The Field of Small and Medium Enterprises

The biggest companies of the world are often considered as leaders in the field of small and medium enterprises (SMEs). But this is not like it or at least it should not be as that . The proof, statistics governmental academic research shows that SMEs not only have the greatest impact on the economy and society, but they are also the main ones drivers of innovation and change . In addition, when SMEs are at the forefront of innovation in products and services, they can also innovate to produce integrated reports.

There is a growing body of evidence convincing about the benefits substantial that the organizations derive from the creation of integrated reports . But that is there any benefit for SMEs? What is Perhaps most surprising is that B20 (branch commercial G20) recommended to promote the production of integrated reports as a way key to improve reporting of SMEs in order to build confidence in past and future performances . And some commentators and researchers have written on the relevance and value of integrated reporting for SMEs.

There are clear, concise and convincing arguments to explain why SMEs and their stakeholders, managers owners to consumers final, benefit greatly from the reflection integrated reporting and integrated reporting . And in a follow-up article, we provide an initial kit on how which SMEs can do better with the steps initials Suggested and instructions for resources helpful, including examples illustrative.

SMEs around the world represent the bulk of the activity economic sector private, employment, social impact and footprint ecological . Among them are the most important companies, the most influential and impactful tomorrow. Amazon, Alibaba, Uber and Didi Chuxing were the SMEs of yesterday . But unlike many great companies, SMEs have often freedom to adopt a long-term vision and to pursue goals that go beyond profits. Many SMEs are managed by owner-managers who see now as a part integral and a reflection of their lifestyle and their values . This lends itself to a thinking, and accountability corresponding, which focuses on the long- term in the short term, the future in the past, and the principles on profit.

Integrated Reports

Integrated reports are an international framework generally recognized that helps SMEs to better understand and better communicate how they create value (see this short video for more details ). that make up their value creation story. This makes an integrated report much more than a conventional annual report ; It’s a more complete business report . But you do not need to demand a lot or even nothing, more effort to compile. And perhaps most importantly, this will help SMEs to understand the main engines of their activity to they can to put in place a model business that helps them grow .

SMEs, like large entities, pull left a variety of resources and relationships to create value. The international framework for integrated reporting call these “ capitals ”. There are six capital, including family, financial and least familiar, manufactured, intellectual, human, social and relational, and natural capital. Correctly maintained, these capital can unlock value over time while increasing their capacity in as a store of value . The way whose these capital can function in an SME is Detailed IFAC in the value creation for SMEs through a reflection integrated: the benefits of integrated reporting .

The principle director of connectivity East fundamental to understand and communicate the way including SMEs create value. It is the interaction between the three aspects of value creation: capital, environment external and important internal factors . Promotes the taking in account of the effects of connectivity . For example, between the strategy and the model economic development of SMEs and the risks and opportunities specific which she East confronted, or between nature and rate of change technological and how that affects the ability of SMEs to continue to create value. in the future .

Benefits of Integrated Reporting

The International Integrated Reporting Council (IIRC) summarizes the results convincing research on “What is the value of the integrated report ? Information of the best practices of companies “and” benefits realization. “But -we focus on what matters most to SMEs, namely a best risk management and best decision making, enhanced internal dialogue and better communication between stakeholders, best understanding, better management.

An integrated reporting approach helps SMEs to better understand the factors that determine their ability to create value over time. In using what is calls the “ thought integrated ’, SMEs can make better decisions that work best results . thought integrated East a connected vision of the SME, including its use and effect in all capitals power stations of his model economic and its future strategies, improving planning strategic, execution and evaluation .

Thought integrated help SMEs better understand the mechanics of their company . This will help assess the strengths of their model business, to identify gaps and remedy quickly . These ideas easy a visionary vision and a decision strategic solid . it can appear familiar to SMEs who already use elements a integrated reporting approach in essence, if this is in form or name.

Better Report, Better Communication

We live in a time when information can be collected, summarized and communicated quickly and easily, and in which society and stakeholders ask to know more of companies large or small. companies have a story to tell their stakeholders, investors current and future, banks and other suppliers of financial capital to employees, customers, creditors and other interested parties, their objectives, perspectives, benefits, principles and global impact .

In addition, SMEs are more and more involved in the provision of services. Compared to their predecessors of family stores, these SMEs have little tangible assets, if they in have, they can see, touch and listen . Instead, they can rent office space, equipment and fast Internet and pay salaries or consulting fees to qualified personnel. So, in under the rules accountants conventional policies, such as the IFRS for SMEs, their balance sheets, essentially an overview of financial capital, do not give a complete picture of their ability to create value. other capital, manifested by the experience of employees, customer loyalty and ownership intellectual, are missing . If past finances can be important the or they exist, they are only one aspect of the history of value creation of an SME. The result is that many stakeholders in SMEs are missing information sufficient to take a decision illuminated . It is right here that integrated reports come in

External communications resulting from integrated reports, including an integrated report, include invariably key finances . But this information is preserved in context and related to important “non- financial “ measures and narrative information . In providing the image complete, not only “the numbers ”, but a brief history of how whose SME creates and will continue to create valuable relationships integrated helps to meet the communication needs of financial capital and other interested parties. In doing so, an integrated report can optimize reports.