With Micro-, Small- and Medium-sized Enterprises Day on 27 June, Institute members tell Liana Cafolla what it's like to play a big role in a small- and medium-sized firm
Photography by Leslie Montgomery
Wilson Ng (centre, in blue shirt) with his team.
“Becoming an entrepreneur and setting up my own practice required a big mindset change,” says Wilson Ng, Co-founder of FastLane CPA and a member of the Hong Kong Institute of CPAs. “If you worked for a large corporation, you only focused on your own responsibilities,” he says. “Now we have a lot more things to manage and execute both operationally and strategically. We have to make the decisions for all functions of our business.”
Ng set up his firm in 2013 with his business partner Alex So, a university coursemate. Both had started their career with large international accounting firms before moving into investment banks. But after the financial crisis, regulation was tougher and business sentiment was negative in the banking sector. The two were not convinced that the industry could easily revive, and decided it was time to make a change, recalls Ng. “We started working on different ideas, and decided to leverage our profession.”
FastLane Group was born and then slowly expanded into providing a range of professional services from online accounting services, auditing and taxation, and to payroll administration and venture capital investment. Ng is Managing Partner of the firm’s accounting and auditing practice, and So leads other divisions.
The group now has over 20 employees, including the two founding partners and a new partner – but when they started there were just three. “The increasing workload and new clients made it challenging, especially when there were staff turnovers.”
Retaining the right people is hard for small- and medium- sized enterprises, with many new employees opting to move on to bigger companies after a couple of years. But as Ng notes, the firm offers a clear vision and shared values to attract and retain talent.
“The increasing workload and new clients made it challenging, especially when there were staff turnovers.”
“As an employer, we are certainly a less popular choice for those who are looking for big names and flashy offices, but our approach to strive for a real purpose of work helps,” Ng says. “We’re more flexible and agile compared to some of the traditional or bigger firms. Our colleagues are looking for more efficient ways to perform their duties and better appreciation of work. So when we utilize technology that provides flexibility and improved capabilities, we get their appreciation and support.”
Flexible working hours has been a big advantage for Ng, too. “When I started my business, my kids were still relatively young, so I could manage my time – I would occasionally be a parent helper at school, and when they went to bed, I worked,” he recalls. “So I didn’t miss out on some of the time with my kids growing up. It’s a good balance of life.”
“Many of the firm’s clients are operating globally, located outside Hong Kong, and in different time zones. They’re travelling all over the world and need instant responses and advice. This is why we can’t just stick to a paper-based approach and emails. Technology is helping a lot,” Ng says, advising CPAs considering setting up their own firm to use technology to help them work more efficiently. FastLane uses Xero online accounting software and has been a Xero partner since its incorporation. “We rely heavily on technology such as Xero, Skype, Zoom, Google Business Suite and Dropbox to maintain close communications and interaction with our clients. Ten years ago you couldn’t,” he says.
Being small and working with other small companies is incredibly satisfying, Ng notes. In big firms, “you’re just one of 100,000 staff – you can’t feel how much you contribute to the whole company. But working with start-ups, you can see them grow and become successful. That kind of satisfaction is greater than working for a big corporate.”
The firm’s hard work is now paying off. “We just finished our office expansion and are now looking to launch our services in other markets,” Ng says. “We’re getting more people on board, trying to expand and build our brand.”
He believes it’s essential for entrepreneurial-minded CPAs to build networks with other CPA firms. “As a smaller firm, you don’t have the resources of the big firms – like a technical team to look up all the changes in standards and regulations – so you have to leverage your network and external resources for such matters.”
For Helen Tang, Managing Director at Moore Stephens CPA and an Institute member, life in a small- and medium-sized firm is just fine – so much so that she has stayed with the same firm for 25 years.
Born and bred in Hong Kong, she moved to the United Kingdom for school and obtained a bachelor degree in accounting there.
“I trained there with a medium-sized accounting firm,” she says. “I qualified and then I came back to Hong Kong. Moore Stephens was my first job here.”
She worked her way up and became managing director, witnessing the firm’s growth along the way, and built the business by bringing in new partners who brought their own clients with them.
“When I joined, there were three partners – all men,” she recalls. “There were only 50 of us in total. Then we gradually grew a bit – not a lot, obviously. Until four years ago, we were 120 people. I took over as managing director of the practice in 2016. I had some new partners joining, they brought in business and today we have over 300 people.”
The firm now has 20 partners and has achieved an enviable gender balance. “Half male and half female,” says Tang. “I’m very pleased. That wasn’t really intentional, it just evolved.”
“Reputation is very important. Quality is very close to my heart.”
