Financial & Accounting Outsourcing in Brazil

Interview with Antoninho Marmo Trevisan, President of Trevisan

There is a mixed signal in the world: some say there is a slowdown in the Chinese and in the European economies. In your opinion, what is the way out from this slowdown for the Brazilian economy, especially for the private sector?

We are the exact opposite of what is going on in the rest of the world. Nowadays, there is a high demand on skilled labour in brazil. Companies want to hire and they can’t find the right people they need. We actually have an exchange problem because of the Brazilian success and the consequent foreign investment. Brazilian currency appreciated enormously and it has created serious problems to Brazilian exporters. Cash flows multiplied more than fivefold in 2011. During the last three years, the foreign investment coming to Brazil has been superior to the one which entered Brazil since Pedro Álvares Cabral discovered our country.

We can find internal problems, such as energy, infrastructure, and lack of professional training, and this creates interest from foreign countries to invest in the areas of – for example – gas and oil.

There is a major demand from Brazilians for goods and services and this results in a price increase in restaurants, at hairdressers, etc. These personal services became more expensive because Brazilians have now money to pay for such services.

The key problem of Brazilian companies is that they can’t hire at the rate they would like and need. Brazilian universities and professional schools have tried to meet this demand. As a result, major schools like, for example, Harvard and MIT, are now present in Brazil and these universities are giving opportunities to young Brazilian people on a large scale.

According to the World Bank, Brazil this year ranks 6 places below its positioning in 2011 in the ease of doing business. Is it more difficult to do business in Brazil in 2012? What are your expectations for the future and what is your suggestion for the domestic reform? What should be done in order to improve the ranking for ease of doing business in Brazil?

Brazil used to be a relatively closed economy. Since we have companies opening up to the stock exchange market, the difficulty of doing business is creating a negative impact. Foreign investment is coming in but a lot of bureaucracy is still prevailing. Also, it’s generally complicated to open and run a business in Brazil. The public sector is trying to overcome these difficulties.

The tax situation continues to be a complex topic in Brazil: there are lots of taxes and the tax burden is very high. Business associations, unions, and governments are trying to solve the tax problem but solutions are not coming at an ideal rate.

Now, I would like to ask you about the accounting and reporting standards in Brazil.

The question of the accounting standardization started only recently in Brazil. Nowadays, the accounting principles and the balance sheets are being drawn according to international norms. The companies with shares listed on a stock exchange market follow the same norms as the European and Asiatic ones. Our school has today around 1000 students who are studying to become lawyers but they are also taking an accounting course to be able to understand the new accounting standardization.

What type of people are taking courses in Brazilian business schools? Do you have any contact with international schools?

Business in Brazil is growing so much and so fast that companies and their executives are demanding professional training solutions which are adequate to the new standards. Thus, Brazilian companies go abroad, foreign executives are coming into Brazil and schools are preparing the students for this situation. Trevisan, for example, is trying to capture international partners, so that the young Brazilians can obtain certifications and knowledge in new areas. My school trains Brazilians that can perform their professional tasks here and abroad, too. With that purpose in mind, we are open to any partnership with international schools. Our school is present in São Paulo, Rio de Janeiro and in the surrounding area of São Paulo.

Do you have factual figures concerning students, professors, etc.?

We have approximately 1500 students which are companies’ executives. We have accountancy and financial post-graduate courses to help companies to overcome their difficulties. The courses which are nowadays more demanded in Brazil are usually connected with international finance and accounting.

Which are the biggest problems/challenges you are facing?

Because Brazil was, in a certain way, stagnant, it didn’t develop its power to accelerate corporate process. For the first time in its history, Brazil incorporates 3 variables: we live in democracy, we have price stability and our economy is growing. These 3 factors are new in Brazil. Because of that we can find several difficulties in public administration, education, etc.

The public sector is trying to meet the demand and to help Brazilian people to become CEOs, to help them in terms of corporate management, and to help them develop business plans in Brazil and abroad.

And what about Trevisan’s challenges?

Trevisan’s biggest challenge is to produce and hire professional people and teachers. Also, of course, our challenge is to attract capital from people who want to share this great moment that Brazil is experiencing at the moment. We know the market; we know the products that the education market needs in terms of corporate needs. Yet, it’s all developing so fast that we can’t do it by ourselves. Therefore right now, we are looking for partners.

You also have a consulting and outsourcing business. What is the percentage of the business school and the outsourcing business?

It’s around $20 million for the education business and $20 million for the outsourcing business. Our audit company, which invoiced around $100 million was sold to KPMG. We offer accounting, finance and administrative services. We manage these activities for our clients. For example, if a company is planning to settle down in Brazil, it will need registrations, accounting, etc. and it’s definitely going to look for our services. We help foreign companies to settle in Brazil. 90% from our clients are foreign companies.

What is your advantage over big companies?

Audit companies can’t offer accounting services, so they send their client companies, which they audit, to Trevisan for accounting services. When foreign companies settle in Brazil they go to international companies like KPMG, Price Waterhouse Cooper or Deloitte and those latter send them to Trevisan because we have a 30 year old history in the market.

What is the interest in consulting for companies that settle in Brazil? Is the system very complicated?

The most important thing is that we take our clients and incorporate them into the Brazilian business world; into the Brazilian bureaucracy. We make it easier for our clients to start a business in Brazil by stepping forward with the right foot.

Is it really necessary to go through a consulting company when starting a business in Brazil?

Yes, and not just due to the bureaucracy! It’s very important for a company to arrive here and feel at home; to know with whom they are going to do business, which businesses they will be doing and with which companies they are going to interact, how to register legally, how to deal with Brazilian accountancy, etc. We support the first steps of our clients in an unknown country (to them).

Which is the biggest problem foreign companies face when arriving to Brazil?

Depending on the way you register your company, you will have different types of taxes. So, it’s very important to do the first steps with professional help.

Did it ever happen that a company came to you after feeling deceived by another outsourcing company? Is there transparency in the outsourcing sector in Brazil?

You have all types of companies: big, medium, and small. Trevisan is a big outsourcing company and we are prepared to assist companies of any size. We are an outsourcing company born from an audit company, so our standards are high. Also thanks to our business school, our team is very well-trained and qualified. Our professionals are constantly in training. You might not find such high standards in some other companies of our kind.

Is the corruption level in Brazil decreasing? What is the current trend?

I was a member of the Ethic Committee in Brazil and I’m a member of the Social-Economic Movement. I can confirm that the transparency level has been developing in a positive way during the last few years. For example, the question of corporate management is an issue that has already become a standard inside the companies listed on a stock exchange market.

Brazil has been able to take big steps in a positive direction. The sectors that take care of the opening up of Brazilian accounts require more transparency from private companies and government. For example, the private Citizens can now see public accounts. We also have a free and active press and the judicial system is now very well-organized. Nevertheless, there is still a lot to be done.