‘ESG is a hot topic for clients’ NAOISE COSGROVE

ACTIVITY The last year was one of record growth for Crowe, with solid client demand for services in audit, tax, corporate finance and consulting. In particular, our consulting services have been in high demand with clients navigating challenges and opportunities in areas such as business strategy, change management, risk management and governance. Our corporate finance team, which is focused on the SME sector, was extremely busy with deals. Some of the notable transactions we were involved with were advising Thorntons Recycling on its acquisition of The City Bin Co. and advising Glanmore Foods on its sale to Compass Group.

WAREHOUSED TAX The tourism sector is populated in large part by small and micro businesses, especially outside of the hotels, and is still recovering from the impact of the pandemic. Almost 6,000 hospitality businesses have warehoused debt, owing an average of over €50,000 each. This is a very significant burden for many small businesses faced with other financial pressures due to inflation, the increase in VAT and the minimum wage, and rising costs.

In recent months, numerous hospitality businesses have closed, citing the impact of rising costs. The extension of the debt warehousing scheme will provide some respite, but further government support may be needed to ensure the financial stability of viable business within the sector.

ENHANCED REPORTING The introduction of Revenue’s new enhanced reporting requirements has placed a significant burden on businesses, especially SMEs, as existing accounting and payroll systems were not designed to capture Revenue’s detailed requirements. A further headache is reporting the information to Revenue in real time in advance of making the payment to the employee or director. Many clients must do this manually as their systems do not support batch processing of the information. We are helping many clients to review their procedures and implement the new reporting requirements.

OUTLOOK The general business sentiment among clients remains cautiously optimistic.

However, common challenges for SMEs include the scarcity of people, advancing technology, rising costs, high interest rates, and difficulty in accessing credit. Businesses are also concerned by the uncertainty and volatility created by geopolitical events such as Ukraine, Gaza and the Red Sea.

ESG is another hot topic for clients. Implementing sustainable ESG strategies, policies and practices is not only vital in caring for the planet and meeting regulatory obligations, but is an important factor in how employees, customers and investors are making their decisions. We have seen from the events of recent years that the rate of change in the economic, regulatory, political and technological environment is accelerating. Businesses need to react and adapt to these changes quickly to remain competitive and seize the new possibilities that arise.