Julian Roylance has a very clear idea of just where he wants his Macclesfield-based Mead Roylance practice to be in two years’ time.
He expects fee billings to surge past #1m, serviced by a 12 to 15 strong team, including the partners. ‘And that’s far smaller than a practice making that level of fees now,’ he says. In the last two years, his practice has doubled the level of its fees and nearly doubled billings to #400,000.
Mead Roylance’s success is down to a focused strategy for practice development.
Roylance and his fellow partner Damien Mead know the kind of clients they want, and the range of value-adding services that they plan to offer them.
So, in the past couple of years, some existing clients, mostly self-employed tax businesses, have been shown the door, ‘in the nicest possible way – we have moved them to other accountancy practices’, and the practice has focused on recruiting new corporate clients.
Everything about the way Roylance and Mead run the practice has changed since the two went on a ‘boot camp’ run by Results Accountants’ Systems two years ago. Now there is much more focus on client care driven by a culture change in the practice itself.
‘We have transformed ourselves from a professional services firm where we were operating on an hours-timesrate basis with an historical bill after the work is done, into an advisory service that provides a price list upfront with payment upfront,’ says Roylance; ‘And our clients love it.’
The new conventional wisdom in the profession is that accountants must turn themselves into business advisers operating in a more customer-focused way.
But can it work? The evidence from Mead Roylance suggests it can, but there are sceptics who believe many traditional accountants in practice are ill-equipped to offer business advice (see box, left).
There are two separate issues intertwined in practice development. One is the nature of the services provided – moving beyond accustomed professional services such as tax advice and auditing toward business development and consultancy. The second is how to serve clients, irrespective of the nature of the services offered. It is perfectly possible to change the second without buying into the first.
Certainly many practices are long overdue for a sharp lesson in customer care. John Clarke, business development partner at the Hoddeston, Hertfordshire office of Hardcastle Burton, says one of the greatest problems is ‘perceived indifference’. He says: ‘As a practice, we were never indifferent to the needs of our clients, but some of them had the perception we were.’
Like others, Hardcastle Burton has tackled this issue through improved communication. The firm’s Hoddeston office has overhauled the way in which it interacts with clients – from the way staff answer the telephone to the way they present advice.
Mead Roylance actively encourages clients to use email as a way of improving communication. It even offers to install the email software in their offices.
And to underline the effectiveness of electronic communication, the firm offers a free email advisory service. Roylance points out: ‘It’s good for us too, because it means an enquiry comes in digitally, and we can progress it with no paper.’
Hugh Williams, partner in HM Williams, a practice based in Dartmoor National Park, is another who is changing the services he provides and the way he offers them. He now offers a business advisory service based on reviewing every aspect of a company’s activities using a detailed questionnaire.
‘If the client doesn’t think the day is worth the money, they won’t pay a bean for it’, is his guarantee.
Williams applies three scales of fees to the service. A large business pays #3,200 for the day, a business with a turnover of less than #100,000, or profits below #50,000, pays #2,000, and a loss-making company just #750. Williams believes this kind of activity can generate future business which in turn boosts fee income.
A common motivation for all the practices using the Results’ approach to change their methods lies in providing more certainty for clients about the level of fees, and trading that off against early payment.
Williams now bills for tax-return work upfront. ‘But that covers all the work we will do on the tax return, including all the phone calls from the client,’ he says. He warned his 250 tax return clients of the new policy in two letters. Not one objected to the change.
Roylance finds this approach paves the way for better, not worse, client relations. ‘If you take the cost issue out of the picture – get it out of the way early on – everything else you do after that is adding value.’
Mead Roylance has also taken a close look at the services it charges for, and those it traditionally provided free. For example, the clock no longer starts ticking when a client telephones with a query or for some advice.
‘Our clients know they have unlimited free access all year round,’ says Roylance. ‘Their organisation can phone anybody in our firm and get advice.’
