Post-Covid-19, a holistic approach to service provision could be the next step in the evolution of your practice as clients increasingly seek advice across the whole business
This article was first published in the June 2020 China edition of Accounting and Business magazine.
The financial impact of Covid-19 will be felt for some time to come, and clients are more in need of their accountants’ advice than ever. And as with most consumers, people tend to want to shop for everything in one place. Small business owners, contractors and freelancers tend to opt for all-in, fixed-fee monthly ‘packages’ covering a number of their requirements, such as bookkeeping, accounts and tax returns.
Of course, larger clients have larger needs, and bigger firms are equipped to meet them, but should small and medium-sized practices (SMPs) follow suit and broaden their service offering?
Brendan Sheehan FCCA, ACCA Council member and CEO of White Squires, a Sydney-based transformation project management consultancy, suggests this could be an aspiration too far. ‘The Big Four already offer the full range of generic services to the big end of town, and corporates tend to defer to established brands. Smaller firms really have to have a specialist niche to be able to tap into that corporate world,’ he says.
Therein lies an opportunity for SMPs, Sheehan believes. ‘White Squires, when you strip it down, is really just a project management firm, but our approach focuses on helping our clients, through practical on-the-job training, to integrate agile work practices into their day jobs,’ he explains.
Boutique firms have the agility to be able to address a specific need with a specific solution ‘that maybe wouldn’t have the scale to be looked at by the Big Four,’ Sheehan adds.
Magdalene Ang FCCA, director at R Chan & Associates in Singapore, agrees: ‘SMPs are nimble by their size and structure, and therefore able to diversify, and react to change, in a much shorter response time than bigger firms.’
Ang points out that many SMPs already provide one-stop services. ‘Our practice focuses mainly on audit but we work with partners and affiliated companies to provide services such as payroll outsourcing, routine bookkeeping and tax compliance work, including advising on contract-related matters.’
As automation and artificial intelligence (AI) continue to reduce revenues from compliance work, some see it as common sense for practitioners to develop other income streams. ‘It makes complete sense to de-risk by diversifying services,’ says Carl Reader FCCA, joint chairman of D&T business advisers and accountants. One way to do this is to add services within your existing specialism, which also moves your clients closer to the one-stop-shop experience.
A more common approach is to expand a generalist service offering to include ancillary services. Singapore SMP Helmi Talib & Co is already expanding its suite of services, with specialities in areas such as cryptocurrency, internal audit and risk consultancy, as well as some aspects of human resources advisory. ‘Where we have no in-house capability we try to rely on our associates in the International Association of Practising Accountants or on other colleagues in the industry,’ explains managing partner Helmi Talib FCCA. ‘We try to remain engaged with the service provider we recommend to our clients and resolve any issues they may face.’
The firm does this essentially to enhance relationships with the client and increase its chances of retaining them, Talib says. ‘It would not be possible for us to build all the advisory capabilities our clients need as the business volume may not justify that, so we believe this approach suits us best.’
Yin Lai Pat, managing partner at Ecovis Malaysia, agrees that it is ‘appropriate and best practice’ to provide advisory together with necessary outsourcing services, believing that clients prefer having one communication window. ‘We provide a wide range of services through different divisions with dedicated expertise for each,’ Pat says. ‘The core value of the firm is to resolve client business-related matters by leveraging on different expertise we have.’
Diversification, however, is not without its risks. ‘Failing in the additional service can jeopardise the whole relationship with the client,’ says Reader. ‘You need to ensure you have got the requisite skills and expertise, either in-house or via a partnership with other professional advisers.’
Having worked for a Big Four firm as well as in industry, and now running her own practice, Peony Consulting Services in Hong Kong, Kelly Chan FCCA finds that most SMPs are able to provide one-stop-shop services. In addition to basic accounting and tax services, they can also play an important role as the central point of contact for referring clients to other providers with specialist expertise.
‘It is common practice for SMPs to collaborate with other service providers to fulfil their clients’ needs,’ she says. ‘Some SMPs may even merge with their partners for optimal synergy.’
Leveraging online platforms ‘is inevitable’, especially since the Covid-19 pandemic, she says. However, given the traditional way of doing business in Asia, whether clients will welcome such change is less certain. ‘Online platform deployment comes with potential cyber and data security concerns that SMPs and their clients should mitigate as ongoing best practice,’ she adds.
‘To ensure business relationships are not jeopardised due to having less physical contact, close communication with clients to understand their needs and proactively provide value-added services is essential.’
Iwona Tokc-Wilde and Peta Tomlinson, journalists
"Failing in the additional service can jeopardise the whole relationship with the client. You need to ensure you have got the requisite skills"