“We also promote diversity at our firm, we have a mixture of nationals from Mainland China, Europe and India working for us,” she adds. Tang has sought to build the firm’s reputation and business by giving as much value to clients as possible within the permitted boundaries.
“I always tell my people, audit is just a cost to clients. What you need to do is get more out of your auditing. You have to give some kind of value back. So when you see something that is not quite right during your auditing, by providing good advice you can add value to their business. But obviously, we have to be careful – being auditors, you can’t advise so much. You have to draw a line.”
The firm’s current size brings advantages, she says. “Being in a smaller firm, you can go out and get experience in a very broad landscape because you’re involved in the whole thing. In a big firm, for example, you’d probably be doing one section of the audit all the time.”
Decision making is also easier in a smaller firm, she says. “We’re more flexible. So in terms of our own internal policy, we don’t have to say, ‘oh no, the policy’s there in black and white, we can’t change it.’ We can always discuss, reflect, and change and get something better – a better decision, better policy.”
One of the firm’s toughest challenges is attracting and keeping talent. “That’s the difficulty facing not only by us but around the profession,” Tang says. “But Big Four firms will always have the first hand advantage of recruiting from the mainstream universities.”
At Moore Stephens, the response has been to offer new hires additional training as well as some innovative team-building activities including cake-making classes, coffee workshops, leather workshops and regular shoulder massages. “We pride ourselves on giving a lot of training to our staff, not only training by the technical training department,” Tang explains. “On-the-job training by our managers is very important. Teamwork is very important. We do team-building activities every single year. I really like this quote – ‘Talent wins games, but teamwork wins championships.’”
Embracing technology is a no-brainer for firms of all sizes, no matter where in the world they are located, she says. Moore Stephens has set up an initiative group to examine software that could increase the firm’s efficiency.
“In auditing, there’s some ground work which is really quite tedious – ‘ticking and bashing,’ we call it,” she says. “We’re looking into how we can get that bulk of work done by technology.”
Regulatory oversight is another common area. “All of the CPA firms, big or small, are subject to very close scrutiny from the regulators,” notes Tang, who is Deputy Chairman of the Institute’s Professional Conduct Committee, and member of the Small and Medium Practices Committee. She says the firm’s biggest challenge is ensuring its work stands up to the highest standards of scrutiny, adding that Moore Stephens has a blemish-free slate with regulators. “We have to make sure all the work, especially work for public interest entities [listed companies], has been properly and fully reviewed and there are no holes. Reputation is very important. Quality is very close to my heart. We want to grow, but we want a quality growth.”
Moving to the unknown
Matthew Li co-founded corporate structuring and advisory services firm Nova CPA Limited in 2013. The firm offers services relating to corporate governance, business and taxation advisory, investment immigration, mergers and acquisitions, IPOs and other business support. The firm has grown from three staff to more than 30.
Like others, Li, an Institute member, found rents to be the biggest problem and relied on family help to raise some capital. After leaving his job as a senior accounting partner at smaller firms including CLHL CPA Limited to set up Nova, another headache was enticing other professionals to leave their secure jobs for the unknown. Li says they were lucky in convincing some friends to take a pay cut and join them.
To build the business and attract clients, the firm relied on Google ads and offering an expanded range of related services. Li spent time talking to as many entrepreneurs as he could find, to learn about their businesses and challenges, as well as gathering information from their shareholders. “When you start your business, you do not have a strategy,” says Li. “You only have one or two clients.”
In an effort to make Nova stand out from the crowd, the firm switched to cloud-based accounting. “We adopted the cloud-based accounting system a couple of years back and ultimately this has provided great momentum for our transformation, bringing an innovative impact to businesses in Hong Kong as well as for our fellow business service providers,” says Li. He says his firm was one of the first to adopt the technology in Hong Kong.
Further change came from the realization that offering cloud-based accounting services was not the end of the road – the technology offered more opportunities. “The more we implemented accounting systems for businesses to cover the financial requirements, the more we realized that fulfilling business’ operation requirements are as important as financial ones,” says Li.
“Both as business owners and as accountants, we got to enjoy the maximum benefit from integration between different apps.”
To drive their clients’ business efficiency, the firm saw the potential for building a cloud-technology eco-system which would allow data to flow smoothly and automatically from operations to accounting, removing the need for businesses to enter the same data in different places. “Hence we started to provide various cloud solutions, such as restaurant point-of-sale (POS), inventory management systems, HR solutions, etc,” explains Li.
Building success for clients has helped to build the firm’s reputation. One of Nova’s most successful digital transformation cases to date has been working with a chain of artisan coffee shops with more than 12 branches around the region, including revamping the company’s front-end POS system, membership card, and back-end accounting and reporting system.
