Review of the blog 2009

This blog has been a labour of love for well over 3 years now and contains in excess of 300 posts. Many have either come from my talks or have been incorporated into my talks and seminars. As 2009 draws to a close, you may be interested to see this personal choice of my posts over the last 12 months.  This has been an interesting review for me as it’s revealed a different way of categorising the subjects I have enjoyed writing about.

Summary

My output here dropped significantly as I only managed 60 posts in 2009.  I don’t feel bad about that though as I’ve also written well over 100 pieces for the TaxBuzz blog and posted almost 150 items to the Accountant jokes and fun blog.

Commenting on news items

The year started with me questioning whether it was true that “One in four firms expects to lose clients” and that there would be “A flood of mergers in 2009” I also suggested that Clients WANT more support in these trying times.

Other such posts in 2009 have addressed:

Conventional wisdom

Another theme on the blog this year was to challenge conventional wisdom:

Professional negligence

One of the most popular and frequent talks I’ve presented to groups of accountants over the last few years has been on the risks accountants run and how they can reduce these without tying themselves in knots. Among the related items I’ve posted to the  blog this year have been posts titled:

Face to face networking

The importance of effective networking skills is generally recognised but how do we improve our skills in this area? Here’s a selection of my posts offering tips and advice on this subject in 2009:

Social networking

A year ago I wrote a piece explaining why, in my view, Accountants do not NEED to both with twitter. What I was saying was that accountants need not bother with twitter especially if they think of it as a route to securing new clients. Since then twitter’s popularity has increased and I’ve noted more and more accountants are experimenting with it. As a result I then wrote a number of more positive and helpful pieces which are summarised on the twitter page of this site.

Other related posts this year included:

Top tips

I’ll complete this review of blog posts in 2009 with these reminders of key tips for accountants who are keen to be more productive and more successful:

With all best wishes for the New Year.

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Two new accountancy consolidators by 2011? I don't think so.

I’ve just read a headline suggesting that there will be more listed accountancy firms within 2 years.  This follows on from the news of the recent merger of Tenon and RSM Bentley Jennison. There are, apparently, two prospective consolidations in prospect at the moment.

A similar story first appeared on AccountingWeb last March following an announcement by Jobtel that they planned to launch a new consolidator in the UK in 2010. This prompted me, in my then role as Guest Practice Editor, to look back at the successes and failures of previous consolidations in the accountancy marketplace. My piece was titled: Will a new accountancy consolidator be any more successful? I was unequivocal in my view that were major obstacles to overcome.

I remain of that view. To paraphrase my comments in March:

1 –  Profit forecasts

Where is the financial incentive for anyone to invest funds in an aggregation of accountancy firms whose profits will shrink post consolidation? Remember all partners’ profits shares will become salaries and subject to 13.8% employers’ NICs. This additional cost will dwarf the hoped for cost savings. If profit forecasts and projections are realistic it’s hard to see a real financial incentive for investors who understand the marketplace.

2 – Partners’ earnings

Again the Employers’ NICs are likely to reduce partners’ prospective earnings in the short-term. Will the hope of capital growth (and it can only be hope) be sufficient compensation for the reduction in drawings and profit shares? I doubt there are many younger and middle aged partners who will willingly forsake their current earnings for prospective capital growth.

The only way around this would be for the consolidated practice to retain some form of LLP structure (as Numerica attempted latterly to introduce). Whether external investors would still be interested in such practice remains to be seen.

Julian Hamilton of Jobtel responded to my comments in March and indicated on the AccountingWeb thread that the partners would receive proceeds from the sale of their goodwill to the new entity and could invest such monies to top up their post consolidation earnings; he also noted that top ups would also come, in time, from  dividends paid by the consolidated practice.

3 – International association

Could a new consolidated practice achieve traction without being part of a decent sized international association? Are there any left that do not currently have adequate UK representation? Would a new consolidated practice have sufficient ability to service work referred from overseas or would such expertise need to be recruited – at additional cost?

4 – Management and leadership

This will also be a challenge as has been shown by those who have gone before.

In my AccountingWeb piece I wished Jobtel well (and I still do, though my cynicism remains).

What do you think? Have you ever considered joining a consolidator? What would attract you to the idea?

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Two new accountancy consolidators by 2011? I don’t think so.

I’ve just read a headline suggesting that there will be more listed accountancy firms within 2 years.  This follows on from the news of the recent merger of Tenon and RSM Bentley Jennison. There are, apparently, two prospective consolidations in prospect at the moment.

A similar story first appeared on AccountingWeb last March following an announcement by Jobtel that they planned to launch a new consolidator in the UK in 2010. This prompted me, in my then role as Guest Practice Editor, to look back at the successes and failures of previous consolidations in the accountancy marketplace. My piece was titled: Will a new accountancy consolidator be any more successful? I was unequivocal in my view that were major obstacles to overcome.