On the flip side of the coin, services that were previously given away are now more carefully structured – and charged for. Roylance says: ‘We have an order-processing system so we are run like a business. If a new assignment crops up, we make out an order setting out the outcomes the client will have.’ And, of course, the price.
Stephen Chang, chairman of Morison Stoneham, a 17-partner practice with offices in London, Chelmsford, Guildford and Swindon, is also enthusiastic about developing business advisory work alongside the company’s traditional accounting practice.
His firm organises an annual ‘Value Added’ seminar, which is attended by some 200 participants.
‘The seminar provides clients with good business development ideas that they take away and use in their own companies,’ says Chang. Issues discussed include how to successfully differentiate a company from its market rivals.
Chang points out that the seminar is also a useful recruiting ground for new clients.
But while all these practices are now reaping benefits from their business development activity, they admit it wasn’t easy to implement. Most met with scepticism – or even outright hostility – when they first started to change. Some have had to shed staff who weren’t able to adapt to the new culture.
Building better communication between the members of the practice so they understand the reasons behind change, and can discuss problems is another key to culture shift. Says Clarke: ‘We have team meetings every month when people can have a full open and frank discussion. When we started people sat around with their arms folded and legs crossed, and didn’t open up much. Now if anybody has anything to say, they don’t wait for the team meetings – they talk to each other and sort it out.’
One feature of the culture change at Clarke’s practice is ‘fun breaks’, including games such as noughts and crosses and Easter egg hunts. ‘The senior partner came into his office once and found us all playing “Pass the Parcel”,’ reminisces Clarke.
Mead Roylance has come up with a concept they call The Huddle, a 20-minute communication session held every other day. ‘On a more formal basis, we have weekly team meetings and client management meetings,’ says Roylance.
‘Everybody knows that at any point they can call a little meeting to discuss something. Ideas that come from the team are implemented as soon as possible.’
Accountants who buy into the Boot Camp philosophy frequently speak about its effect with an enthusiasm bordering on adoration.
But not every practice is so keen to be converted. For example, only one of the five offices in Hardcastle Burton has taken its ideas on board.
‘The other offices are successful and don’t see a need,’ says Clarke.
‘They believe that if it ain’t broke, don’t mend it.’
GOOD ADVICE: DON’T FALL FLAT ON YOUR FACE
Richard Murphy believes accountants should not necessarily set up as business advisers. The senior partner in Middlesex practice Murphy Deeks Nolan, he is chairman of one company, chief executive of another and company secretary to a third.
He reckons his hands-on role in business qualifies him to offer advice.
But he also says: ‘I don’t think most accountants are qualified to do it, and will fall flat on their faces if they try. It’s no credit to anyone in the profession if people try to do something which they simply aren’t up to doing.’
Murphy says the harsh reality is that most accountants don’t come face to face with business problems: ‘And if they do, they don’t know what to do about them.’ That is because of the fundamental difference between management accountancy and being a manager. ‘The first is preparing data – a technical application of skill. The second is a human skill – interpreting data to suit the stated objectives of an organisation. Nothing in accountants’ training that I know of prepares them for the human aspect of management.’
Murphy makes it clear that some accountants are qualified to offer business advice, usually because of first-hand experience. And he suggests that it is important to value the professional skills such as auditing and tax. ‘People who want to sell those skills shouldn’t be made to feel like second-class citizens.’
He believes many accountants have only the barest notion of the business performance of their own practice. ‘When I mentioned management accounts at one accountants’ conference, I got a completely blank look. Almost none of them knew what their financial performance was in the last month.
Most didn’t know what it was in the last year.’ Which hardly qualifies them to advise other companies on broadly-based business issues: ‘I have seen so many business plans prepared by accountants who don’t understand the interaction between balance sheet, profit & loss account and cash flow. I think most accountants have no idea what the performance criteria are that drive their own businesses. And if they can’t do it for themselves, nothing suggests they know how to do it for somebody else.’
Peter Bartram is a freelance journalist