“Both as business owners and as accountants, we got to enjoy the maximum benefit from integration between different apps,” says Li. “We are very pleased that our clients see our value and strength in accounting and cloud business tools, and that has expanded our coverage in Hong Kong beyond traditional CPA business.”
He believes new small firms should prioritize financing to ensure they can pay the wages. “You should build a relationship with the bank,” he advises.
They should also embrace IT technology to enable them to deal effectively with bottlenecks, especially in auditing and accounting, and to scale up the business. “Do more reading, especially when you’re feeling confused or lost,” he counsels. “You’ll find related experiences that can motivate you.”
The right mindset and good behaviour towards others are both very important, he says. “Always be positive and be the biggest fan of yourself. Business is a result of your behaviour and what you have done. It’ll come across just like a mirror.”
Brian Lai was teaching his usual accounting, economic and finance in a secondary school one day when a student asked a question that changed the course of his life.
“‘Sir, have you ever started your own business?’ My answer was no. The whole class was disappointed. How can a business teacher have no business experience? That made me think about my career path. Then I quit my job.”
Lai decided to set up his own firm. He joined a local firm, studied for the Institute’s Qualification Programme (QP) exam and four years later, at the age of 30, he qualified as a CPA. The following year, he took the plunge and set up his business, and is now Managing Director of Link-Pro CPA.
Despite a supportive wife and a six month cash buffer from savings, it was a difficult time. His first child had just been born and he had no staff.
“It was a huge headache in the beginning because I was a one-man band,” he recalls. “I rented a small table in a co-working space in Sheung Wan and I started doing my marketing, deciding what kind of service I could provide, how to hire my staff, how I would train my staff and build my team.”
He leaned on his QP training and his four years’ of audit experience. “It equipped me with the problem-solving skills that enabled me to tackle all the early difficulties.”
Link-Pro now has eight people, including Lai, and offers business advisory, assurance and taxation service. Lai’s strategy to attract clients is twofold: offering as broad a range of services as possible – business advisory, assurance, taxation and audit – and using technology to make the business stand out from its competitors.
“We focus on cloud technology and cloud-based accounting,” explains Lai. This, he says, makes the company stand out in the digital era. The firm spend time training clients. “We advise clients how to do their book-keeping on the cloud. We train them how to do the input, and we provide advisory service to them. Clients can put all the data on the cloud and we have access to it. It provides a collaborative platform for us to work on.”
“You have the freedom to build an organization based on your own philosophy and your own core values.”
The approach is popular with clients, particularly expat clients who are already familiar with the technology and those with operations outside Hong Kong. “In this fast-paced [environment], you have to get the most updated information to make decisions. We tell them to subscribe, and then you can see the latest transactions on the platform and make instant decisions.”
The switch to cloud-based accounting was not a planned move. In early 2016, he and his team spent three months on a project for clients. They lost the data on a standalone PC and had no back-up. “We had promised to provide the financial statement to our client the next week,” he recalls. “We didn’t sleep. It took about one month to finish it. It was a nightmare.”
After that experience, he looked for a better solution and found Xero. “You learn from failure. It will make you even stronger than before,” he says.His first clients were a few friends. Slowly, he gained more mostly through word of mouth recommendations. “Now we have about 100 clients. It takes time to accumulate. You have to assure them that you are able to provide the value added, quality service to them. This is our first priority.”
He actively looks for clients in places such as Science Park and Cyberport where many small companies have their headquarters. They are young and familiar with technology, he says. “It’s very easy for us to approach them, as a tech-driven CPA company with everything on the cloud. They like the idea.”
Another challenge was a client who Lai found to be doing something unlawful. “I told them I would issue a qualified opinion. They said you cannot, because you receive our money. You act as my agent, you act as my service provider. They went to the Institute to raise a complaint against me.”
After a six-month investigation, Lai was exonerated. It was a tough time, he says. “I lost the client, but I kept my integrity. I learnt a lesson. Before I start working with a new client, I say very clearly, ‘As a CPA, we are independent. I work as a CPA. I don’t work for anyone.’”
For Lai, the benefits of starting a business are autonomy and the opportunity to teach others his philosophy. “You have the freedom to build an organization based on your own philosophy and your own core values. You can teach knowledge, experience, global perspective, values.”
There is another goal on the horizon: getting back to that classroom. “Now I’m studying for the MBA programme at the University of Hong Kong,” he says. “I want to scale up my business. Someday, I will go back to teaching again to share my experience.”
A total of HK$13.3 billion worth of invoices were paid late to small businesses in Hong Kong in 2018, according to the global small business platform, Xero. Xero’s data also found that last year only slightly more than half of total payments to Hong Kong small businesses were made on time.