How accountants can take control of their career success

Duncan Brodie is a former Finance Director who helps accountants build successful careers. I’ve known him a while and feel his views are worth sharing here.

Duncan’s views will be especially helpful to you if you are nearly or recently qualified.  As he explains:

Once upon a time a professional accounting qualification almost guaranteed that you would progress pretty far in your career. These days this is no longer the case. There are many who get qualified but fail to achieve the success that they had hoped for.

If you want to achieve success in your accounting career you have to take control. So what should you do to take control of your accounting career?

Determine what you want from your career.

This might seem like a statement of the obvious. Yet in truth most just drift along. People usually only give this any significant thought when something significant happens like being made redundant.

This was true in my day too. I originally studied accountancy simply as a way to get a business focused qualification whilst deferring the decision as to what I would do career wise. When I qualified I was no closer to knowing what I wanted. I moved into tax – as that was the only exam I passed first time. And I had realised that clients would gladly pay good money for good advice on how to reduce their tax bills. (The top rate of tax back then was 98%!)

I stayed in tax for another 25 years before concluding that I enjoyed the non-tax aspects of my career more than the tax focused ones!

Duncan continues:

It’s also worth remembering that what matters will be different at different stages in your career. Money and earning more is definitely a consideration when starting out.

As you progress other factors like enjoying your work, gaining the right experience and being challenged matter more.

He advises that you:

Plot out your key moves. There are certain important points in your career and the decisions you make can help or hinder.

The first key move is when you qualify. It can be tempting to jump ship too quickly.

The decision you take at this point can have a huge bearing long term.

I’ve already mentioned that I moved into Tax when I qualified. Duncan’s first job after qualifying was as a Head of Internal Audit.  Why?

I knew that I would get the chance to set up a new function from scratch and also get exposure to Board level working.

If you don’t know what you want to do long-term (and why should you?) make a conscious choice about to do first. You can review your choice down the line. At worst you will have discovered one of the things you do NOT want to do long-term!

Duncan also advises that you take responsibility for your professional development:

In the early stages of my career there was little or nothing available to me in terms of professional development.

That all changed when I went to work for a bank. Areas for improvement to make you more effective were openly discussed and then courses found to build capability.

When I worked in the Big 4 this was even more evident.

Despite it never being easier to access professional development opportunities, it’s surprising how few take personal responsibility for it.

That is really good advice. When you ask for permission to attend specific courses, make sure you can identify for your bosses why you will be more of more value to them after you have been trained in these new skills or enhanced your abilities.

Duncan also suggests that you actively seek out new challenges and responsibilities

You can very easily just plod along doing what you can do extremely well. The problem is that if you are not challenging yourself you are probably not growing.

I found that getting involved in business projects was a great way of building knowledge, skills and attributes.

And adopt a long term outlook.  Yes some make it to a senior level quickly. For the vast majority it is a much slower progression. I encourage people to take a long term view of their career. In my experience a career is more like a marathon and less like a sprint.

Don’t expect it to be plain sailing. There will be:

  • Setbacks
  • Disappointments
  • Rejections
  • Judgements
  • People who don’t rate you

The important thing is to stay positive and believe in yourself, even when the going gets tough.

Many thanks to Duncan Brodie for sharing his careers focused advice for accountants. You can access his free guide The 7 Biggest Barriers To A Successful Career In Accounting here >>>

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10 tips to help sole practitioners reduce debtor days and lock up

When I was first in practice the normal practice for accountants was to issue invoices after doing the work and then to provide clients with a further 30 days (or more) credit. I now encourage my sole practitioner clients to move away from this historic approach.

One sole practitioner accountant recently told me that, over the past 6 months he had reduced his debtor days down from  over 90 days to less than 30 days. This had allowed him to withdraw around £10,000 more from the practice – and with no change to his tax bill. It was ‘free’ money. Already earned and taxed but previously tied up in the business as debtors.

