Does size matter? The “YES” case.

I conducted an interview with another CFO recently and asked him the same question about the importance of an accounting firm’s brand. Unlike the last post, this chap has given a qualified YES – the brand is important. For the time being I will withhold his name but suffice to say his organisation is big, complex and has high expectations of its external accounting  firm(s)

In professional services it’s always the individual it comes down to in terms of expertise and the quality of the work that you get, but you rely on the professionalism of the brand of the overall organisation as to the resources that they send to you.  So at the end of the day it’s very important, but it comes back the integrity of the organisation and the professionalism of those organisations.  If we were looking to appoint a new auditor, for argument’s sake, and I was aware of a local audit firm that’s just gone through some problems with some audit clients, I would probably tend to steer away from them because I would feel that their processes had broken down somewhere that meant that I was taking on trouble by adopting them and therefore I’d go elsewhere.  So, their quality through their professionalism is very important at the end of the day, because you’re paying for that expertise, you’re paying for those services, and in most cases you want something that you can rely on to take to other parties – not just internally – therefore that name has to stand up in front of those other parties that you’re using that work for as well.

They (the external accounting firm) ultimately have to present our accounts to their investors, which are institutional investors, and they wouldn’t be happy if someone was being used that they weren’t familiar with in most cases I would imagine. For purposes of quality assurance with other parties that we would use that information for the brand is absolutely important.

Size does matter for some clients. That being said the individual must be up to the task of delivering a consistent & sound service that provides an effective outcome for the client.

See you next post,

James E

Does size matter? The “NO” case.

I asked Paul Cramsie, who heads up the Finance at Ward Civil (Revenue $80m employing 100+ staff) how important an accounting firm’s brand is to him when he is looking to engage external help/advice. This is what he had to say.

I wonder whether brand is quite the right word. Perhaps reputation or their perceived level of expertise is better. But for the sake of the question, let’s stick with brand. The brand itself in the first instance, I wouldn’t say is that important. I would be more interested in speaking to the people who were going to be doing most of the work and looking at what their experience is, their qualifications, or how “good” that particular individual is. Brand doesn’t really come into it. Look at the case of Arthur Andersen which at the time was a major global accounting brand. They were the auditors for WorldCom, Enron, HIH, Ansett and One Tel – not a very good track record!

You can talk about the brand of a major multinational firm, but they’re only as good as the person that you’re going to be dealing with week to week. There is always going to be variation in the quality of the people within a large organisation. So, I wouldn’t say that brand itself is that important. I probably look at the professional firms generically and say, “Big Four, second tier, smaller…” In my mind, I don’t see any difference between any of the Big Four firms. I wouldn’t really know whether one was better than the other. Furthermore, I wouldn’t know if one individual within the big firms are better than the other.

Some interesting thoughts from Paul. The insight that captured my imagination was his statement regarding the “person” – You can talk about the brand of a major multinational firm, but they’re only as good as the person that you’re going to be dealing with week to week. There is always going to be variation in the quality of the people within a large organisation.”

Leaving aside the important areas of  support infrastructure, methodolgy, staff training and development it is the individual which makes the biggest difference to the client relationship. The other areas should be seen as hygiene factors (their impact is felt when they are not present)

In the next post we will talk about the “YES” case for a firm’s brand being important.

Bye for now,

James

Always leave something on the table

I’ve heard many stories throughout the years of business clients telling me about outstanding experiences with advisors. In the case of accountants, the common thread of these experiences seems to be the tendency of the accountant to more often than not leave something on the table. This means that the accountant always does that little bit extra and goes the additional mile when providing a service. It might be some extra service you don’t charge for or some market news you heard that your client may not be aware of. 

A good example of that little bit extra is a partner friend of mine travelling to the store opening of one his clients at his own expense. He wasn’t invited or expected to be there – he just turned up. The client saw him in the crowd and just smiled. My friend had travelled from Brisbane to Melbourne to go and show his support for the thirty minute launch. A big deal? Perhaps not – but it meant a lot to my friend’s client.

Incidentally, it might interest you to know that this particular client is a member of the Australian BRW 200 rich list (he is worth about $US 400m +) and has used my friend’s services for many years. This client has been so impressed by my friends attitude that he has recently asked my friend (and his staff) to personally mentor and coach his three children (aged in their twenties) in the ways of business, finance and personal wealth management. Not a bad gig.

