Smaller accountancy firms are being obliged to come up with new approaches to
keep their practices intact during the recession.
Many face the prospect of clients going bust or being unable to pay their
bills. Firms say that they are following the same advice they are giving to
their clients – manage cashflows, reallocate staff, freeze recruitment and look
for new ways to boost income.
Some are transferring their qualified professionals out of disciplines into
compliance, insolvency and corporate restructuring. But the firms that have been
competitive and profitable in the last decade are planning to retain their
Christopher Jenkins, managing partner of Wingrave Yeats Partnership, says
uncertainty is a major factor for firms as well as clients. ‘The usual market
dynamics do not apply and no one knows when this period will end,’ he says.
Jenkins adds the firm is redeploying staff in marketing and research. ‘It is
hard enough to find good quality people in a competitive environment. It is
exactly at times like these that we need show our commitment to them.’
One of the key trends has been clients looking for high quality work but at
more cost-effective rates. This is where well-managed smaller firms are picking
up work from national mid-tier firms.
Practices like Wingrave Yeats in London and Peters Elworthy & Moore in
Cambridge say that they can compete against the larger practices because they
offer high quality services but meet the cost requirements of clients.
Paul Chapman, PEM managing partner, says: ‘Seven years ago we took the
decision to structure on corporate lines. We created a series of specialisms
including not for profit organisations, property, agriculture and professional
practices. Our sector knowledge and expertise in these disciplines is helping us
to respond to the economic environment.
‘We have a corporate finance practice of four, for example, and although the
work has flattened out, we are deploying the team in marketing and research.’
In Sussex, the largest regional firm Spofforths, is assigning its corporate
finance team to assisting existing clients with processes to help them handle
the recession. Partner Charlie Eve says the firm is doing a considerable amount
of work on helping clients with cashflow.
‘The banks are asking for more management information when they review
facilities for our clients.
Previously the banks asked for management accounts. Now they want us to
provide an independent audit to give extra credibility to the numbers. We are
effectively doing full accounts. Staff working previously on corporate finance
assignments are now helping to support our compliance teams.’
The extent of the work being done by accountants for their clients, often on
a non-chargeable basis, has not gone unnoticed.
Stephen Alambritis, of the Federation of Small Businesses, says: ‘Many
accountancy practices have been extremely flexible with their clients. They have
seen – earlier than some other professionals – that they if they help their
small business clients in difficult times, then these relationships will become
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