I appreciate that you may have some longstanding clients who are now akin to friends. And you may find it tough to push them to pay you faster than they have ever done. But, that is no excuse for running your practice like a charity, ignoring best practice and revealing your own poor business sense to clients.

1.   Many studies have revealed that an increasing number of accountants have moved their clients to monthly standing orders or direct debits. This helps with fee quotes for new clients too. A fee of £40 per month sounds much more affordable than £480 a year.  For lower fees, even quarterly bills are better than single annual bills and make better business sense in most cases.

It’s not just a question of improved cashflow – though this is a key benefit of regular income. It also reduces the risk of you remaining unpaid after you have completed the work. And it reduces the time you have to spend reviewing and chasing debtors. All told it leaves you with more time to do productive (billable) work.

2.   Make it was easy as possible for clients to pay you. Credit cards, paypal and GoCardless all make it easy and although each facility levies a small charge this is invariably better than having to wait and chase for payment at a later date.

3.   When you issue invoices for ad-hoc and advisory work that is not part of the regular billing cycle, when is payment due? Why not ‘on presentation’? Why automatically give 30 days or even 14 days credit? As a sole practitioner accountant you should keep in mind that your credibility is at least, in part, a function of how well you are seen to run your business. If clients know that they can simply take extended credit from you, this WILL damage your credibility (as well as your bank balance and the profits of your practice).

As you probably know, your ‘Lock-up’, is the aggregate of your debtors and work in progress. It’s the total amount you have ‘locked-up’ in your clients at any one time. By way of contrast if you bill all work in advance you would have no ‘lock-up’ at all.

For years established professional firms often seemed to struggle to get their ‘lock-up’ down to less than 100 days. For many it was even longer than that. Now the trend is downwards in all better run practices.

Techniques for keeping ‘lock-up’ down and reducing debtor days can be used at every stage of the billing process – thus

4.   When quoting for work – Consider seeking payments in advance, especially from new clients you don’t know from Adam;

5.   When the timescale for the work is extended but you’ve started the work – assuming it’s not your fault that completion has been deferred;

6.   When you discuss the proposed fee with your client – thus avoiding unpleasant surprises and reducing the prospect of subsequent challenges and delays;

7.   By enforcing your standard payment terms – perhaps allowing an independent credit controller to chase up for late payments (see below);

8.   By stopping ongoing work if the previous fee has yet to be paid – to continue working in such cases just increases your lock-up and the likelihood of write-offs down the line.

9.   Here’s one simple idea you can use when presenting an invoice to a client at a meeting.  As you do so ask, in the same breath, When can I expect to receive your payment or bank transfer? Some clients will respond by asking if 30 days is ok? Others will have their cheque books with them and write one out straight away. Or offer to pay via their smartphone. Others will say ‘within the week’.

10.   To everyone who promises to pay you after the meeting ask “Can I hold you to that?”

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New hologram support service for accountants

Press Release

Renowned accountants’ mentor and commentator, Mark Lee, has teamed up with a Tokyo University for what he is calling an outsourcing knowledge experiment.

This new service is quite distinct from Microsoft’s recently announced holoportation which uses different technology. Using a simpler Japanese originated smartphone app, accountants will be able to have a hologram of Mark projected into their office to provide outsourced practice support, knowledge and advice.Hologram of Mark Lee

Mark is delighted to be able to offer accountants a facility to interact with him akin to that of the holographic doctor in the TV series ‘Star Trek Voyager’.

“Obviously this new facility isn’t comparable with what may be available in the 24th century but it’s still way beyond what we might have imagined just a few years ago. It seems like Magic but it’s science” says Mark who is Treasurer of The Magic Circle and includes a touch of magic in his keynote talks.

The technology in question was developed in 2010 by the University of Tokyo’s Department of Complexity Science and Engineering (DCSE). Mark is the first person in the UK to be licensed to test the technology for commercial purposes. He became involved through a friend, Pria Lolof, who works at the DCSE.

