Steven Mugglestone

The more I learn, the less I know

Empathy and Experience are perhaps the greatest attributes when choosing a business adviser and accountant:

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The debate continues to go on, what key areas should a business owner look for when choosing an accountant or business adviser and the internet is full of pick me, pick me statements.  Big firm, small firm, qualifications, what the bank/bloke down the pub/internet chat rooms/spouse says or maybe they are just really good guys or girls, or so you think.  At the end of the day, it depends on whether the business owner wants a key and trusted adviser or whether they are happy with a number cruncher spread-sheet bean counter who does not answer back or tells you what you want to hear but will not truly help you grow your business and build and protect your wealth.  If that is the case do not read any further.

Qualifications

It seems basic, and slightly unbelievable, but there still appears to be a debate on whether qualifications are necessary.  We understand that this can be down to cost, fine, if you believe that, the next time you are ill, ask for advice from the bloke in the pub to sort out your heart condition, it is really easy, there is plenty of stuff on the internet to talk you through open heart surgery. There are reasons, however, for qualifications and there are reasons for professional bodies.  The areas of accounts, audit, taxation and business advice are complicated and specialised.  The ICAEW (Chartered Accountants Institute) was granted a royal charter in 1880 by Queen Victoria, in recognition of the importance that the body of accountants were playing in the business world and society. Ignore the history and the grandeur, if you wish, but there are reasons for royal charters and there are reasons for exam standards to be set to be part of such professional organisations.  Many fail such exams, not because of the volume of facts or having no understanding of double entry bookkeeping, but because the final exams ask the candidates to think, analyse and debate key issues and advice (the sort of thing that is relevant to real life and business) and it is these areas that some find too challenging.

A key point about qualifications is that there is a lot of information to understand that underpins accountancy and business, tax legislation, business and corporate law, accounting standards for the UK and across the world and professional advisers need to be able to understand and assess the impact these have on their clients.  The list goes on, but the real key issue is that this is the basic starting point, the foundations of education and knowledge in these key areas.  Another key skill is the ability to consider a large amount of information and understand and explain how that will affect a business.  To try and say it is only exams, a person can just be poor at exams, is fine, but really, would you trust a an unqualified doctor who could not pass exams to carry out your triple heart bypass.

The sole practitioner

Cheap, yes, but what happens when they are away and how on earth can one person provide a range of services and support.  The simple answer is they cannot.  Advice, support, business systems and delivery are built and improved by teams of people across all industries.  Accounting and business advice is the same.  A team, if organised and lead appropriately, will achieve far more together and provide a better service for a portfolio of clients than any sole practitioner.

Small firms

What do you get if you carry on doing the same thing in the same way?   Everyone should know the answer to this as it is you get what you have already got.  This is the key challenge and continuing weakness of many small firms.  They struggle to deal with changes in the modern business world as they do not know any different.  Yes they have good and strong relationships with clients, but sometime lack the breadth of service and experience to provide a comprehensive service, losing out eventually to much bigger firms.  They can provide accounting support as they have done over the last 20 years.  The progression of their own staff is stilted as the next generation of directors and partners are only learning from the older partners with the same attitudes, skills and experiences.

Many small firms do not adequately tackle the services, systems, staff development and general business modernisation and progression that many other businesses do as a matter of course and their futures are suffering, not to mention the service and support to their clients.

The Franchises

Expansion from some firms and sole practitioners has come through franchise models.  This is fair enough, but the reality is that whilst franchises provide an easy ready-made route into business, is that really the type of resource another business needs to provide key business support and advice.  A business “professional” who could not build or create a business themselves and relies on a ready-made support model is putting themselves forward as a business adviser?

Big firms

Systems, processes, standard documentation and support and a wide variety of support and services are there for all to see and these are generally all good.  Big firms, however, are like large public bodies and similar organisations.  Most of the staff do not lead the organisation and have no real input in developing a business.  They are performing the tasks given to them.  Many former big firm professionals recognise how institutionalised they were when part of these firms.  Most directors/partners in such firms also have lost many skills, if they had them in the first place, that most FDs would see as key skills to actually running a business, planning, forecasting, analysing and delivering change.  The very skills that would help most of their clients are not apparent, with the individuals claiming that they provide the best support ever.  The reality is that they bask in the brand image of the business, but lack the key and core business skills themselves to be in business.

It has also been very clear of some of the major mistakes that big firms have been hit with, or have created themselves over the last few years;

  • Poor audit decisions and major law suits;
  • Poor acquisitions resulting in major losses and redundancies;
  • Growth underpinned by selling now disastrous tax products;
  • Poor tax products and planning and closure of those areas, leaving their clients in limbo;
  • “Tampering” with their own accounts to try and show a far better picture;
  • High fees for basic compliance work;
  • Clients leaving to find as good, if not better service at a far lower cost;
  • The realisation of many businesses that having a “name” on their accounts does not provide them with better advice or growth opportunities.

The strong modern independent

We cannot say that we have all of the answers.  We can say, however that we, together with other independent firms around the UK, are building a modern business by mixing the key skills and experience of their partners, bringing together senior people from large and smaller business with others that have actually been part of a commercial organisation facing change, growth, turmoil and sometimes significant turnaround.

Take those skills and experiences and add some significant elements of entrepreneurship and you can seek to address, build and improve the offering and challenges of a modern independent firm of chartered accountants.

  • Branding;
  • Fully understood and embraced client care standards and procedures;
  • Modern social media contact;
  • Improved, documented and understood systems and processes;
  • Advice and client improvement plans considered by a team of professionals;
  • Standardised, professional and branded reports, agendas and documents delivered to clients in a clear and professional manner;
  • Innovative as well as clear, safe and sound tax advice, giving options and choices
  • Treating our own business, as a business and carrying out our advice to others ourselves

The key skills and areas that we know underpin all of this and ones that will prove to be the backbone of our success and these are experience and empathy.

Experience in that we have, together and individually, faced and dealt with many business situations from start-ups through to Plc listings and break-ups, management buy-outs and helping to grow business in between.

Empathy, in that we are the business owners, we understand the risks that other business owners take, as we have taken them; we understand the issues that other business owners face, as we are facing them and we understand what it takes for another business owner to build a robust, strong and growing business with appropriate services, systems and people development as we are building one of those as well.

As we have said, qualifications, brand, people, systems, client care are all vital but experience and empathy will always prove to be the strongest attributes of all.

Steven Mugglestone BA FCA
FD Services
Tell us your story

enquiries@mgch.co.uk

www.mgchayles.co.uk

Leicester                  0116 233 8500
Nottingham            0115 941 5193
Birmingham           0121 236 3317

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Written by Steven Mugglestone

February 19, 2013 at 4:37 pm

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