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April 29, 2009

A Latin alternative

Globalisation, a common trend among accounting networks these days, does not appeal to SMS Latinoamérica. The world’s fastest-growing network is more concerned about serving its own region than global domination. Arvind Hickman catches up with two of the network’s leaders.

 

SMS Latinoamérica provides a full range of professional services to clients in Latin America and the Caribbean. It is the largest network solely focused on Spanish-speaking clients.

In last year’s International Accounting Bulletin world survey, SMS Latinoamérica grew combined revenue by 36 percent to $52.3 million in the year to May 2008. This made it the fastest-growing network in terms of fee income and the third fastest-growing accounting group overall.

This financial year’s fee income forecast has already grown to $61 million. The network has 1,660 staff in 26 countries, which includes a blanket coverage of Latin America and the Caribbean.

SMS Latinoamérica was established in 2002 by the network’s founder firm San Martin, Suarez y Asociados in Buenos Aires, Argentina.

“We understood if we could serve the almost 600 million people speaking the same language, having the same problems and requiring the same necessities, we would be a successful network,” SMS Latinoamérica executive director Alfredo Spilzinger says.

“We started preparing for SMS Latinoamérica in 2001 with the knowledge that the future of our profession would be a network of regional networks. First we spent one-and-a-half years creating the methodology for our organisation and working out what it was we were going to launch.”

The early days

The first member to join the network was Uruguayan firm Kugelmass Kovner in 2002.

“We started working with them back in 1992-93 but it was not under a contract. We shared practices, giving them some instructions for certain clients,” SMS Latinoamérica president and founder Pablo San Martin recalls. “Close to 2000, after a decade of sharing clients in a non-regulated way, we decided to become a global organisation, so we put in place all the contractual relationship.”

Firms in Chile, Bolivia and Peru soon followed. Today, as the whole region is covered, expansion occurs within countries.

Spilzinger, formerly a Latin America regional director of Grant Thornton, has been instrumental in finding suitable firms. He says member firms must meet high quality standards and when they join they become the exclusive firm in that region.

San Martin, Suarez y Asociados is the network’s biggest firm and also houses the international secretariat. The firm is the sixth largest in Argentina in terms of annual revenue, with fee income of ARS33 million ($9 million) in its most recent financial year. It has nearly 400 professionals.

Another strong SMS firm is Marambio, Gonzalez y Asociados in Venezuela, the fifth largest in its market.

In Brazil, SMS Latinoamérica is planning to open new offices in Belo Horizonte, Manaus and Brasilia. Similar expansion plans are being implemented in Mexico and Columbia.

Quality first

Although expansion has been rapid, the network insists this has not come at the cost of quality. Last year, SMS Latinoamérica was granted full member status of the Forum of Firms. To maintain high standards, SMS Latinoamérica has its own training centre in Buenos Aires, a department of internal quality control and even a software development centre – all based in Spanish

“The aim is to integrate with just one methodology to all the member firms,” San Martin explains. “We are also planning to teach this international programme in Panama, together with the University of Bologna, for our members in Central America and the Caribbean.”

The network has budgeted $500,000 towards training and software development.Training covers core topics such as Sarbanes-Oxley, forensic audit, corporate governance and money laundering prevention.

SMS Latinoamérica has no plans to expand its operations outside Latin America but can serve multi-national clients through alliances with other regional networks. These are Fidunion in Europe, the Talal Abu-Ghazaleh Organisation in Middle East and the ASNAF group in South East Asia.

“Our long-term strategy is that this alliance will become a giant network of networks,” Spilzinger says. “We were talking about this during our [April] meeting in London.”

SMS LATINOAMERICA

Major firms and regional details

ASPR Auditores e Consultores

Country

Brazil

Fee Income

BRL8.8 million ($4.1 million)

Staff

116

Professionals

79

Partners

3

Offices

2

SMS Mexico

Country

Mexico

Fee Income

MXN16 million ($1.15 million)

Staff

115

Professionals

79

Partners

4

Offices

3

SMS Argentina

Country

Argentina

Fee Income

ARS35 million ($9.41 million)

Position in market

5th (workforce) 6th (revenue)

Staff

492

Professionals

391

Partners

46

Offices

24

Marambio, Gonzalez y Asociados

Country

Venezuela

Fee Income

VEF25.7 million ($12 million)

Position in market

5th

Staff

128

Professionals

99

Partners

8

Offices

1

SMS Latinoamerica

Region

Latin America, the Caribbean

Fee Income

$61 million

Staff

1,660

Professionals

1,297

Partners

155

Offices

59

Source: SMS Latinoamérica

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