“We’ve been planning this for some time and are concerned that Microsoft’s recent announcement about their holoportation is a spoiling tactic. The timing is very coincidental” says Mark who has been providing support to smaller practitioners for many years and has been looking for a way to fill a gap in his service offerings.

“I provide loads of free stuff on my website and a low cost online course to help accountants build a more Successful Practice. Beyond that I have a face to face group called The Inner Circle which meets in London and a premium 1-2-1 mentoring facility too.

I’ll be launching a new online programme shortly to provide support to a wider range of accountants around the UK. This hologram facility may become the technology we use to deliver the programme. If it turns out to be impracticable I’ll go back to the original plan of online meetings.”

The hologram service is only being promoted today because of the nature of the Japanese Outsourcing Knowledge Experiment. Thereafter accountants will be invited to attend a webinar being prepared especially for sole practitioner accountants who want to make a breakthrough in the development of their practice. Please email Mark if you would like to be advised when the webinar is being run.

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How do you decide which bookkeeping software to trust?

It’s not often that you see a huge supplier to your business sector subliminally promoting you. Maybe that’s stretching the facts but I was amused to see a recent post on the Sage One blog titled: TrustMark.

TrustMark is a Government backed quality scheme that is intended to signpost people to reputable local firms and expert tradespeople working to Government-endorsed standards.

Why am I referencing TurstMark here? Partly because I found the post on the SageOne blog, partly because it sounds like an encouragement to recognise my integrity but primarily because of an analogy that I hope you’ll find useful.

It seems that TrustMark was launched 10 years ago, which means I should have come across it previously. I’d have thought I would remember, but it seems not. I would imagine that there was a bit of a fuss about it when it was launched. Since then it has been partly superseded by better known and better funded alternatives eg: Checkatrade, TrustedTraders and TrustaTrader – even though they are all quite different.

Something similar has happened in the world of bookkeeping and accounting software. I read recently that Sage has reached 100,000 Sage One subscriptions in the UK. Few of the alternative suppliers have the same pedigree and yet we often hear more about them than we do about Sage. Why is that I wonder?

I’m not a tech blogger as you know. My focus is on helping individual accountants (and other professionals) to STAND OUT from their competitors, from their peers and from the crowd. The accounting and bookkeeping software houses have to do this too. I imagine they all seem pretty interchangeable at first glance. But I understand that there are some quite significant differences in terms of functionality, price, support, ease of use (for you and for clients) and all sorts of other factors.

If you have yet to choose a preferred solution you need to be careful to avoid simply following the herd. What suits other small practitioners may not be ideal for you and your client base.

Indeed there are plenty of accountants who are, effectively, software agnostics. They are happy to use different software for different clients. If this approach resonates, what will be your policy when you learn that a prospective new client uses a bookkeeping package that is new to your practice? Is there a limit as to how many different packages you will allow your clients to use?

Now that you have the facility to run these programmes in the cloud one key reason for limiting the number of different packages has gone. Cloud based software doesn’t require you to install regular or even annual updates. In theory therefore there is no need to limit the number of different packages that clients use. That is unless you have learned from experience or from other accountants of limitations and irritants that you wish to avoid.

But I am now in danger of over stretching my ability to comment on these systems. I like to limit myself to those topics about which I can speak with some authority – whether on my blog, in workshops or on conference stages.

Three years ago I spoke at the Sage Accountants Roadshow on the #FutureOfAccounting. The focus of my presentation was how accountants can use social media. As ever, I debunked some of the hype (much of which exists to this day). I love doing this and my enthusiasm for doing so probably comes across even stronger now than it did in 2013.

I used an analogy back then comparing social media to a car. I suggested that some accountants who start using social media are like people who get into car and try to drive without first understanding anything about the clutch and the gearstick. It wouldn’t be a very comfortable journey and might well put one off driving. Many accountants who try out social media are in much the same position. They don’t find it useful or helpful, principally because they have bought into the hype but don’t really understand what they are doing.

