SMEs Lag In AI Adoption Adding To Critical Challenges

Small and Medium Enterprises (SME) often find themselves navigating through a myriad of challenges, ranging from global inflationary pressures to local regulatory adjustments. Among the entities at the forefront of offering strategic guidance and innovative solutions to address these complexities is YYC, a leading accounting and advisory firm based in Malaysia.

“We take a more tailored approach, offering strategic advice and compliance support that is right for each company,” said YYC, Group Chief Executive Officer, Datin Shin Yap (pic) in a recent exclusive interview with BusinessToday.

SMEs, in particular, often grapple with the complexities of adopting new technologies. “For many SMEs, AI adoption is still not widespread,” remarked YYC, Group Executive Chairman, Chau Yap during the same interview. This highlighted a significant challenge that many smaller enterprises face in the evolving landscape of modern business.

Practical Uses of AI Tools for SMEs

Artificial Intelligence (AI) is revolutionising the way businesses operate, and while its adoption among SMEs (Small and Medium-sized Enterprises) may still be in its early stages, the potential benefits are vast. AI tools can be incredibly useful for a range of practical, everyday business tasks. “From my experience, AI tools like ChatGPT can be incredibly useful for brainstorming ideas, copywriting, and writing emails and even drafting business plans,” Chau said.

  • He added, “For SME business owners, practical use of tools like Copilot or ChatGPT is more feasible and beneficial.”

To maximise the benefits of AI tools, it’s crucial for SME owners to know how to use them effectively. This involves understanding how to create and refine prompts to get the best results from AI applications. For example, specifying the tone, style, and context when using AI for copywriting or communication can significantly improve the output quality.

“…it’s crucial to know how to use the correct prompts effectively. Microsoft’s Copilot, for instance, is a tool I find invaluable for various writing and brainstorming tasks, which ultimately saves time,” Chau said.

SMEs Mindset Barrier: Viewing Sustainability and Technology as Costs

Sustainability and technological integration are no longer optional but essential for long-term success. While larger companies with ample resources have quickly embraced these trends, SMEs (Small and Medium-sized Enterprises) often face unique challenges. However, adapting to these global trends can provide significant benefits, helping SMEs scale efficiently and attract a broader market. Commenting on this, Shin said, “…this is a global trend and is something crucial that needs to be addressed.”

Sustainability and technology are driving forces in the global market. Consumers and businesses alike are increasingly prioritising environmentally friendly practices and advanced technological solutions. For SMEs, this means that adopting these trends is crucial not only for compliance and marketability but also for staying competitive.

According to Shin, these changes will be a challenge for SMEs as they often operate with limited financial and human resources, making it difficult to invest in new technologies or sustainable practices.

Other than that, she said that Many SME owners focus on immediate business needs and cash flow, which can overshadow long-term investments in sustainability and technology. “SME business owners need to shift their mindset, viewing sustainability and technological integration not as costs but as investments that can help their business grow,” she added.

YYC’s TaxPOD: The Importance of Tax Education for SMEs

Tax education is a critical yet often overlooked aspect of running a successful small or medium-sized enterprise (SME). A thorough understanding of tax matters can significantly impact an SME’s financial health and compliance, enabling business owners to make informed decisions and avoid costly mistakes.

Many SME owners and even accountants may lack a comprehensive understanding of tax concepts and regulations. While financial professionals are typically well-versed in preparing financial statements and grasping accounting principles, they may not be as proficient in tax matters. This gap in knowledge can lead to misinterpretations and errors, as tax and accounting are two distinct disciplines with different rules and principles. “We help SME owners and their accountants understand tax better, enabling them to plan expenses effectively, engage in proper tax planning, and avoid unnecessary tax payments,” Chau said, explaining the company’s initiative.

Effective tax planning is essential for maximising deductions and optimising expenses. Without a proper understanding of tax regulations, SMEs may miss out on opportunities to reduce their tax liabilities. Tax education enables business owners to plan their expenses strategically, ensuring that they qualify for tax deductions. This proactive approach not only reduces the overall tax burden but also contributes to better financial management and resource allocation.

YYC, Group Executive Chairman, Chau Yap

Towards an International Accounting and Advisory Firm

“The investment from OCBC Bank from 2019 to 2023 was a key catalyst in YYC’s growth, enhancing both our reach and capabilities,” Shin said. The partnership provided crucial financial resources and strategic advantages, allowing YYC to leverage OCBC’s extensive network to tap into broader markets.

It also strengthened their technological capacity and service offerings, which are essential for delivering solutions on a global scale. “…OCBC’s backing has enhanced YYC’s credibility, facilitating our entry into new markets with greater confidence and aligning with our objectives to expand internationally,” she added.

Building on this momentum, YYC recently partnered with SeaTown Private Capital Master Fund, a leading Asia-focused investment firm, t accelerate their growth strategy, granting access to SeaTown’s expertise, international network, and capital resources. The proceeds will fund planned acquisitions in Malaysia, Singapore, and Hong Kong, expanding YYC’s portfolio and enhancing our ability to serve clients across the region.

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