At the 1999 Accountancy Age Awards for Excellence to be held on Wednesday 3 November at London’s Natural History Museum, one of the most eagerly anticipated awards will be the category for Small Firm of the Year.
The Small Firm of the Year award, the first since 1995, is one of 12 award categories ranging from Large Firm of the Year to New Accountant of the Year.
Small accountancy practices are the unsung heroes of the UK economy, rarely grabbing a place in the limelight. But the small-firm sector is expanding fast and now offers many of the services previously restricted to the Big Five firms – such as IT consultancy and forensic accounting services.
In the small firm category, the judges will be looking for dynamic firms which have exceeded customer expectations and grown their businesses in a market that has tight profit margins.
The award is sponsored by Sage, the market leader in accounting software for small firms, and applies to practices with ten partners or fewer. This award provides small firms with an opportunity to raise their profile in the marketplace, highlighting specialist skills in different industry sectors.
Small firms certainly face tough challenges. The government hinted last month that it would raise the turnover threshold for company audits from £350,000 to £4m. This would exempt around 300,000 businesses from the annual audit, removing an important chunk of small firms’ work.
Small practices could also struggle to hold onto work next April when personal services companies, such as IT contractors, will no longer be able to avoid paying National Insurance, due to the Finance Bill. IT consultants will be forced to become employees of organisations they are working for and will lose their tax-efficient personal services company status.
Business associations and accountants have warned of a possible ‘brain drain’ on IT consultants as a result.
‘The change of this tax status is something we have to follow,’ says Peter Mitchell, chairman of the Small Practitioners Association. ‘The Inland Revenue seems to have led with its chin on this one. It could be a bruising battle,’ he says.
It is perhaps not surprising that a whole marketplace, offering business and practice development advice to small practices, is evolving to help firms develop a much more focused approach when it comes to managing and increasing fee income.
Many small firms are already taking advantage of opportunities in the professional servicess market. These rapidly growing firms are in line to be this year’s Small Firm of the Year.
Warrener Stewart, a five-partner practice based in Fulham, London, is pioneering a more rounded approach to auditing. Its founding partner, Danielle Stewart, calls this a ‘value added’ approach, involving a business risk services for the predominantly owner-managed client base. The practice is growing by about 12% a year.
‘We have an associated company that sells hardware, accounting software and also provides IT consultants. It allows us to get much more closely involved in the owner-managed market,’ explains Stewart.
Companies in the charity sector are always proving rich pickings for small firms. Harvey Guinan, for example, a two-partner practice in Liverpool, has carved a niche in the voluntary sector, says partner Julie Guinan. ‘The voluntary sector is quite a lucrative area,’ she says. ‘But you need specialist skills, like knowledge of government legislation and funding.’
Guinan adds that the firm also provides management accounting advice to small and medium-sized companies, including training clients in accountancy software.
Increasingly clients are demanding more advice on the use of technology.
A skills survey carried out in April by Accountancy Age and Sage highlighted the importance of IT skills among small practices. It found that, on average, accountants spend half of their working day – three and a half hours – in front of computer screens; and 69% have access to the internet, 45% from their work desktop.
The survey also confirmed that more and more firms were offering IT advice on what accountancy software to buy (82%), while others offered hands-on implementation advice.
Other firms are attempting to stay ahead of the pack by adopting innovative employee remuneration schemes. Body Dubois, a five-partner chartered accountant based in Surrey (which is also a limited company) is a case in point.
All professional staff, accountants and other financial services personnel, are paid by getting a proportion of their charge-out rates.
Contrast this with most other firms, where only partners get a slice of their fees and where staff are paid a flat rate.
The Small Firm of the Year award will demand a wide variety of skills ranging from IT knowledge to specialist reporting and forensic accounting skills to allow a rapid growth in fees. And this year, the competition is tougher than ever.
SPONSOR – SAGE
Sage established its Professional Accountants Division in 1998 to help accountants in practice build upon existing relationships with clients and develop new ones through the provision of market-leading software, expert advice and support services.
A key part of the Division is Sage’s Accountants Club, which has more than 4,000 members and is designed to enable accountants to provide the level of expertise on IT issues that their clients demand.
Entry is free, closing date is 30 July 1999
The ceremony will take place at a gala dinner on 3 November 1999 at the Natural History Museum, London. For an entry form, email: firstname.lastname@example.org or call 0171 316 9554.
Judges are looking for innovation, demonstrable results and an energetic approach to today’s professional challenges.
The Business Reports and Accounts category, for instance, provides enterprises with a chance to promote their financial reporting strategy. UK company reports filed with Companies House and published between September 1998 and July 1999 are eligible.
Given changes in corporate governance, for instance, non-financial disclosures may attract the judges. The extent to which companies map issues such as employee or shareholder relations, measurement of customer satisfaction, environmental impact and relations with the public in their reports will attract the judges.
E-commerce is also a growing tool in company reporting. If presenting results on the Web is a key part of your investor relations, you may want to consider entering this category.
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