Now more than ever the smaller independent practices need to demonstrate entrepreneurial flair and good business skills if they are to steer both their own and their clients’ businesses through the troubled waters that lie ahead
Clients will be looking to their accountants to offer them the advice they
need to manage their businesses more effectively and to help them develop
solutions to their problems.
The key to success lies in knowing your clients – traditionally one of the
independent sector’s greatest strengths – and being able to offer them the added
value services they need to support their businesses.
Proactivity is vital: wait until the client shouts for help and it may well
be too late. Rather, practitioners should be recommending action to stave off
the problems before they arise.
This can only happen if the structure of the firm allows everyone to play to
This means that firms need to ensure that the right partners are in the right
roles. The technicians need to be concentrating on improving the speed and
efficiency of work production, while those with business development skills must
spend their time working with clients as well as applying their expertise to the
For firms where partners still manage their own portfolios this could present
Good financial management is still a big problem for many firms and they need
to get to grips with timely billing, cash collection, WIP and debtors.
The impact of cash flow on profitability is fundamental to success in any
business, but something many firms struggle to put into practice.
It is not simply a question of working harder, but working smarter.
Unfortunately a number of small firms are likely to find themselves in trouble
and I expect the mergers and acquisitions market to be very active in the next
Phil Shohet is a director at Kato Consultancy and
regular columnist on sister publication Best Practice. He has begun writing a