Accountancy Age has published a profile piece on Peter Hargreaves (Chartered Accountant and founder of Hargreaves Lansdown). In it he is quite scathing about certain elements of the profession. None more so than the smaller 
practitioner:
“They’re not doing a good enough job for clients, hence they can’t charge much for the work. A self-defeating spiral, where pressure on fees is rife from client and competitors.‘The problem is they can’t command the fees to do the job properly. The profession has failed singularly to create the right aura for the charging of fees. They’re different to lawyers, who tend to make good businessmen.”
“The problem is the mindset of accountants. They tend to be ‘mean’ with money, which makes them fear charging. ‘Because there are a few doing it for nearly nothing, the others feel they have to compete, but they’ll give you a bad service. A false economy.”
“Those who want accountants don’t know who’s good, and they try and pay very little.”
“Adding value is the key for practices, instead of just preparing accounts from a ‘bunch of invoices’, because ‘if that’s the service they’re offering they don’t service much for it – and if that’s what the client wants they don’t deserve a good accountant”.
“They should say to clients “we want to be in your offices every three months finding out what’s going on, where you make money, to help financially plan your business. If you make a big profit, should you do something before then, perhaps a marketing promotion and spend it this year while we’re profitable” etc. but of course lots of business don’t even know if they’ve made a profit until the accountants produce the accounts.”
[Edit: This was in 2009!] Do you find that insulting or does any of what Peter says strike a chord? It’s pretty much the same sort of message as is offered (a little more gently perhaps) by organisations such as AVN, 2020 group and Probiz. Please tell me what you think by way of comments on this blog.
That’s good advice if the client’s business is big enough.
I’m a sole practitioner, and my target clients, however, are the micro businesses, the one-man or one-woman bands, who wouldn’t know a cash flow statement if it jumped up and bit them on the nose.
These clients don’t want accountants who charge them large fees, justified or otherwise. They just want an accountant to be a friendly face to help them keep their records accurately in case HM Revenue come snooping, and do their tax returns timely every year.
I target small home-based businesses because mine is a small home-based business, so I’m excellently placed to help them. Large practices should have large clients, and small practices, small clients. I think that works best.
But, that said, all accountants should consider what of their services the clients really do find valuable, and what they don’t.
For example, my clients will get a letter 3 months before their year end about what they can do to save tax (e.g. do marketing / buy an asset now and not in 4 months’ time). That’s valuable stuff.
But I won’t be sending out tax tables, or a budget newsletter. Why would a client want to wade through a generic newsletter like that? I’ll be giving them targeted advice.
I’m aiming to build a “little family” of clients, and have no more than I can comfortably deal with on my own. The day I’m cutting corners and just doing compliance is the day I sell my practice.
M
I can appreciate Peter’s sentiment but I do feel that the profession of late has been trying to step outside it area of expertise. Good efficient compliance is the bedrock from which to provide advice – I’ve seen to many accountants ignore the “boring” aspects of their trade to focus on the more glamorous advisory side, even wandering into marketing and sales. Whilst some accountants may have a good grasp of this aspect it does rather water down your offering into a jack-of-all-trades business advisor. I think accountants need to stick to what they are good at and leave the marketing and other areas of consulting to those respective experts – otherwise you are just giving opinions, not expert advice
10 Reasons why you should use Atkinson Accountancy only 5 there. Where are the rest?
Article is good but nobody needs to accept 100% of it or agree 100% of it.
No confusion that this is a good read.
I perosnally know accountants who have done very good in digital marketing. So grab the chance if you believe you are good enough or leave it for somebody elese who is better than you :D
I agree, I have talked to businesses and described the type of service that we can offer. If they ask me to provide the same service for a lower fee I have to explain why it is not possible.
We sometimes compromise with the client doing more for themselves (we can train them) but they can not have the whole cake for the price of a slice.
Sometimes they join us 2-3 years later having worked with another accountant for a while.