Does the same sort of thing happen with some cloud based bookkeeping and accounting packages? As we move into 2016 I suspect that we will hear more about which suppliers we can really trust. What do you think?

This blog post was kindly sponsored by SageOne.

 

 

 

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STAND OUT Christmas greetings

I tried to do something different this year. Like many others I stopped sending cards to everyone a while back. 
 
These days cards sent with a personal message can STAND OUT positively as they are now much less common than once was the case.
Some cards and messages specifically STAND OUT. I remember one card I received a couple of years ago from the presenter of a course I had attended 3 months earlier. It was a bespoke card with a handwritten message. I kept it for months. I assume he’d sent them to all attendees. It must have been a labour of love, but it paid off.
Maybe it’s me, but with the odd exception, I don’t remember who did or didn’t send me a card or a message last year. I recall I received loads of ecards – some with attached videos as is happening again this year. 
 
The only ones that really STAND OUT for me are the bespoke ones – like those produced for five years running now by the accountancy firm Cassons.
Other popular variations are the standard good wishes email, a newsletter review of the year or a card with printed signatures. 
There’s a lot to be said for sending genuinely personalised messages to special clients and connections. Physical gifts often STAND OUT too. I recall receiving a book last year that a business contact had chosen from my online amazon wish list – it was a complete surprise and very thoughtful. 
But what about your wider network? Only you can say what will have the most powerful impact or, indeed, if cards and messages etc are appropriate across the board at Christmas time in our multi-cultural and multi-faith society.
I’m always touched by the cards and messages I receive at this time of year – but mostly only where I sense some genuine thoughtfulness that shows I am considered to be more than simply a name on a database. 
The key question, as ever, is why do you send Christmas cards and messages to business connections? Are you doing it because you always have? Because you like to give (and to receive)? Do you consider it the ‘right’ thing to do? What would people think if you don’t do anything? (I suspect that many will not even notice!) It’s a way to keep in touch? (Really? as one of hundreds of people doing much the same thing at the same time of year?)
Does your chosen approach help you achieve your objectives?
I have tried something different this year. I sent a series of 3 festive greetings related emails to my wider (15,000+) network. I first divided the list into 5 groups and tailored the messages for each group. 
The first email apologised for an email mess-up I made recently and also contained a greeting plus a daft disclaimer. I’ve copied this below for posterity.
The second email contained greetings and gifts. These were free downloads that I genuinely hope will be of value. I tailored the gifts for each of the 5 groups of recipients.
The third email encouraged recipients to identify 3 or 4 key achievements of which they are proud in 2015. And then to set 3 or 4 key objectives for the coming year. I shared my own too. Again, I have copied this email below as you may find it helpful too.
Email 1 – Greetings and giggles for you
Let me start with an apology for the recent emails I sent asking if you wanted to remain on my list. Then I have something I hope you’ll enjoy. 
 
The recent emails were intended for people I was emailing but who didn’t seem to be interested. Sadly I set things up wrong which meant that the emails also went to people like you whom I hadn’t emailed for a while. I’m really sorry. 
Now I’m serious about wanting to send personal greetings to you and all of the other people I know. It would take a heck of a long time to do that as, in addition to you, I’m in touch with thousands of others too.
I don’t know the answer but that’s why this email contains more than simple best wishes for the holidays and New Year. And it’s also why you’ll receive two further greetings from me over the next few days. 
 
For now I send my best wishes for a wonderful Christmas and a healthy, happy, prosperous and non-too taxing New Year.
To cover all bases I should add the following disclaimer:
These festive wishes are sent with no obligation, implied or implicit and carry no guarantee as to the outcome for an environmentally conscious, socially responsible, low stress, non-addictive, gender neutral celebration of the winter solstice holiday, practiced within the most enjoyable traditions of the religious persuasion of your choice, or secular practices of your choice, with respect for the religious/secular persuasions and/or traditions of others, or your choice not to practice religious or secular traditions at all…
…and a fiscally successful, personally fulfilling, and medically uncomplicated recognition of the onset of the generally accepted calendar year 2016, but not without due respect for the calendars of choice of other cultures whose contributions to society have helped make Britain great, (not to imply that Britain is necessarily greater than any other country) and without regard to your race, creed, colour, age, height, weight, physical ability, religious faith, sexual preferences, choice of computer platform or internet browser. 

