Beyond compliance-only services: how forward-thinking practitioners are responding to the challenges of the recession

The Validis Insight Interviews explore the challenges and opportunities that accountants face, how forward-thinking practices are responding and how accounts review technology supports their goals.

Interview with Graham Smith, Senior Partner at Cunningtons, Chartered Certified Accountants & Registered Auditors.

About Cunningtons

Cunningtons are a well established multi discipline practice formed in the 1930s, initially focussed on the farming community. In a soon to be broadcast video interview on Accountancy Age, Graham Smith Senior Partner, who has been with the practice for over 30 years, discusses how the firm has adapted, the current economic challenges faced, and how Cunningtons plan to tackle the ongoing business issues moving forward.

A changing practice

Business is very different now. In order to be a modern business orientated accountant, we should be advertising, we should be marketing, we should be out there networking and basically all things are possible if we keep working at it. We have been successful, built up a good client base and are very profitable. It became apparent as our experience and profit grew that the ideas we had were working. We need to continually modernise, move forward and be a very different firm to the traditional compliance based practice we had been in the past.

We were generally based on traditional, non audit, but very much compliance based work with clients in the main that you see once a year for very modest fees and they go on their way. We were quite happy that they didn't bother troubling us until their next year end came round.

We have worked very hard to get away from pure compliance work. We work to try to provide as many value added services as possible.

I think that what marks us out at Cunningtons as different from the average firm of accountant is the amount of care and attention our client get from us. We are very much, for a majority of our clients, an external finance director, a sounding board, hand holding, providing whatever support is needed.

The services that we are providing are very much focussed on business growth, succession planning, exit strategy, strategic planning, profit improvement, detailed tax and remuneration planning. To do that successfully you have to be very close to your clients and be their most trusted advisor.

Value add services

The day of the compliance based practice is well and truly limited. Clients are much more aware of the range of services that are available out there. If you are not providing them they will find someone else who is. There is no value from the client's perspective in an audit or in pure tax compliance work, just knocking out annual accounts for the sake of preparing a tax return. All they see is a significant fee, to deal with something which is historical and which, by and large - especially in the current climate, has hardly any relevance to where they are actually going in the future.

Clients are looking for advisors who will provide proactive advice and help them maximise the opportunities they have got, not dwelling on history. You can use the history as a learning tool but that's all it is. I spoke to someone a little while ago in a car dealership, not a client, but he'd been moaning about the fact that his accountant comes in 6 months after the year end, spends a fortnight on site doing the audit, tells them how much profit they made, "which we knew 6 months before he got here", tells them how much tax they have to pay, sends an enormous bill and says we'll see you next year.

Justifying larger fees

The easiest way I find to convince a client that the management accounting and other added value services are worthwhile is basically to point out the amount of time that is generally spent at the end of year producing a set of annual accounts when you haven't been involved during the previous period, 12 months, 6 months whatever it is. By involving yourself on an ongoing basis you develop such knowledge of the business, the client's aspirations and what's going on. You become confident about the figures that you are seeing on a month by month basis, and of course you can help to make sure that they are accurate.

The extra time and expenditure during the course of the year can, in large part, be recouped in the time saving at the end of the year. The production of the year end accounts is obviously that much quicker in terms of providing figures to banks and financiers and others. Although there is a larger fee, it is very easy to demonstrate to the client that the increase is not necessary significant. It is equally as easy to show them how quickly you can recover the extra cost in the advice you've given them during the course of the year, and the savings and improvements they can make to their business and finances.

The drive for more accurate, timely, and reliable information.

The need for reliable information is obviously fundamental in these times more than any other. Banks in particular are holding directors far more accountable for the quality of information being presented. I had a recent discussion with a bank manager who confirmed that the days of turning up to a meeting with a client and the client's accountant, and the bank talking to the accountant rather than their client are long gone. They expect the client to have a working knowledge of their business and their accounts and an understanding at quite a detailed level of what lies behind the figures. The client needs to know that they can rely on the figures; the bank needs to know that they can rely on them. The only way you can rely on anything is absolute knowledge that they are going to be accurate and complete.

The key role of technology

The correct use of technology will firstly save a substantial amount of time. Secondly it will provide you with a powerful tool that you can manipulate and use in different ways relative to the client you are working with. One client may need you to analyse one item, whilst another client may need you to drill down. Technology gives you the flexibility to provide the range of data - that range of information that will vary from one client to another. You can do that in a speedy way, and you can use the resulting information in a "what if" analysis or scenario.

Validis

A product like Validis with the capabilities it has, gives you exactly the type of analysis you need and the ability to tailor what you are doing to the individual clients needs.

 

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