Dissatisfaction with accountants’ quality of service, professionalism and cost, combined with a slew of redundancies caused by the financial crisis in 2008 led to the launch of unique accountancy services, says Darren Fell CEO and Founder of Crunch Accounting.
In 2009, Fell launched his accounting software and service solution to take advantage of what he perceived to be a gap in the market.
“At that time in 2009, numerous people were being made redundant. They couldn’t get a job. They were going freelancing, they were going contracting, using all of their skill sets.
Research by the Office for National Statistics and Consultancy.uk charts how, after the global financial crash, “the number of self-employed individuals in the UK grew rapidly in 2009” as the self-employed community rose from 3.3 million in 2001 to around five million in 2017.
After an appearance on a radio show in 2009, Crunch was overwhelmed with clients.
“I pulled up one person after another and I heard all of their problems that they had. An accountant who quoted them about £1,800 for their very simple set of accounts, and it then came to five grand. They were horrified, but this actually turned out to be quite regular,” Fell says.
“The accountant disappeared, the accountant had run off with his secretary and left his wife and left the practice… All of these stories about the pricing and the poor service these people were getting, I realised I had done the right thing. This was exactly the right time.”
Hate mail
Crunch was created to help freelancers, the self-employed, startups and small businesses. And the raison d’etre is very personal to Fell, who believed the pricing of standard accountants was too prohibitive for the self-employed or small business owners, so started out with a cheaper pricing plan.
“We weren’t highly thought of, we were disregarded because we came out to the market at £750 when people were then happily selling accountancy services for £2,500.
“So, we were routinely hated, I was routinely hated and in the beginning, I got, I wouldn’t go as far as saying hate mail, but I got a lot of pretty poor emails and tweets from accountancy firms and accountants.
“I wasn’t trying to undercut them. I was trying to deliver a unique service with live tax that made it really easy for the end customer. But, to have the accountants on the end of the phone or on email or on Skype video, alongside an account manager – all for a pricing point I thought was fair rather than a really high pricing point,” Fell insists.
Nearly 11 years down the line, and the approach has changed somewhat. There’s an acknowledgement from Fell that “you can’t do everything yourself” and it has led to working with accountants rather than seeing them as competitors. Where Crunch can’t help, they now pass clients onto accountants who can.
“We’re building a Crunch accountancy network. Crunch, in terms of a full-service model fits a certain niche of customer and we’re particularly good at that.
“But we’re very good at saying, ‘oh you have a complex e-commerce site – that’s so not us. But we have amazing accountants up and down the country.’ So, we’re starting to build up this network.”
‘I’m not the best with numbers’
Last year, Crunch won Mid-Tier Firm of the Year (£10m-£25m) at the British Accountancy Awards, meaning Fell might also be the only winner that isn’t an accountant. But he is the first to admit he’s not great with numbers.
“I’m surrounded by numbers people and I always found the administration of running a business problematic. It really scared me.”
He’s not alone. Recent research by Starling Bank found small businesses spent 10 weeks a year on financial admin, work which often left traders feeling stressed outside of work.
Fell saw that stress in his friends who, like him, often worked freelance or as contractors.
“I don’t know how they did it every time, but they would be sitting in the pub with me going ‘oh no, I didn’t get my money put aside for the tax bill and now I’m having to do extra shifts and doing extra work to pay that.’”
The thought left him bemused.
“Surely, there must be a system out there that tells you exactly how much tax to put aside, can do a draft set of accounts instantly if you needed a mortgage or a loan, surely there must be some tech there with people on the end of the phone that are chartered accountants? No.”
Accountant or Fintech?
Ultimately, it leaves Crunch sounding not much like an accountancy practice at all. And indeed, Fell sees that too.
On top of their accountancy software and service package, Crunch produces reams and reams of content for the self-employed/start-up community and accountants for free, while plans are in place for a Youtube channel.
“The operation is unlike any accountancy firm you will ever see,” Fell says. “It’s a whole fintech operation, but we’re known as an accountancy firm because that’s primarily what we serve up.
“Everything is tech.”