By accepting this greeting, you are accepting these terms. This greeting is subject to clarification or withdrawal. It is freely transferable with no alteration to the original greeting. It implies no promise by me to actually implement any of the wishes for you or others, and is void where prohibited by law, and is revocable at my sole discretion.
These wishes are warranted to perform as can reasonably be expected within the usual application of good tidings for a period of one year, or until the issuance of a subsequent holiday greeting, whichever comes first, and this warranty is limited to replacement of this wish or issuance of a new wish whenever I feel like it. 
 
Email 2 – Greetings and gifts. See below
 

Email 3 –  Review and forward planning for 2016 

Last week I sent you my formal festive greetings and then some links to special gifts that I hope you’ll find useful. 
 
In this third and final installment of festive greetings I invite you to identify your top 3 achievements in 2015 and the 3 things you would most like to get done in 2016. This should help you finish the year on a high and excited for what is to follow. I’ve also shared my own answers to the same two questions.
 
Doing this yourself also means you’ll be more inclined to talk positively about things when you are chatting with family and friends over the next couple of weeks. Not that you’ll be focused on work then of course. But just in case it comes up. Or maybe your achievements and ambitions are not work related anyway.
 
It’s all too easy to dwell on stuff that’s not gone as we would have liked. Some people find doing this helps motivate them to do better next year. It doesn’t work for me though.
 
I always encourage those with whom I work to adopt a more positive mindset. But to remain realistic of course.
 
So, two questions for you:
 
1 – What are the 3 or 4 things you have achieved this year of which you are most proud? 
 
2 – What are the 3 or 4 things you are seriously keen to achieve in 2016?
 
Answering the first question is likely to get you in the right frame of mind to answer the second question.
 
If you want to talk about how I might be able to help you achieve those 2016 objectives do get in touch.
 
For now, I repeat my previous wishes for a fabulous xmas and a wonderful new year.
 
Regards
Mark
 
ps: If you’re interested my answers to the questions are:
 
2015 – Most proud:
1 – After keynoting at the ICPA 2015 annual conference for the first time I was rebooked to speak at next year’s ICPA annual conference;
2 – Launched the Successful Practice Pack weekly online support for accountants in practice;
3 – Being ranked as one of the top 3 online influencers in the accountancy profession for the 2nd year running;
4 – Hitting two milestones re my practice focused column on AccountingWeb: Over 200 published articles and well over one million views.
 
2016: Objectives:
To be even more careful with the settings on my emails to avoid you getting too many, too often and/or those that are simply not appropriate for you!
 
Beyond that:
1 – Fill my mentoring programme for 1-2-1 support of ambitious professionals and executives;
2 – Secure the remaining bookings I need to hit the target (agreed with my mastermind group) for full fee paid speaking engagements where I can entertain, enlighten and inspire audiences of professional advisers;
3 – Increase the number of accountant subscribers to my Successful Practice Pack to 500. If you’d be willing to pass on details to your accountant or to an accountant you know – please let me know.
4 – Secure at least 5 consultancy, workshop and speaking gigs to help businesses focused on securing business or referrals from accountants.
 
THANK YOU!
If you’ve read down to the end of this blog post I hope you feel it was worthwhile. Should you feel inspired to send me a personal message re anything in this blog post I promise that I will read it and respond personally. This is what I’ve done with all of the kind messages received in response to the emails summarised above. If you’re interested I’ll also send you the links for the free downloads that were included in email 2 😉
 
In the meantime I hope you have a wonderful Christmas and a healthy, happy, prosperous and non-too taxing New Year.


