Is your complacency costing you peace of mind?

Feb 14, 2023 | Sole practitioners, Strategy

Over the years, my conversations with sole practitioner accountants reveal that many are “happy enough” once their practice is generating sufficient income for them. They have reached the stage where they feel comfortable, some might say, complacent.

‘Happy enough’ is hardly an enthusiastic summation of how things are going as it can imply a reluctant acceptance of the status quo.

It often becomes apparent that things could be better but the accountant is used to things as they are. It’s not so bad that it’s worth reviewing what could be different, perhaps because the accountant is concerned that this will highlight issues best left hidden. Or that any change will involve more hassle and fuss than seems worth the effort.

I have encountered this view many times over the years. Among the most common examples are those accountants who no longer make much effort to avoid the January tax return rush. They’ve given in to the difficult and late clients, and accept this means the same as it has done for the last 10-20 years. So what? Other than that annual hassle all seems good thank you.

The other time when this complacency can reveal a problem is when retirement looms; that is, when the accountant realises that no one will pay sufficient for the practice as things stand. In recent times it is becoming the norm for higher prices to be paid only for those firms with well established systems and processes. And yet, it takes more than few months to transition an old-style practice into a new one pre-sale.

Clues there may be an issue here are when the accountant is working long hours, doing too much work they don’t enjoy, hanging onto legacy clients who won’t pay decent fees and feeling under constant pressure to get everything done. As a result there’s no time to review how they run the practice or to take steps to change things. “What will be, will be. I’ll cope, just as I have always done”.

I hear about these frustrations in running a small accountancy practice all the time and it’s not getting any easier. There are a number of new factors that will have an impact in the near future – even though none of them will have an overnight effect:

– new and more aggressive competition;

– recent and prospective changes in the tax regime that will impact the way that accountants work;

– the increasing interest in cloud accounting solutions and the extent to which these will change the accountants’ role;

– the introduction of MTD; and

– other developments and pressures that will change clients’ perceptions and needs.

Most accountants have long heard, and ignored, the predictions of change that will adversely affect their practices. I have long maintained that these predictions forecast a future that will reveal itself over an extended period. There hasn’t been and won’t be an overnight revolution. Many of the forthcoming changes will hit larger firms before the smaller firms are affected. Smaller firms can adapt faster as and will do so only when it becomes necessary to do so. As it did at the start of the first lockdown in 2020.

Having said that, many accountants in smaller firms do want to increase profits, reduce the time and hassle of running their practice and, where appropriate, want to ensure they have succession plans in place and are well set up for their retirement.

Those who choose to work with me often do not have big ambitions to grow their practice but would like life to be better – whether that’s better clients, better fees, more peace of mind, less pressure or less lonely.

How about you? Has your practice plateaued? Do you want to take control, or just let events take their course? One starting point could be joining the Sole Practice Club. Full details here >>> Or if you’d like to have a conversation, without any obligation, just pick a time that suits us both here >>>

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