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21 Jul 2010
Do accountants risk losing the trust of small businesses by not being able to look after their own financial affairs?
The answer is yes, according to Merseyside accountant Alan Woods of Woods Squared.
Citing the high profile collapse of Vantis, and other regional firms, Woods thinks it could prove "difficult to win the trust of small businesses" if they see firms collapsing around them.
Woods' statement is provocative but definitely arguable and worthy of debate.
My first instinct was "no", Woods is wrong. There will always be badly managed accountancy firms, of that there's no doubt. Other professional services providers, such as lawyers and IFAs, are certainly prone to this problem.
Those firms close to collapse can't expect clients to stick around, but that shouldn't really give any splash damage.
It just means that a client of a dying firm will simply move on to the next provider on the list, they'll expect they were just unlucky with the last lot and the next bunch will be there for the foreseeable. Of course, these days with the internet, live electronic communication and sharing of data, that doesn't necessarily mean within the same region as their previous provider of business services.
The more pressing problem for firms, which has been sucking the life out of them for years, is failing to recognise that clients want a broader range of business services than just compliance. This is where the image problem truly exists, as opposed to Woods' view, and will be the real downfall for many firms.
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Briefings
By looking at the reasons supplier statements became unfashionable, and the reasons why it is different today, this paper delves into the many benefits that can be obtained by automating the process.
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Visitor comments Add your comment
Is that true actually Kevin?
I think that mid size firms are well aware of the need to offer a broader range of services. Many of the thousands of smaller firms (those outside the Accountancy Age top 100) however struggle to persuade clients to agree to pay the additional fees that would arise if extra services are provided.
The real downfall for mid-sized firms (other than those with clear focus and niches) will be the squeeze from the largest firms and from the smaller firms. The larger ones are perceived as having more credibility for the provision of a wider range of services - when these are needed and valued. The smaller ones are able to provide compliance, advisory and special services more cost effectively. How many businesses really need to be served by halfway house firms of accountants?
(See recent comments on my bookmarklee.co.uk/blog about typical generic marketing by a top 30 firm.)
Posted by: Mark Lee, 22 Jul 2010 | 11:45
What a great resource!
Posted by: emt training, 22 Jul 2010 | 22:19
You're right Mark, at mid-sized firms level. However, studies perennially show at the smallest businesses are crying out for "business advice", as opposed to "compliance", and their accountants are best placed to give both - and many provide merely the latter.
I do appreciate that it's a false economy bleeding the smallest clients dry - cashflow problems appear out of nowhere. I still think their accountants could do more for them - helping clients grow builds enormous goodwill.
Posted by: Kevin Reed, 23 Jul 2010 | 20:36
I suspect we're in agreement Kevin.
My point was that although the smaller clients might want and need business advice, accountants are typically only willing to provide it if those same clients are willing to pay additional fees. All too often they are not. Equally there are many accountants who are unsure how to price/value such advice. One side or the other has to take a risk.
Posted by: mark lee, 25 Jul 2010 | 11:10
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