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

The power of shoes (1 of 2)

As most of you have no doubt discovered by now I’m a big fan of the writings of David Maister. Here is an extract from an article he wrote 20 years ago. Although there has been much change in the world since 1991 – the internet probably being amongst the biggest sources of change – its amazing to see that core human nature are still at the heart of how clients make decisions.

This article, written in 1991, was published as a chapter in David’s book Managing the Professional Service Firm (Free Press, 1993)

Buying professional services is rarely a comfortable experience. Among the unpleasant emotions frequently felt are the following:

First, I feel that I’m taking a personal risk. By hiring anyone, I am putting my affairs, or my company’s affairs, in the hands of someone else, and I’m giving up some degree of control. This is my area of responsibility, and even though intellectually I may know I need outside expertise, emotionally it is not comfortable to put my affairs in the hands of others. Even if the matter is a relatively routine one, I need to be convinced (beyond protestations of good intentions) that my problem will receive prompt and serious attention.

I’m feeling insecure. Since I find it hard to detect which of you is the genius and who is just good, I’m going to have to commit myself without feeling totally confident about my decision. What is more, I don’t yet know if I’ve got a simple problem or a complex one; that’s why I need you, the specialist, to help me. But I’m not sure that I can trust you to be honest; after all, it’s in your interest to convince me that my problem is complex. Professionals are always making mountains out of molehills. Nothing is ever easy.

There is a lot of power in standing in your prospective client’s shoes and seeing things from their perspective. Tune in next time to read the next installment.

All my best,

James E