 

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5 tips from Stephen Lansdown’s entry on The Accountancy Rich List 2015

I was intrigued by elements of the Accountancy Rich List 2015 published by economia magazine.

The magazine itself, as distinct from the online list, contains pen portraits of ten of those on the list, described as “inspiring entrepreneurial chartered accountants”. In each case a sentence or quote has been given explaining ‘How he made it”. One of the quotes stood out as offering important lessons that are more widely applicable.

Stephen Lansdown – ranked 5th on the Accountancy Rich list 2015 – is one of the founders of Hargreaves Lansdown which began life in 1981. It has since grown into one of the UK’s best-known financial services firms.

In the box summarising ‘How he made it’ Stephen is quoted as saying: “It was a combination of marketing our business, getting clients or potential clients on board and then convincing them to do business with us.”  Having been on the receiving end of Hargreaves Lansdown’s marketing for some years I am inclined to extrapolate some specific tips from this quote:

  1. Marketing is key. People need to be aware of your business before they can buy from you.
  2. Prospects need to know exactly what you can do for them and how they can benefit from using your services.
  3. You need to make it easy for prospects to decide they want to do this.
  4. You need to keep in touch with clients so that they keep coming back and doing more business with you.
  5. You need to follow up. Getting in touch once and hoping someone will remember you when they need your services is rarely sufficient. Following-up effectively is key and this is why it is one of the 7 key elements in my STAND OUT framework.

 

 

 

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How I manage my time on social media each week

How long do you need to spend on social media to build up a decent following, contribute effectively and secure a good level of engagement?

I’m not sure much has changed over the years since I started to use social media in 2006. The answers to those questions depend on your reasons for getting involved and using each of the social media platforms.

Sure, there are some agencies and individuals to whom you can outsource much or all of your social media activity. This MAY make sense for well-known brands but in the main I doubt it’s worthwhile for many professionals.

I am often asked how I manage to spend so much time on social media and whether it’s worthwhile. It’s all a matter of perception and probably takes less of my time than you might think. I am very selective as to which platforms I use and where I engage with people online. My approach works for me. I am realistic as regards what I can achieve on each platform. Social media is not a place to promote and sell your services. It’s simply a new starting point for building relationships that will grow only through direct contact, whether by phone, skype or face to face meetings.

What follows is the fourth summary of my approach that I have posted here. The first was in 2010, the second was in April 2012 and the third was in March 2014.

It is clear to me that the time I spend on social networking sites continues to reduce over time. And the time I do spend online is more focused than ever before. Despite my enthusiasm for social media I still consider it to be over hyped as a marketing tool and widely misunderstood as a communication tool.

As ever the time I spend online each week depends on what’s happening, my work priorities and the meetings I attend. I often find that I am more active online when I am out and about as I tend to check my phone for updates while waiting for people and while commuting.

So how much time do I allocate to social media?

Business online networks

LinkedIn

I believe Linkedin is quite distinct from the social media sites identified below.

Because it is a business online network I spend more time here than on any other such platform. I use it for lead generation across all areas of my business activities. I use Linkedin to look up almost everyone I am due to meet, have met or who contacts me by email or phone. I ask to connect with people and accept connection requests from most people who approach me – once I know why they have done so.

I am not convinced there is enormous value in posting long form blog posts/articles on Linkedin. My efforts in this regard have not proved worthwhile to date. I do however check out the activity on my home page, contribute to relevant discussions in key groups, administer requests to join my groups and monitor all new connection requests and messages most days.

Total time: Around 2 hours a week.

Social Media

Facebook

I have started to use this more than before, largely because I have got to know so many members of the Professional Speaking Association. There is a popular facebook group to which many members contribute. Doing so is a way of helping each other and keeping one’s profile high.

Beyond this most of my use of facebook is related to keeping in touch with old friends I haven’t seen for a while. I still see the site as being largely for fun, family and friends rather than for business generation.

Total time: 15 mins a day plus snatched moments while out and about.

Google+

It’s never grabbed me and recent developments vindicate my longstanding advice to ignore it.