I remain of that view. To paraphrase my comments in March:

1 –  Profit forecasts

Where is the financial incentive for anyone to invest funds in an aggregation of accountancy firms whose profits will shrink post consolidation? Remember all partners’ profits shares will become salaries and subject to 13.8% employers’ NICs. This additional cost will dwarf the hoped for cost savings. If profit forecasts and projections are realistic it’s hard to see a real financial incentive for investors who understand the marketplace.

2 – Partners’ earnings

Again the Employers’ NICs are likely to reduce partners’ prospective earnings in the short-term. Will the hope of capital growth (and it can only be hope) be sufficient compensation for the reduction in drawings and profit shares? I doubt there are many younger and middle aged partners who will willingly forsake their current earnings for prospective capital growth.

The only way around this would be for the consolidated practice to retain some form of LLP structure (as Numerica attempted latterly to introduce). Whether external investors would still be interested in such practice remains to be seen.

Julian Hamilton of Jobtel responded to my comments in March and indicated on the AccountingWeb thread that the partners would receive proceeds from the sale of their goodwill to the new entity and could invest such monies to top up their post consolidation earnings; he also noted that top ups would also come, in time, from  dividends paid by the consolidated practice.

3 – International association

Could a new consolidated practice achieve traction without being part of a decent sized international association? Are there any left that do not currently have adequate UK representation? Would a new consolidated practice have sufficient ability to service work referred from overseas or would such expertise need to be recruited – at additional cost?

4 – Management and leadership

This will also be a challenge as has been shown by those who have gone before.

In my AccountingWeb piece I wished Jobtel well (and I still do, though my cynicism remains).

What do you think? Have you ever considered joining a consolidator? What would attract you to the idea?

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Do as you would be done by….

One accountant I know advertises his services using what I think is a pretty good message.

He suggests to recipients of his ad that if they do their own tax return it probably costs them far more than they realise. More in terms of the opportunity cost of their time, the hassle, worry and the prospect of making mistakes.

In other words he’s advocating the reasons to use a professional. And he’s right of course.

On the other hand I noticed the same accountant plans to run his own telemarketing campaign. He may have a good reason for doing this but it seems like a big risk to me.   It seems he’s going to use untrained staff to make calls, using a script/approach that hasn’t been checked by anyone who understands what works and what doesn’t work when it comes to telemarketing.

Perhaps he has had a bad experience with previous attempts using so-called professional telemarketers. Perhaps they did not have the requiste experience, perhaps the offering was wrong, perhaps the follow up was inadequate, perhaps the pre-meeting confirmation with prospects was lacking, perhaps the accountant needs to develop better ‘closing’ skills. There could be all manner of things to tweak or test.

I suspect that the outcome of a DIY approach to telemarketing will probably cost the accountant far more than they realise. More in terms of the opportunity cost of their time, the hassle, worry and the prospect of making mistakes.

Imagine if someone who has had a bad experience with an accountant decided that all accountants were rubbish and decided to attempt to save money and to complete their own tax returns in future…..

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Not all Accountants are business advisers

AccountingWeb recently ran a series of articles about accountants as business advisers. My contribution as Consultant Practice Editor approached the subject from an unusual angle.

There is already plenty of material that seeks to persuade accountants that they need to become better business advisers, and how they could do this.

My article was titled: Do accountants want to be business advisors?

I felt vindicated in my stance both by the comments added by readers and also by the number of times the article was ‘viewed’ – it was consistently running at about 3 times the number of people reading the related piece about ‘How to be a business adviser’.

Here’s an extract:

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Although many accountants describe themselves as ‘accountants and business advisers’, I have a suspicion that general practice accountants typically fall into one of four camps when it comes to the provision of business advice to clients:

  • It’s a no go area: The accountant’s business experience is limited and perhaps they don’t feel that confident with the idea of providing business advice.
  • Personal experience: The accountant is willing and able to share their own experiences of business over the years, perhaps drawn in part from working with other clients.
  • What others say: The accountant offers advice based on what they have read in books, magazines and websites and possibly what they recall from their studies and from attending seminars and conferences. However, their level of interest in developing this area of skill is much lower than their desire to keep up to date with technical knowledge.
  • A systemised approach: The accountant has bought into a programme that assists them in adopting a structured approach to the provision of business advice and either they actively promote the service to their clients or they shy away from doing so and quit the programme.

If I were still in practice I’d like to think that I would probably move up the scale into the fourth category above. Others are happier lower down the scale, and that’s fine as long as their clients are not expecting anything more. Time and again I hear business owners complaining that their accountants fail to provide business and tax advice; they simply do the books, produce tax returns and tell the client how much tax to pay.

Only a relatively small number of accountants seem to be willing to experiment with the systemised approach, however there is plenty of pressure on the others to do this or to beef up their approach and provide business advice, as well as to learn how they can get paid for doing so.

Like this post? You can now obtain my ebook containing loads of valuable insights, short-cuts, tips and advice for accountants who want to STANDOUT and speed up their success. You can buy the book or download a summary for free here>>>

 

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