Does the size of an accounting firm matter? – the YES case

I conducted an interview with another CFO recently and asked him the question about the importance of an accounting firm’s brand. 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 the size of an accounting firm matter? – the NO case

Hi everyone.

Shame, shame, shame. Not on you … but me. I have not posted a blog for over 3 weeks. Lots of reasons and excuses. I think the best reason/excuse is that I just finished another book – What do Financial Planning Clients Really Want? I’ll tell you more about that in a couple of weeks.

But back to business. Here is a re-blog of a popular post I wrote a few months ago. Hope you get something out of it.

I asked a CFO friend of mine who used to head up Finance at an engineering firm (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

Does size really matter? – the YES argument

I met with a 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 really matter? – the NO argument

I asked a CFO friend of mine who used to head up Finance at an engineering firm (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

Is bigger better? The NO case

I asked a CFO of a small-to-medium business (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. 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, methodology, 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)

Bye for now,

James

Is bigger better? The YES case

I conducted an interview with another CFO recently and asked him the question about the importance of an accounting firm’s brand. 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

The SUPER CFO

ASFA is the Australian Superannuation Funds Association. It’s the peak industry body for the superannuation sector, representing all types of superannuation funds, service providers and fund members. It’s members manage hundreds of billions of dollars for their clients. It’s a big deal! See http://www.superannuation.asn.au

Matt Haes is the CFO of ASFA. Here is his response to the question,  “When looking at engaging a new accountant, how important is their firm’s brand to you?”

For me, if I was to step outside my current role and work for a small-to-medium business I would more than likely use a mid tier to 2nd tier. In my last role, working in a small financial services company, using a 2nd tier accounting firm just made more sense. At the time we had a big 4 firm auditing one of our funds. The fund was very small and they wouldn’t do an audit for under $10,000 – it would have taken them literally half a day to do it and sign off.  Their fixed cost structures prohibited them from going any lower but the 2nd tier firm we used came in and were happy to take a longer term view and make an investment in their relationship with us.

So to answer your question, brand is important up to a point. For an SME client I would imagine the brand difference between the say top 15 firms in Australia isn’t that important. However, in my current role, given our profile & function within the financial services sector and the fact that we have “big end of town” CEOs sitting on our board, I would tend to use a big brand (i.e. one of the big four) so as to send the right signal to our board, members and other stakeholders.

Tune in next time for another extract from the upcoming book “What do Accounting Clients Really Want?” published by Thomson Reuters in August.

All my best,

James E

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

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.