Adapt­able small firms fo­cus on value

For many clients, smaller, spe­cialised and lo­cal ac­count­ing firms are a nat­u­ral choice for flex­i­ble, per­son­alised ser­vice.

Sunday Star-Times - - BUSINESS -

Smaller ac­count­ing firms are part of the fab­ric of many New Zealand towns and cities but they, like the large firms, have to adapt to a rapidly chang­ing mar­ket.

Ac­coun­tants ex­pect their ser­vice de­liv­ery and rev­enue streams to change rad­i­cally, ac­cord­ing to our Top 30 Ac­count­ing Firms re­search. In the new en­vi­ron­ment, sustainable suc­cess will re­quire dif­fer­ent and bet­ter skills.

Th­ese mar­ket changes may be driven by tech­no­log­i­cal change, but the new ac­count­ing skill set is not di­rectly re­lated to tech­nol­ogy. Adapt­abil­ity was the num­ber one skill re­quired, nom­i­nated by 85 per cent of firms, fol­lowed by emo­tional in­tel­li­gence (83 per cent) and then crit­i­cal think­ing (75 per cent).

Our re­search show th­ese firms are par­tic­u­larly chal­lenged by staffing is­sues, rather than tech­nol­ogy. Sixty one per cent re­ported staff re­ten­tion as their top chal­lenge while 54 per cent nom­i­nated their staff skill set.

Staff turnover was also the big­gest threat to client trust, equal with the im­pact of a re­ces­sion.

That sounds like a lot to man­age – and it is – but ac­count­ing firms are re­mark­ably pos­i­tive about their abil­ity to adapt, in par­tic­u­lar through deep­en­ing their re­la­tion­ship with clients and de­liv­er­ing more high value ser­vices as well as tra­di­tional com­pli­ance.

For some, that means em­bed­ding them­selves in their clients’ busi­nesses.

Hud­son Taylor was one tra­di­tional ac­count­ing firm that re­viewed and changed its model over the last few years. Partnership is the new goal.

Tra­di­tional com­pli­ance-based and core ac­count­ing has be­come much eas­ier due to tech­nol­ogy such as Xero, mak­ing it hard to com­pete on price, as­so­ciate Mark Hud­son said.

To shift its fo­cus to ad­vi­sory and growth ser­vices, the Welling­ton-based firm changed in four sig­nif­i­cant ways: it moved to a more dig­i­tal of­fice model, brought on the next gen­er­a­tion of part­ners, up­skilled staff to be peo­ple ori­ented and to sup­port a di­verse range of ser­vices, and be­came flex­i­ble to adapt to client needs.

Hud­son Taylor now acts as ex­ten­sion of client busi­ness, rather than as an ex­ter­nal ad­viser.

“Two key ways that we achieve this is ac­tively part­ner­ing with busi­nesses and ac­tively iden­ti­fy­ing growth op­por­tu­ni­ties,” Hud­son said.

“One ex­am­ple is our partnership with En­tity So­lu­tions, who are an Aus­tralian com­pany that re­cently en­tered New Zealand.

“While pro­vid­ing the core ac­count­ing ser­vices, we have also helped them grow new busi­ness and con­nected them with our net­works. We reg­u­larly con­nect clients where we think there is po­ten­tial for growth and syn­er­gies.”

For Auck­land-based bou­tique firm Oxy­gen Ad­vi­sors, pro­vid­ing an out­sourced CFO func­tion for start-up com­pa­nies has be­come an area of spe­cial­i­sa­tion.

The CFO has a seat at the ex­ec­u­tive ta­ble, pro­vid­ing com­pa­nies with both strate­gic and func­tional sup­port. Like the ex­ec­u­tive CFO, the out­sourced CFO not only de­liv­ers and in­ter­prets man­age­ment in­for­ma­tion, but also works on the gnarly chal­lenges of busi­ness fi­nance and cap­i­tal rais­ing.

“In 2017, we helped our clients raise ap­prox­i­mately 20 to 25 per cent of the early stage cap­i­tal raised in New Zealand,” Oxy­gen di­rec­tor Matt Dold said. “We don’t do com­pli­ance.”

All of Oxy­gen’s clients are early stage com­pa­nies, mainly tech fo­cused and on a fixed-fee re­tainer. To en­sure strate­gic en­gage­ment, Oxy­gen main­tains a very low ra­tio of one se­nior staff mem­ber to every ten clients.

In ad­di­tion to as­sist­ing with strate­gic, cap­i­tal rais­ing, new prod­uct de­vel­op­ment and R&D ini­tia­tives, Oxy­gen will also as­sist with more dayto-day ser­vices such as bank rec­on­cil­i­a­tion and ac­counts re­ceiv­able.

For Welling­ton-based GoFi8ure the client re­la­tion­ship is about three things: ef­fi­ciency, ef­fec­tive­ness and sus­tain­abil­ity.

Tech­nol­ogy is a key tool for driv­ing ef­fi­ciency and GoFi8ure claims a soft­ware “skill ma­trix” in­clud­ing more than 52 apps over 18 dif­fer­ent in­dus­tries.

“By keeping up to date with in­dus­try apps, our ex­pe­ri­enced team can iden­tify ar­eas of weak­ness within a client’s busi­ness and pro­vide a cus­tomised so­lu­tion to en­sure their busi­ness runs more ef­fi­ciently,” ex­ec­u­tive di­rec­tor Lisa Martin said.

The firm also of­fers a “war­rant of fi­nance” ser­vice which in­volves re­view­ing the client’s ac­count­ing ledger or in­for­ma­tion to iden­tify and ad­dress ar­eas of risk and in­ef­fi­ciency.

“Peo­ple buy with their hearts and jus­tify with their heads,” Martin said. “They pick the peo­ple who make the best per­sonal con­nec­tion with them.”

“We de­velop close part­ner­ships with our clients. They see us as a trusted ad­viser who is loyal to them and their busi­ness.”

Suc­cess is about be­ing trans­for­ma­tional rather than trans­ac­tional. Gone are the days of ac­coun­tants only con­nect­ing with clients once a year.

“Less is out, more is in,” Martin said.

PHOTO: 123RF

Newspapers in English

Newspapers from New Zealand

© PressReader. All rights reserved.