Adding value - Practice profits

As clients seek a broader range of services from their accountants, technology can help firms add value to the services they offer.

Scandal sells, so the profession has come in for a lot of bad press of late. Fortunately, SMEs continue to turn to their accountants for trusted advice when making business critical decisions - and many would like their accountant to offer a broader range of services.

Towards the end of last year, research into clients' shifting perceptions towards the profession found respondents looking to their accountant for the provision of financial services (61%), corporate finance including structuring and mergers and acquisitions (53%), HR and employment law advice (49%) advice on legal and contractual issues (48%), business process transformation consultancy (33%) and corporate strategy and industry benchmarking (30%).

Making the move away from number-crunching compliance work into value-added services requires a high level of practice automation, and a more proactive approach by practitioners, and can be a rewarding experience for practitioner and client alike, bringing financial benefits to both.

Identifying opportunities is something firms of all shapes and sizes are equally able to do, but seizing those opportunities can be more difficult - particularly for small firms and sole practitioners. One of the reasons that many don't stray very far beyond basic bread and butter accounting services is their inherent lack of expertise and resources, and the time and cost associated with their acquisition or development.

Software and systems can make it easier to do this by simplifying the procedures and reducing the costs associated with compliance work, facilitating de-skilling (where appropriate), and adding value to recurring services such as accounts preparation, as the Preston-based firm of Danbro Accounting found when it introduced its online accounting service.

Internet incentives

'Persuading clients to use internet accounting as our preferred method of accounting has certainly paid off and we are receiving new enquiries all the time,' says Damian Broughton, senior partner with the firm. Various online offerings are available from specialist suppliers including Sage, easycounting (backed by Jayson Newman, a division of the Numerica Group), eaccountingplus, and Iris, all utilise the web to offer similar features to practitioners and their clients. Danbro opted for iCash from Iris.

The system provides accountants with an online bookkeeping system that clients can use to enter their business transactions 24/7 from wherever they happen to be, and those with a query need only press the email button on screen to alert the accountant instantly. Broughton sees more and more companies transferring to this method of accounting because it 'helps them to see in real time the state of their accounts'. The fact that Danbro made the commercial decision not to charge for the service has also helped.

The product has built in links that make it easier for accountancy firms to transfer figures from iCash to its accounts production program, effectively reducing the workload at year end, so these savings can be passed on to the client. In addition, there is no need for the client to purchase any accounting software, making it a far more economical proposition than traditional PC-based accounting software.

The system is totally personalised to the client with all of the appropriate classifications set up by Broughton and his team to make data entry fast and trouble free. Because the accountant controls the whole process, the client is effectively relieved of all IT-related issues. This makes it particularly appealing to smaller clients who tend to be less 'savvy' when it comes to computers.

But it also appeals to exactly the opposite sort of client, such as Bruce Hargrave, an IT consultant. He has been using the iCash system for a few months, and finds it far more convenient than traditional methods. Hargrave particularly likes the fact that he can work directly from bank statements to reconcile balances: 'I prefer to work online rather than filling in spreadsheets,' he says. 'This method is quick and convenient and I like being able to see on-screen exactly what Damian (Broughton) can see.'

Danbro has identified several client benefits (see panel 1). 'We have two hairdressing firms and a travel agency currently looking at the system,' says Broughton, 'and we are confident that many more clients will start using the service during 2003.'

This type of system can be a 'win-win' product as both the client and the accountant benefit from its use. Accountants have the advantage of working with 'ideal data', properly recorded under the appropriate classifications.

The system also provides practitioners with an opportunity to offer pro-active advice based on current business circumstances, rather than on historical information that is a year out of date - and strengthen the links between the firm and its clients.

'More firms need to move up the value chain, offering additional services their clients will be prepared to pay,' chides Gordon Gilchrist of 2020 Consulting. It's something his firm is more than happy to advise accountants on, but at it's most basic level it's all about good client management, and that's all about inspiring confidence and trust. If you can instil confidence in clients they are more likely to trust you with something a little more demanding than their tax returns.

Winning ways

Award-wnning sole practitioner Roy Lyness has used software and systems to help him focus on the provision of value-added services, and de-skill many of the basic services offered to clients by the nine staff in his team. It's an approach that seems to impress clients, and other members of the profession. Lyness was voted Sole Practitioner of the Year by RAN ONE in 2001, the AVN Firm of the Year for 2003, and he was recently selected as runner-up for Entrepreneur of the Year by the International Association of Bookkeepers.

'Technology has been fundamental and crucial to what we do,' says Lyness.

But so has being able to rely on the help and support of the Added Value Network: 'We owe a lot of our success to it,' he adds. The AVN is a national network of accountants with around 1,000 partners and 115,000 clients, and it has 400 local offices throughout the UK. Its mission: 'To help the UK's owner -managed business become the most successful and enjoyable to run in the world.'

It's a novel idea for accountants - and AVN does not court publicity.

