How to leave accountancy . . . and run a practice

It was during the recession in early 2000 that Henry Ong decided on a different career path. As a student, he had completed a degree in applied economics and another in accountancy — even becoming a certified practising accountant — but the Philippine native had been motivated by something other than the profession itself.

“I wanted to study accounting because accounting is the language of business,” he says. “If you want to be good entrepreneur, you need to be good in numbers and studying accounting can give you a good foundation. I never wanted to work in an auditing firm or become an accountant for a company. I wanted to be an entrepreneur and I studied accounting to hone my financial skills.

“I thought it [accounting] was a boring job. I chose to work in the Philippine Stock Exchange where I started as a trader and broker and eventually became a stock analyst and head of research of my firm.”

Then, during the 2000 downturn, Mr Ong had an epiphany.

“I decided to retire from stockbroking and establish my own accounting firm with a partner who had experience working as a senior auditor from a top three firm,” he says. “It was where I learned to pitch to clients for bookkeeping service, auditing, and internal control review.”

Mr Ong did more than swap the stock exchange for an accountancy office; he is now the CEO of the National Institute of Accounting Technicians in the Philippines, which in August signed a Memorandum of Understanding (MOU) with the IPA.

Born and raised in Manila, Mr Ong completed all his schooling and tertiary education there. “I now live in the National Capital Region, which is more commonly known as Metro Manila, where the seat of government belongs,” he says. “Metro Manila is the second most populous and the most densely populated region in the Philippines, with over 12 million people. This is where the biggest central business districts in the country are located.”

When Mr Ong and his partner started their business, it was like most other start-ups — focused on getting clients first and building from there. It soon became obvious to him there was a market just waiting to be serviced.

“As a start-up accounting firm, I focused on selling our services to small business clients and corporations,” he says. “During this time, as we were growing, we were hiring accounting graduates to do the services for our clients. I realised that there was a need to get special types of accountants that can service the needs of small and medium-sized businesses, such as payroll, tax advisory, costing, pricing, and bookkeeping.

“This led me to eventually introduce the Certified Accounting Technician (CAT) designation in the country, which now has over 30,000 members.”

Over the past 20 years Mr Ong has seen a lot of changes in the accounting sector in the Philippines and, even though it remains a developing nation, the pandemic hit it just as hard as much bigger, more prosperous countries.

“The accounting profession in the Philippines is almost 100 years old now. It was officially introduced in the early 1920s,” he says. “Over 10,000 accountants every year take the Certified Public Accountant board exam and only 20 per cent or less pass the government-mandated CPA board licensure exam.

“Accounting education has gone through a lot of changes through the years, and I think one of the biggest was the introduction of the International Financial Reporting Standards. This has changed the way accounting is studied and practised on so many levels and it keeps changing to this day.

“Of course, because of the pandemic, the whole economy suffered. When businesses are losing, the auditing industry will also earn less because they will charge lesser fees.

“The mandatory lockdowns also limited the mobility of people and productivity as a whole. Many accountants could not work effectively when they were working at home because of mental stress and overtime, not to mention limited access to records and collaboration with clients.”

Mr Ong says the biggest challenge facing accountancy in the Philippines is the digital transformation of the industry.

“The use of accounting technology and software has given birth to the business process outsourcing industry,” he says. “There is a significant shift in accounting to digitalisation. Invoices are being scanned and read by accounting software. Accounting records can be stored in QR codes now. 

“Before, you needed to go to the bank to request a funds transfer. Today, you can do it from the comfort of your room. There are a lot of changes happening and I think this will continue in the future. Accountants today not only need to learn about accounting principles, but also technology and analytics.”

And the MOU signed with the IPA will go a long way to helping accountants in the Philippines keep up to date with the myriad changes occurring.

“The MOU with the IPA will mean that our accountants, especially the CAT members of the National Institute of Accounting Technicians, will be recognised for their skills and experience in accounting,” he says.

“This recognition will give accountants in the Philippines the chance to become members of a global organisation like IPA and IFA, which can lead to greater job and promotion opportunities.”

Mr Ong says the Philippines, like most other countries, is trying to navigate the economic headwinds of high inflation, labour shortages, and supply chain issues while accountancy becomes one of the most in-demand professions.

‘I believe that we are in a cycle where inflation will remain elevated for some time,” he says. “A high inflation environment means that we also have a high interest regime. This is a good opportunity for people who like to save because this will give them higher interest income. If you have extra savings, this is a good time to buy bargain blue-chip stocks for the long term.

“I’ve learned that accounting is a very in-demand profession. Every business needs a good accountant to succeed. Every business owner or entrepreneur needs a good financial report and advice of an accountant to make the right decision.”