If they are to survive, small firms must endeavour to offer the best service possible. At Accountancy Age we want to reward this pursuit of excellence amongst the smaller practices through our Small Firm Accountancy Age Award.
Our panel of expert judges will be looking out for the key quality of adaptability in the face of globalisation and fierce competition in the marketplace.
The panel will be looking at how firms have added value to clients; how their management structures have developed in the past 12 months to improve client focus, effectiveness and innovation. Financial performance will also be scrutinised.
Perhaps the most significant issue for all firms, whatever their size, has been technological advances. Small practices – often seen as IT luddites – have fought back, proving they are well placed to drop old business practices in order to streamline and attract clients.
Many small firms have recognised the need for constant change and renewal – the need to upgrade IT and respond to clients’ changing demands – by developing niche practices. Firms that have resisted change could yet fall by the wayside.Rabjohns, a Worcester-based business and tax advisory firm, ceased to be a traditional chartered accountancy firm four years ago and now offers broader services. Understanding the impact technology would have on business life, the five-partner firm updated its daily management and is now well placed to continue responding to market changes. At an average of 15%, the firm’s growth rate is an indication of its effectiveness.
‘The challenges for us now is the continued innovation of the day-to-day management,’ says managing partner Ian Smith.
Innovation was just one quality displayed by last year’s winners of the small firm category. Up against tough competition, the 10-partner firm Wingrave Yeats took the accolade.
The judges applauded the firm for its client-centred approach, the positive attitude of its staff and its strong average fee growth rate of 30%. Audit partner Trevor Roberts says: ‘Winning the award has helped us a great deal in terms of recruitment, cultivation of links and credibility with clients.’
The firm does not expect last month’s increase of the statutory audit threshold to have a detrimental effect on future growth. In fact, increasing the threshold to £1m has been viewed with optimism by many small practices.
‘Our role will be as strong if not stronger in the future,’ says Peter Mitchell, chairman of the Small Practitioners Association. ‘We can happily do without the annual audit contracts. The hike has freed us up to spend our time more productively on other issues.’
Such forward thinking has been vital to small practitioners in the battle to keep afloat in the rapidly changing world of business. Most now offer a range of professional services and no longer see audit contracts as their bread and butter.
Rabjohns’ corporate services partner Chris Brooks says that ‘although the benefits of the statutory audit should not be forgotten, these new thresholds now give smaller firms far more scope for strategic and financial planning to take their businesses forward’.
In general the greatest concern resulting from the audit hike has not been the potential loss of work. The real worry remains the future of trainees in the sector.
UK institutes are seeking to allay these concerns by highlighting the recent revision of their syllabuses and the relaxation on the rules about audit competencies. And, modern training focuses increasingly on comprehensive business skills as well as traditional expertise.Nevertheless, many small firms struggle to cope with the importance of these and other challenges. Internet use, for instance, looks set to make inroads into traditional areas of work.
Ken McManus, assistant director of member services at the Scots ICA is clear that survival depends on a firm’s willingness to embrace internet use. ‘The importance of desktop access will probably [be that it will] precipitate the demise of the older, smaller practitioners, but the younger generation of accountants will have no problems,’ he explains.
At least half do not have desktop internet access and have subsequently struggled. Most of the Budget reports were published via the internet this year. The Inland Revenue also posted much of its IR35 guidance online too.
It’s an illustration of how far the laggards of this sector still have go if they are to maintain independence and competitiveness. The Accountancy Age award, like last year, will make this imperative even clearer.
For more details of the awards, visit the AccountancyAge.com awards mini-site at http://www.accountancyage.com/awards
A message from our sponsors: Sage
Sage is pleased to sponsor the Small Firm award again this year, recognising that Accountants Club members are in the main, smaller firms. In a highly competitive and changing market, accountants should be spearheading the drive to provide value-added services to their clients – a challenge that many small firms are meeting head on.