Instead, it concentrates on making a difference 'quietly and professionally, one office and one client at a time'. And it has helped make it one of the best kept secrets in accounting. In a similar manner to RAN ONE (an international network of more than 3,000 firms), AVN is helping small and sole practitioners access some of the economies of scale and expertise traditionally associated with larger firms.

Both organisations provide members with access to software tools developed specifically for the profession, designed to help both practitioners and their clients operate more effectively. At its 2003 European Annual Conference in May, RAN ONE announced a number of new initiatives including the Online Wizard Library. OWL is a resource of consulting wizards designed to help members to deliver business solutions to their clients. The tools enable firms to analyse client problems, and implement solutions identified during a diagnostic review - an important value-added service for smaller accounting and consulting firms.

'The recent shake-up of the accounting and consulting industries has created a huge window of opportunity for firms with the expertise and skill set our members possess,' says Jim McKerlie, CEO of RAN ONE, and OWL will help to 'add a new dimension to the broad range of services they currently offer.' The tool has been designed for use with RAN ONE's Business Developer, to help accountants improve the 'health and profitability of their clients' businesses.'

Client benefits

The tools provided by AVN also offer accountants ways of making the client more profitable. 'Compliance work is a grudge purchase,' says Lyness, 'but if you offer clients the sort of value-added service that gets a result they think you're fantastic,' says Lyness, adding: 'It makes them see you in a completely different light, as more of a business adviser.'

Among the software tools offered by AVN are Javelin, a practice management system, System Builder, a tool that helps accountant and client to 'systemise their business', and Simple Stuff That Works (SSTW), a modular system that accountants can sell to their clients to help them grow their businesses.

According to Lyness, Javelin has helped his own firm to do just that, by improving its efficiency, and taking a lot of the leg-work out of servicing clients. He says: 'It has a very effective reminder system for client jobs; it warns you about the approaching year end, and so on.'

Lyness has further automated the practice by adopting Scanfile, from Canon, to minimise paper use. 'We've always tried to be at the forefront of technology,' says Lyness, but the move towards the paperless office was spurred by practical concerns, rather than technology for its own sake. 'The sight of the office combined with the need for increased filing space' were significant motivators, adds Lyness, plus 'the need to be able to see everything on screen'. With the system in place, incoming post is scanned in by the office administrator, and then distributed electronically.

Lyness comments: 'It's all instant, and it's easy to track. It's worked phenomenaly well, and we're in the process of adding accounts.' Similar systems include Quantus from Talos and Singleview from Solution 6 (see Accountancy, March, pp88-90).

All change

While Lyness is all for change, he's careful to ensure that quantifiable benefits will follow. The automated system has been carefully constructed to replicate the manual system, because it works well and everyone was familiar with it. 'This way, you get the buy-in of the team,' he explains: 'Everyone is familiar with what they're doing, but they can see the benefits automating the process.'

Clearly identifiable benefits have also been crucial to the uptake of System Builder: the tool has successfully assisted the firm and its clients.

It has been designed to help entrepreneurs overcome the very thing that makes them successful: their unique involvement in their business. Building and developing a business tends to make the entrepreneur that did it vital to its future success. One of the many downsides to this is the fact that it does nothing to maximise the value of the business, and makes it very difficult to grow the business beyond a certain size. Lyness explains how System Builder helps. 'By using technology to systemise the business, you can ensure that everyone does everything in the same way,' says Lyness.

A special version of System Builder is available for AVN accountants, who also get the right to sell the generic version to clients. 'It can make small companies more valuable by making their success less dependent on the people who built and run them,' adds Lyness. And it does wonders for your relationship with your clients. 'It builds loyalty, and helps them see you as a business adviser rather than a number cruncher.'

Practice makes perfect

Being a business adviser rather than a number-cruncher seems to be the way forward. Whether accountants make the move with the help of software suppliers or the support of networks such as AVN and RAN ONE seems to matter less than that they do it somehow. As Lyness says: 'Clients want this kind of advice. If you can't deliver, they are quick to move on.'


•   Convenience: it's possible to log on to the system wherever there is a web browser.

•   Economy: there's no need to buy an accounting system, and no charge for the service.

•   Personalisation: iCash is pre-set with appropriate classifications by Danbro.

•   Security: there is no risk of leaving data behind, such as when transferring from laptop to desk PC.

•   Upgrade free: there are no software updates to install, so clients can focus on their business.


Bulcock and Co has used software and systems to help it evolve from a more traditional firm into a specialist regularly preparing financial information for its clients. 'In many cases we act as a part-time finance director,' says partner Mike Bulcock. It's an approach that's done wonders for the firm. 'Our reputation has grown, resulting in an increase in new customers and profits,' which have doubled over the past few years.

It is an experience echoed by sole practitioner Sheila Cooksey. Increased automation has enabled her to service five times as many clients in one week as she used to, and improve the accuracy and timeliness of the financial information available. 'My clients know where they stand financially at any time,' says Cooksey, a Tas Books user: 'Just a few quick inputs can produce whatever reports they need,' enabling her to relieve them of many of their cashflow problems - one of the main reasons for small business failures.

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