.
There has been increasing regulation in the fintech space. London, Singapore, Abu Dhabi and Mexico are the cities that have the highest regulation. Regulatory sandboxes are being used as mechanisms to stay on top of the developing regulations; they not only provide a thriving environment for fintech companies to continue innovating but enable banks and regulatory bodies to better understand the new compliance frameworks required. The increase in know-your-customer (KYC) checks have also fueled the growth of the RegTech sector. These new technologies are enabling better cooperation between the regulators, professional services firms, financial institutions and RegTech companies themselves, better supporting the growth of this space in a more regulated and controlled manner.
Other trends highlighted included financial inclusion; access to finance remains a major pain point in a lot of developing countries, with a $1.2 billion market opportunity to reach these people. Interestingly, it was noted that there has been a rapid rise in the number of non-financial companies (‘Non-fi’) thriving in the digital economy, such as e-commerce firms and other consumer-facing businesses that are branching out to include a finance offering. Finally, the growing importance of online security was flagged as a key digital trend of note – with a lot of security attacks coming from within companies and 90% of hacking undertaken internally.
As every business owner knows, cash is the lifeblood of your business. Without it, a business can quickly run into financial difficulties. Speaking on this topic in more detail at the show was Bryan O'Loughlan, Principal Consultant, CFO Associates, who provided insights on digital strategies and tools to help improve cash flow management.
He noted that businesses run on cash, not profit. He gave an example of the dramatic rise and fall of Enron, a US energy firm, which used to be the darling of the New York Stock Exchange. The company's share prices kept going up, it had good profits and returns – then one day it suddenly crashed, leaving behind devastated employees, shareholders and subsequently having to file for bankruptcy. Despite being hugely profitable, the company just wasn't producing any cash.
"...cash is the lifeblood of your business. Without it, a business can quickly run into financial difficulties..."
Bryan commented that companies need to think about where they are in the cash flow cycle. They need to get the invoices out promptly – it is of importance to get cash in the bank much quicker than they pay their suppliers, and try to delay their payables.
As a cash flow management tool, all of us at CardUp definitely resonate with the points Bryan mentioned. Credit cards do exactly this, and when used right, give you up to 59 days of interest-free capital, extending your payables even further at no cost. A tool like CardUp further augments this use case, by allowing you to make credit card payments to all kinds of payments - including payroll - even if cards are not accepted.
As a quick takeaway, he summed up the 3 key ways to manage a business' cash flow:
1) Manage your own working capital
2) Internal financing, sourced from shareholders, or existing credit lines such as a business credit card
3) External financing, via a bank or alternative financing methods
The professional services sector and the direction it is headed towards was also touched on multiple times across the event. During his keynote speech, Evan Law, CEO of Singapore Accountancy Commission, highlighted that the Accountancy Services Market in Asia Pacific is due to grow from US$71.1 billion in 2016 to US$97 billion in 2021, with the professional services sector set to be the 4th largest economy in ASEAN by 2030. Of course, with this huge growth expected, we also expect many processes to go heavily automated and digitised, including the menial, repetitive tasks like reconciliation and making payments.
Later in the day, Joseph Alfred, Head of Policy and Technical at ACCA, spoke about the role of professional services in developing digital economies, noting that Singapore is widely recognised as a global professional services centre and hub.
Accountancy Services Market in Asia Pacific is due to grow from US$71.1 billion in 2016 to US$97 billion in 2021
According to a recent ACCA report, companies have continued to prioritise spend on professional services – and interestingly pointed out that the lower the revenue of the company, the higher spend on professional services. The top 3 non-regulated professional services most in demand include IT Business Solutions, Risk Advisory and Process Improvement and International Tax Advisory services.
Anthony Staltari, Head of Partner, Asia from Xero discussed Xero’s mission to rewire the small business economy. He cited how, by moving to the Cloud and embracing digital, SMEs in ASEAN can boost their contribution of US$200 billion in GDP by a further US$1 trillion.
Anthony noted some of the major challenges SMEs face with their finance systems, including being unable to work with a team, the scope for human error, having data locked in the desktop and having receipts everywhere. He flagged that the biggest benefit to being on the Cloud was that you can be fully mobile and be connected to every small business on the platform.
During a panel session on ‘Bringing SMEs to the cloud’, Stephanie Benedetti, General Manager of Spirit Retail, brought up one of the biggest challenges SMEs face: the management of the transition to Cloud. There’s the need to re-educate your staff on the importance of upskilling, to help them adapt, and most importantly, to help them embrace the change. Businesses need to take a longer-term view and commit resources to put their staff through onboarding processes. This will help them understand that the value that the shift to the Cloud will help bring to the overall growth and sustainability of the business.
Prashant Ganti from Zoho Corporation noted at the same panel discussion that the Cloud also provides many benefits that a typical desktop cannot, and with the move to the Cloud, your data is free to move about. With your assets in the cloud, you can make more valuable use of your time, derive better insights and get more value-added services from the Cloud.
Since the announcement earlier this year involving the nationwide adoption of E-invoicing, it has been a topic amongst many local businesses here. Geok Seong Wah, Director of E-Invoice, IMDA gave an overview of IMDA’s new E-invoicing initiative, flagging how IMDA is helping Singapore move into the digital economy and assisting businesses to go digital. One way that IMDA can help enable this is by encouraging SMEs to embrace E-invoicing. Currently, 80% of businesses are still sending paper invoices in Singapore, which are costly to maintain and reconcile, whilst the average cost of rectifying a tiny error in an invoice can come up to SG$72!
Geok Seong also mentioned how IMDA had announced the adoption of the PEPPOL standard earlier this year. Governed by non-profit organisations, European-driven and designed to be cross-border, it is a new 4-corner model for E-invoicing which will be easy for SMEs to adopt. Over 20 service providers will be coming onboard with the service due to officially launch next year.
And that’s it for now! Thanks to the organisers of the Accounting and Finance Show for putting on such a great event. We really enjoyed our time at the show. It not only provided us with plenty of networking opportunities but was packed full of insights and learnings, leaving us with plenty of food for thought for the future of financing.