Simple rule: Leave something on the table = the table will get bigger!

See you next post,

James E 

Are technical skills important?

Paul Cramsie, Associate Director (Finance) @ Ward Civil Engineering has a pragmatic response to the question, How important is technical expertise in an accountant?

The short answer is ‘it depends.’  My first instinct is to say it’s the absolute, number one priority.  However, it depends on the type of service being required from the external firm. At Ward the external work we farm out is a rough 50/50 split between audit and “consulting” work.

For example, if I wanted an audit to be performed by an external firm then I would expect a certain level of competence. By and large an audit is a brief, a set of processes, interactions between the audit team and the business and the deliverable of an audit report. With respect to auditors everywhere, a statutory audit is not rocket science so long as the methodology & process is followed.

On the other hand, when it comes to the consulting work, I want the external accountant to tell us things that we don’t know how to do.  In the case of the non-audit work, going to external people for advice, the technical aspect is everything.  That’s what I’m paying for. I want to have complete confidence that that answer that I’m getting is correct.

A lot of accountants I know place way too much emphasis on their technical abilities. Most of the time well developed & honed technical skills are the way to go, however, as you’ll see in future posts, this is not always the case!

Bye for now,

James E

Its all about attitude

Paul Burgess is CFO of one of Australia’s largest bus builders, Custom Coaches. Here is his answer to the fundamental question, What is the most important quality or attribute you look for in an accountant?

There is a particular attribute that I look for in everypne I do business with; be they people outside the business or staff.  That attribute is attitude.  A person can have the greatest technical expertise or be a financial genius. These things just don’t matter if the person in question has the “wrong” attitude.

Irrespective of the skill or expertise needed by my business, whatever I’m looking for, the attitude of the person is the most important thing that I can buy.  To me, assuming a given level of expertise, if I can work with a person with the right attitude I can solve any business problem.  On the other hand if the person has the wrong attitude this usually results in a much lower likelihood of success.

We have an external financial advisor as a member of our board. He has great technical skills, a strong understanding of the business and the market in which we operate. He has a good head for strategy.  As a board member there many things someone like this chap needs to bring to the table, but for me everything is secondary to a person’s attitude.

When you say attitude, what do you mean?

Put simply I equate attitude to enthusiasm.  If somebody comes into my office and sits in the chair opposite me and I’m interviewing them for an external accounting assignment, an in-house finance or technology role, an operations position then I look at certain things. How they sit in the chair, their facial expressions, the energy and enthusiasm in the way they speak about their work and life.  For example, if someone is telling me they enjoy working with people and can’t look me in the eye, but are looking around the office and out of the window then that is a clear signal to me that their actions don’t align with what they are saying. It really can be that obvious.

See you next post,

James E

What are you looking for?

Another person I interviewed for the book is Andrew Graham, Managing Director of a boutique project management consultancy. I asked him the question, “If you were to hire a accountant/accounting firm what are the things you look for?” Here is his response. (My words are in italics)

Trust, meeting their intentions and experience, in the same market sector, with a business of our size.

Trust? They aren’t an employee and you in all likelihood will only need to meet with them a handful of times.  Why is trust important to you?

Because that is what we  offer our clients. If we’re going to promote ourselves as a trusted business advisor to our clients, then why would be expect anything less from the people that provide a service to us?

Trusted business advisor is a term that’s been cheapened through overuse in recent years.  It’s easy to say.  However, its difficult to earn that status and but it’s very easy to lose.

I think the term is a signal to the market regarding the intentions of you and your business for my business. What do you genuinely intend out of your relationship with me?  Do I, as a potential client, trust that or not?  If I trust that, then I’m happy for you to provide service to me.  It boils down to whether I genuinely believe the intentions you have in your relationship with me.  If I genuinely believe, of course I’m going to take your advice.  In fact, I’m going to look for it.

How do you gauge whether or not I am genuine in my intent for your business, that I want to add to it rather take away?

I don’t know that you can answer that other than through the way you feel about the relationship you have with the person.  I don’t believe that there is any formula for it, I think it’s whether or not you feel right about the relationship.  Do I trust you or not?  If I don’t trust you, whether or not that’s right or not is irrelevant.  The fact is I don’t trust you.  If I do trust you, equally whether or nor that is right is irrelevant, the fact is I trust you.