Pinterest and Instagram

I spend no time on either platform. I doubt any of my business prospects are active here or would be likely to engage with me here.

YouTube channel

BookMarkLee – takes no time in a typical week (No change). I am planning to post more videos on line over the coming year. It is more time consuming than I would like but I note that YouTube is an important channel for professional speakers.

Micro-blogging

Twitter

I am now even more focused than I was previously. I still rely on a plugin to my main blog to post a random item every few hours. As there are over 600 posts to choose from this means no repeats for over a month. It also means that I appear active even when I am otherwise engaged. I supplement these posts with links to current blog posts and replies to and RTs of other tweets and links I think will be of interest to my followers (who number well over 6,000 – and more than 10 times the number of people I follow).

Total time: 15 mins a day plus snatched moments while out and about.

Accountancy website

AccountingWeb

As consultant practice editor I write weekly articles and I always seek to engage with those who comment on these. I also check out and comment on other articles and contribute to ‘Any Answers’ every couple of days. Total time (excl paid-for writing): Upto an hour a week

Blogging

WordPress – The STAND OUT blog and my Blog for ambitious accountants

These are the regular blogs I update every week or so – you’re reading one of them now.  Total time: Probably an hour per week to post one or two items and to review and reply to comments.

Blogger – The lighter side of accountancy and tax

My fun blog. I cut and paste ad-hoc items here. I seem to have reduced the time I spend adding posts here. Total time: No more than 10 minutes a week.

Conclusion

It all adds up and of course my online activities are quite well honed now. I’ve been experimenting with many of the above since 2006.

How about you?

Like this post? You can now access the ebook I wrote specifically for accountants who want to get more value from the time they spend on Social Media. Click here for full details>>>

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Will this merger of two more mid-tier firms do the trick?

I was saddened but unsurprised by the news that Moore Stephens and Chantrey Vellacott are to merge with effect from 1 May 2015.

I originally trained at a predecessor firm of Chantry Vellacott and the current managing partner, Mike Tovey, was my manager when I qualified as a chartered accountant in 1982.

The name of the firm I was with, Wood & Co, disappeared long ago so it’s not the disappearance of the Chantrey Vellacott name that saddens me.

The press release announcing the merger contains the standard factual outcomes and the ubiquitous aspirations that accompany all such ‘mergeovers’:

  • The firms will merge and continue to use the larger firm’s name, brand and international association.
  • This will reinforce their position as one of the UK’s biggest mid-tier firms.
  • “The merger provides a platform for continued, sustainable growth. There are real synergies, not just in terms of the services and sectors but a coming together of similar philosophies and values to form a strong combined firm.”
  • “This provides an important strategic development for both firms. The combined firm will provide our clients with a broader range of expertise, along with an increased depth of sector knowledge and experience.”
  • “Clients will also benefit from access to much wider UK and global capabilities through the [larger firm’s] UK and international network.”

Much the same thing is said every time two mid-tier accountancy (“rival”) firms merge. The drivers for these mergers are typically the ongoing struggle for multi-disciplinary mid-tier firms to generate sufficient profits and to STAND OUT from all of their competitors.

The simple fact is that the downwards pressure on fees and the overheads involved in running mid-sized firms are a constant battle.  And this battle has challengers on both sides.

First there are the larger firms which are perceived to have more credibility and clout. They typically have more than one or two suitably experienced experts in any discipline you might name.  Everyone recognises the name of the firm and many top graduates aspire to work for one of them in the first instance. The larger firms invest time and money in networking and marketing their services and key people to target clients – many of which are currently serviced by mid-tier firms.

Secondly there are the smaller firms which are perceived to offer similar quality services, more regular direct access to partners, greater flexibility and, typically, lower fee levels.

