Is all of your focus on recurring work and recurring fees?

Many accountants focus on the recurring work that each client requires and the recurring fees that this will earn the practice. This is understandable upto a point.

The busier the accountant becomes the more there is a tendency to avoid opportunities to give ad-hoc special advice. And if it is provided there is a fear that if a high fee is charged this will scare the client off. And then the recurring fees will be lost.

This is a point I alluded to in an earlier blog post in which I noted a common reluctance among many accountants to seek specialist support when clients require advice that goes beyond the accountant’s day to day experience.

A focus on recurring work and the associated recurring fees is also doomed to change in the near future. There are an increasing number of alternative, low cost and professional alternative service providers. Those clients who perceive that all their accountants do is produce accounts and tax returns will be at risk. At the moment there is just a trickle of a move to online, cloud solutions and DIY compliance. This trickle will increase starting at the lower end but across the board as everyone looks to get more value (for which read ‘advice’) from their accountant.

Do you agree? Let me know what you think.

The above comments follow on from yesterday’s blog post and are taken from my contribution to a report, GRD is killing the profession [edit 2018: now out of print],  recently published by Bob Harper. He says it contains contributions from “leading thinkers, advisers and consultants to the accounting profession.”  (Ron Baker, Bob Harper, Dennis Howlett, Mark Lee, Mark Lloydbottom, Michael McKerlie, Finola McManus, Steve Pipe and Paul Shrimpling)

By |2018-08-22T18:04:52+00:00July 12th, 2011|Accountants, Productivity|

About the Author:

Mark Lee FCA is an accountancy focused futurist, influencer, speaker, mentor, author and debunker.

3 Comments

  1. Tony Austin 20th July 2011 at 2:44 pm - Reply

    As long as firms offer recurring compliance services and specialist advice, there will be a conflict seeking advice from another firm for fear of losing the client. Unfortunately, that often means the client does not get the best advice available. That is why I am concentrating on consultancy services so there is no conflict if asked ot advise the clients of another firm of accountants.

  2. David Lewis 18th September 2013 at 8:48 am - Reply

    I think the main reason for accountants not using a specialist is fear of jeopardising the relationship and losing the client. Especially as the clients that need specialist services may well be the accountant’s larger or more complex clients.

    I work on a consultancy basis (mainly investigative work & process/information improvement) and don’t have any tax return/ annual accounts clients. Often accountants that focus on recurring compliance services don’t quite “get” the consultant concept:
    – many of us (myself included) have no desire to do compliance work!
    – biting the hand that feeds you (by pinching a client) would be a sure fire way to trash a reputation built up over many years

    I also believe that some accountants are happy to cultivate a client dependency so that the client feels that the accountant is the fountain of all financial knowledge – bringing in a specialist would put a lie to this.

    Interestingly while I do get referrals from accountants, they do not come from practices that have a compliance focus.

    Over time more successful clients outgrow their compliance focused accountants. While using specialists can keep the client in the fold for longer and may even prevent some failing, I can’t help thinking that for some accountants parochialism will continue to rule.

  3. Margaret Thornton 19th November 2013 at 9:38 am - Reply

    There will be more change in the next five years as the compliance market shrinks, disappears to the cloud and IT becomes ever more sophisticated. I think accountancy practices have to decide what model to adopt. Only the accountancy practices which either deliver very low cost efficient compliance to many or which deliver quality advice to a few clients will thrive. Actually clients don’t mind their accountant buying that advice. In the same way a GP refers you to a specialist. What they will mind is you not giving it at all or giving wrong advice because it is beyond your area of expertise.

    Yes, fees for consultants are expensive but you are not buying an hour or two of someone’s time. You are buying 20 – 30 years specialist experience which is updated constantly. Not paying for specialist advice could be the most expensive decision a client makes.

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