Bye for now,

James E.

Don’t be an ASS

So far I have interviewed a number of CFOs from a variety of businesses & market segments and have uncovered some interesting common threads.

One thread that has stuck in my mind over the last couple of months is the need for the accounting advisor before they do anything else to understand the business. Here is a quote from Ashley Selwood, CFO, Australian Rugby Union.

… I find at times that external accountants already have some preconceived ideas about what the solution is before they spend the time to actually get to know our business.  We’re a sport and nine out of ten people who walk in the door are either followers of Rugby or at the very least know a bit about Rugby.  When you’re dealing with sport there’s a lot more heart than head involved and sometimes people will walk in the door as a consultant or an accountant and the first thing they’ll do is spend an hour telling you what’s wrong with the Wallabies! Once you get through that, they always seem to have quite fixed ideas of what the solutions are without actually spending the time to get to know our business. In my view this is a fundamental mistake. It not only applies to accountants but all other external professional consultants irrespective of their discipline.

Ashley goes on further to cite some interesting examples of how  accountants have come into the business and not really taken the time and effort to invest in really understanding their business. Too often accountants assume too much without first asking their client questions. As my dad used to say to me when I was growing up (and still does) when you ASSUME you make an ASS of U and ME!

The morale of this post – don’t be an ASS!  (or a donkey for the non-Americans out there)

James E

Asking questions

I’m not an accountant; however, I work with accountants and their clients every day.

Over the course of my professional career, I have come to the conclusion that a lot of accountants (as well as the other advising professions of law, management consultancy, engineering and the like) assume too much about what their clients want. This is not a criticism, simply an observation.  The secret of excellence is the provision of accounting services is to fully understand what the client wants. This understanding is achieved through two simple things: (i) asking better questions and getting better answers and, (ii) listening to what the client is saying (and not saying).

At the moment I’m currently writing a book titled, “What do Accounting Clients Really Want?” which will be published by Thomson Reuters in April next year. The book consists of 25 interviews with people who buy external accounting services for the businesses they either own or manage. Usually the interviewee is the CFO or Finance director. The businesses I’ve targeted for the book are from the SME part of the market, which in my humble view is far more interesting than the big end of town.

For each interview I have stuck to the same core questions with the occasional tangent. These questions are:

1.     What is the most important quality or attribute you look for in an accountant?

2.     How important is technical expertise in an accountant?

3.     Is price and quality a trade off? Does it need to be?

4.     When looking at engaging a new accountant, how important is their firm’s brand to you?

5.     Tell me about a time when you received the best service from an accounting firm. What made it the best?

6.     Tell me about a time when you received terrible service from an accounting firm. What could they have done differently?

7.     If you were to hire a new accountant/accounting firm what are the things you look for?

8.     What is your current experience with your accountant?

9.     What has prompted you in the past, or would prompt you in the future, to change accountants? How often do you change    accountants? What steps do you take to find a new accountant?

10.  Do you prefer time-based billing or a fixed price for service or a retainer arrangement?

11.  What can accountants do to improve their service to you?

12.  Are accountants good listeners? How can accountants be better listeners?

13.  What role does your accountant play in your business? What role would you like them to play?

14.  What’s the smallest change your accountant could make that would have the biggest impact on you?

15.  What do you value most about your accountant? Why?

16.  With the pervasive use of online technologies should accountants give you the option to interact with them via the web?

17.  Do you see areas such as such as tax, accounting, superannuation and audit as a commodity or as a value proposition?

Well that’s enough for now.

See you next time around.

James E

What’s it all about?

Welcome to the first post of what I hope will be a great place to look for insights into better understanding the mindset of clients and what they really want from their professional advisors. The huge advantage of a blog is that the flow of information isn’t just one way. Please add comments and contact me so we can have a dialogue and learn from each other and spread the things we learn through the community this blog in time will create and grow.

My intention is to publish posts 3 times a week – each Monday, Wednesday & Friday. I’ll certainly do my bit, but I’d like you to do your bit as well. PLEASE COMMENT or contact me via email, LinkedIn, Facebook or Twitter so we can make this blog as useful as we can!

See you next post,

James