The struggle for the mid-tier firms that want to survive and thrive is threefold. They need to:

  1. Convince larger clients that they do not need the services of a larger firm. This often necessitates having more than one or two credible client friendly in-house experts for each of all necessary specialisms. And those key clients need to know who they are. When a large client moves on to a larger firm, examine the real reasons and avoid the internal blame game. What can be done to avoid a recurrence? Maybe a merger is the only (short-term) solution to sustain the practice. I wonder though whether this is ever enough to retain those larger clients who are tempted to move to a larger firm?
  2. Improve their market focus so as to secure increasing numbers of new and profitable clients.  Without this clarity fewer and fewer businesses will see any good reason to move their affairs to a larger version of the smaller firm they were with previously.  I would add that this approach requires a move away from the traditional game of rewarding partners and staff for picking up new fees, regardless of size and unaware of the, typically, disproportionate cost of acquisition of clients where the fees are relatively low.
  3. Clarify a clear, credible and consistent focus on specific market niches rather than trying to be all things to all people. That old-school approach rarely has any credibility any more, in any size firm. If pursued it will invariably result in the firm sliding into a merger that benefits only the most senior partners. Few growing businesses will be attracted to yet another ‘fits all sizes’ accountancy firm that doesn’t evidence the necessary expertise in relevant specialisms.

I’m generalising of course. But the writing has been on the wall for years. Before I joined BDO in 1997 I was a partner at, what is now, Crowe Clark Whitehill (CCW). Even back then this mid-tier firm was recognising the value of adopting a clear focus on 3 distinct specialisms. I don’t know for sure but I would expect that it is this approach that has helped sustain CCW over the last 18 years.

The firm has long evidenced a consistent focus and expertise in advising Professional Practices, Not For Profits and Pension Funds. I’m sure that this approach is also a major contributor to their ability to recruit good partners and teams and to consolidate their position in the top 20. I am sad, but unsurprised when yet another mid-tier firm of accountants is merged out of existence.

For many years I advised on mergers of professional service firms. I can still recall one of my favourite mantras that “the merger of two weak and unprofitable firms rarely creates a strong profitable firm”.

What saddens me is that the merger of Moore Stephens and Chantrey Vellacott is a reminder of the large number of accountancy firms that are perceived as being ‘just another’ mid-size firm. Just another large firm of accountants who are all perceived to do much the same things, in much the same way for similar types of clients.

Of course they struggle to win as many new profitable clients as they would like to do.  And of course they lose some of their better partners and staff to more profitable firms. It’s hard for larger firms to get the buy-in and commitment from enough partners to change engrained habits. This requires strong leadership, informed external stimuli and a willingness to invest sufficient time and money to make the necessary changes. The fewer partners who need to be convinced this will secure the longevity of the firm, the easier it is to take the necessary steps.

All sizes of firms of accountants would benefit from adopting simple names and brands that are distinct and memorable. They also need to clarify their business focus and evidence how specific groups of clients benefit most from engaging their services. This is not easy.

To most people, most accountants are much the same.  And it’s rarely credible or  sufficient to claim that “it’s our people that make us different”.

That claim only has credibility if all those people have grown up in the firm and not worked elsewhere. If there are many recent recruits everyone needs to be able to confidently and honestly talk about the differences they have noted since moving to their new firm. And for those new recruits to be able to assert that ‘Yes that this firm’s style and approach really is different. Everyone’s focus is genuinely on helping clients and there is less of the internal politics and internally focused targets that most other firm obsess about. Clients benefit because we know that without our clients we’d have no business.” And so on.

Of course, the more firms whose people make such claims the more they all sound the same again. This is part of the reason why I am a great believer in the importance of individual partners and staff being able to STAND OUT from their competitors. Of course it helps if the firm has a strong brand and clear business message. But ‘Business branding and messaging’  is only one of the 7 fundamental principles that you can use to STAND OUT from the pack.

I wish everyone in the newly merged firm, Moore Stephens, all the best. And I hope that the merger creates a sustainable, profitable and respected firm that is a professional and fun place to work.

In the mean time I’ll await news of the next mergover in the accountancy sector. I doubt I’ll have to wait long.

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