Mid-Tier Power Index Profile: EQ Accountants

In September, Accountancy Age proudly launched the inaugural edition of the Mid-Tier Power Index (MTPI): a brand new ranking designed to highlight excellence in the accounting industry’s mid-market.

The MTPI seeks to go beyond typical, financial metrics. While Profitability & Growth was taken into account, the entrants were also assessed on Strategic Planning, Professional Excellence, and People & Community.

Securing 22^nd place in the ranking was Scotland’s EQ Accountants. The 17-partner firm fared well across all four categories, demonstrating increased focus on talent and service delivery whilst also seeing bottom line growth.

During a conversation with Accountancy Age, David Morrison, partner at EQ Accountants, walks us through the firm’s credentials in each of the judging categories, explaining how a personal, community-based approach to service delivery has allowed the firm to establish a unique identity in a crowded market.

Strategic planning – ‘It’s all about relationships’

DM: This is probably going to be relevant to all of the sections, but I’d say we are unique among mid-tier firms, running primarily as a general practice. We don’t use separate departments for things like tax, audit, or corporate finance, though we employ many specialists.

What we do is curate a team of people who are highly skilled general practitioners, and we invest heavily in training them across the board. I would put our staff up against any of their peer group in Scotland and say that their tax or audit skills for example would be better than most others.

EQ is all about people doing business with people. In the East of Scotland, which is where we are based, there’s not much of a corporate culture. It’s all about relationships between individuals, and that’s one of the reasons why we focus on general practice as opposed to specialist departments.

To support that, we’ve made sure that every client has three direct points of contact – a Partner, Manager and Controller. If you speak to any potential client, their complaint is typically that they can’t get hold of their accountant. For us, if we haven’t replied to somebody within 24 hours, we’d be really disappointed in ourselves.

The other thing is, when you operate in separate departments, the risk is you don’t get to know the client well enough. But we’ve got people who know their client’s business, their family, and the sector in great detail, and that makes a massive difference for us.

Our strategy is to use that structure to specifically target what we consider to be quality businesses. Each of our offices has a client recruitment committee which identifies and assesses targets, and makes an approach accordingly. What that means is we don’t waste our time on businesses that will never use EQ. So I think we’re very focused.

People & Community – Soft skills ‘really important’

DM: Training is key for EQ. For example, we have a three-year tax training programme, and the aim of that is to effectively take someone from having no knowledge to being highly adept in tax advisory work. And what’s important is that these people don’t necessarily need to understand the detail of the rules – they need to understand the problem. If you can identify the problem, there’s usually a solution. So our staff are trained with that in mind, and we do a lot of that kind of training on a technical level.

Soft skills are also a really important part of our approach to training, we offer a lot of mentoring around things like professionalism and case studies on how we work with clients. Our aim is to try and allow our staff to grow and develop, and understand why we do things the way that we do them.

We do this because we think it’s really important for people to understand business. You can train anyone to become an accountant, but I don’t think it’s as easy to train someone to be an advisor. So what we’re trying to do is develop people to have a good commercial baseline understanding of how other business people operate.

All of that has a real impact. You can’t legislate for someone leaving the area or wanting a career change, but we rarely lose people to rival local firms, and I think that’s because we’re viewed as an employer of choice in our area, based on the reputation we hold for developing great people.

Professional Excellence – ‘Going above and beyond’

DM: What we try to do is identify the embodiment of great customer service and apply it to each line of business. I think what that comes down to is identifying the little things that make a big difference in terms of the overall experience of clients.

So for example, instead of asking when the client is going to deliver their accounting information we need, we’ll ask if we can come and collect it. And if the client says they work until 5pm and can’t make themselves available until 6pm, then we’ll meet at 6pm. Our culture is about going above and beyond.

The last few years have obviously been quite challenging operationally, but what we’ve been able to do very quickly is get on the phone with clients and communicate all of the support and guidance that they need. And I think the client goodwill we received from that extra effort has hugely strengthened our client relationships.

Ultimately, you build a business by retaining your clients. So for us, there’s no point in adding new clients if you’re losing them at the other end. I think that’s the mistake many other firms make.

So when we talk about culture, it’s the relationship led service we’re trying to create. When you go into the big cities there’s more of a commodity in the service, but where we are, it’s about people doing business with people, and I can’t stress that enough.

Profitability & Growth – ‘What we sell is the relationship’

DM: We’ve set ourselves a target of £9.5m for 2022-23, and we’re already ahead of that target, pro rata, despite being not even half way through the year.

I expect our percentage growth may not be as spectacular as other firms, and that’s fine as for us, it’s not just about top line growth., It’s actually the quality of the clients we have that will allow us to grow long-term. If we have a client for 20 years, it’s far better than winning a new client and losing them the next year.

We do set some fairly ambitious targets and we believe we’re going to get close to £10m by March 2023, but it’s just a number. We’re not trying to be biggest firm in the world, or even the biggest in Scotland. We’re trying to be the best.

EQ never sell products. What we deliver is a business relationship.

What are the firm’s biggest challenges right now?

DM: For us staff recruitment is the number one challenge. We’ve got great people and we think we’ve got the right service model, but adding new people is a constant challenge.

We’ve ramped up our student recruitment significantly in the past couple of years, and we’re doing it again just now for the 2023 intake, but for us it’s critical to identify the right type of person. As I said earlier, we can train anyone to do the technical stuff, but what we need is people with the right mentality.

We will of course face some economic challenges, but because we’re in the East of Scotland, we tend not to hit the highest peaks or the lowest lows economically. But the challenges will certainly hit our clients, and it’s our duty to support them through that changing environment.

And it comes back to the recruitment piece – we need to make sure that we have the right people and enough of them to deliver that tailored service to our clients.

What are the firm’s plans for the near future?

DM: I think what we’re seeing in the profession at the moment is that we’re gradually seeing people automating everything they do and becoming paperless. We’ve invested pretty heavily in being a Platinum Xero partner for example, and we’ve got a lot of people who are very adept with that kind of work. So I think certainly over the next two or three years, it’s an important goal for us to automate everything that our clients are doing.

Beyond that, I think it just comes down to continuing to grow in our key sectors such as agriculture, healthcare and leisure, and trying to recruit the best people, to win the right clients that create opportunities for our people.

Of course we’d love to be a bigger practice by turnover, have more people, operate in more sectors and have more good-quality clients, but we have no ambition to be the ‘number X’ firm in Scotland – it’s just not relevant to us. We’ll grow by being great at what we do, offering tailored, relationship led support and advice.

The full rankings for the Accountancy Age Mid-Tier Power Index 2022 can be viewed here.