Practitioners squeezed on fees

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After hearing several downbeat comments, AccountingWEB editor John Stokdyk tried to find out whether accountants were being pushed to reduce their fees, and how they were reacting to such requests.

When you first hear a new piece of information, its significance can pass you by. The second time you encounter it, your ears might prick up in recognition. By the third time you hear the same thing, you are justified in thinking you have encountered a bona fide trend.

After a hint in January, the suggestion that accountants were coming under pressure to reduce their fees resurfaced in June. Mark Hill of Woking-based Ashfield Accounting told me at Accountex that an automated bookkeeping system based on bank feed data from BankLink helped support client retention and acquisition by keeping their fees down.

To establish whether accountancy fees are under threat, we put out feelers in Any Answers and our LinkedIn group asking whether other members had experienced similar pressure, and how they dealt with such requests.

The Any Answers fee squeeze thread attracted 80 comments that spilled over into arguments about time billing versus value pricing and whether or not accountants were entitled to a comfortable standard of living (with £40,000 set as the rough threshold for debate). Among those participating in the debate...

Continued...

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Comments

Lack of regulated accountants is causing problems    3 thanks

norstar | | Permalink

I find that where clients are defecting to lower fee firms, it's generally to a non-qualified accountant who isn't affiliated to the ICAEW etc and so they don't have standards to maintain. The ACCA make us jump through such hoops that we have to charge higher fees. We very seldom lose a client to a fellow ACCA or ICAEW firm and never on a fee basis.

However I always delight in checking the filing record after clients leave for a non-qualified cheap firm and seeing a missed Companies House filing deadline, or receiving HMRC correspondence including penalty notices... This happens all the time.

I really do think it's time to look at regulating accountants again - without tarring all with the same brush, I'm getting worried at the number of incompetent sharks out there, luring clients in with fees 2/3s of ours, and then causing the client problems with shoddy and cut-price service. It harms the taxpayer, it harms HMRC's coffers and it harms the professionals who work hard to achieve a qualification only to see it undermined, along with their turnover, by people who cruise in, undercut on price and call themselves an Accountant.

Happy Up North Accountant's picture

Bit of one bit of the other    2 thanks

Happy Up North ... | | Permalink

I find that many of the ACCA / ACA practices in my area tend to massively over charge compared to some very competent AAT practices who charge a reasonable price and do a good job. People, even accountants, are desperate for work and there's nothing wrong with competition.

 

However, even though I am on the lower end of the fee spectrum even I am encountering more and more chancers. I had a guy recently who contact my practice to ask how much we would charge to do his return - he only has CIS income and has all statements available etc for a FULL year and he thought that he was due a rebate of around £2k. I said on that basis I was happy to get it done for only £150. He asked if I could do it for cheaper, I said no, he said he would ring me back. That was a few weeks a go and he rang me yesterday. Anecdotal but I'm experiencing this more and more!

Paul Scholes's picture

nostar    3 thanks

Paul Scholes | | Permalink

I'd put it the other way, the problem is just as much the responsibility of regulated practices, thinking they have a god given right to charge higher fees, that causes the problem, rather than unregulated practices charging what are probably far closer to "market" rates for the same work.

Just because an accountant isn't regulated doesn't mean they don't maintain the same, or even higher, standards.  Integrity, honesty, conscientiousness, and experience don't appear out of nowhere just because you pass some exams.

As to the ACCA making you jump through hoops, thus justifying higher fees, unless your a regulated auditor or IP, in which case you can charge premium fees for that work, what hoops do they make you jump through, that costs so much?  Surely, unless you think them unnecessary, wouldn't you jump through the same hoops even if you were not regulated? 

The question of regulating accountants has been debated to boredom on this site over the years. Firstly, the term "accountant" covers practically every aspect of financial recording and analysis carried out by hundreds of thousands of individuals, in varying degrees and so you'd never be able to pin it down in law and secondly, a great deal of the work we do can actually be done by the punter, and, these days, many businesses and individuals don't bother with an accountant.

The mystery of the numbers and the related ivory tower have been evaporating for years and it's only because some clients are kept in the dark that firms can get away with the fees they do.

frustratedwithhmrc's picture

Qualified v unqualified    2 thanks

frustratedwithhmrc | | Permalink

D Weston wrote:
The whole qualified v unqualified argument is a total red herring.

I disagree, I think there is a lot to be said for clients cutting too close to the cloth on costs by using unqualified accountants.

Everyone has to start somewhere and an unqualified accountant can be a great asset to a practice given the right guidance and oversight.

An accountant on his/her own on the high street is just asking for trouble.

Equally, a qualified accountant with enough experience can stop clients doing stupid things like "mate down the pub" type tax dodges, because we know that clients are often their own worst enemies.

Fee pressures

Robertspj@mail.com | | Permalink

When I read this article and follow-up comments, and contrast it against other sectors, some thoughts come to mind.

Clients/customers will always focus on price if they perceive their accountant to be providing the same offering as another. Why wouldn't they? A client has no choice as there is nothing else to compare.

Naturally, this then leads to how your offering is different? Is it? Great, if so - make that clear but most importantly get over to your clients why you deliver value and how much (use the terms/language your client does - how do they think about making money, saving money or managing risk for their own business?).

If you think your core services are not differentiated, are there elements of what you do that maybe are or that the client does not appreciate (you may not have appreciated these fully yourself). For instance, your availability, speed to respond, billing arrangements, location, amount of face-to-face time, ease with which the client can send you information in a format that is easiest for them, broader business insights you share with them as part of your service, knowledge of their industry sector etc. What do any of these mean to your client - how does it benefit them and have them think about your offering in a different way to the competitors. If they attach sufficient value to what you do that others don't, you should get less pressure on pricing.

Paul Roberts 

It's pure economics....    2 thanks

youngloch | | Permalink

OK, I accept that for my theory to apply you have to have a good compliment of clients to begin with and have been around for a while but in our case it is supply and demand.

We have never advertised and every client comes from recommendation.

We have our rates and, yes of course you can always tweak here and there, but in the last couple of years I have found myself being able to pick and choose from the clients who approach us rather than feeling we have to take on anyone who comes our way.

Just this week I declined a new client that within 2 minutes on the telephone had trouble written all over him.

The issue I often find is that because clients come from recommendation they are aware of me as an individual from the outset rather than the general firm. Yes, other staff have a good level of input with their work and plenty of one to one with the client, but such is the demand on my time that I am then able to hold fees (and try to tweak 2% or 3% increase each year) safe in the knowledge that if a client were to suggest leaving to go to a cheaper firm that I can let them.

I’d rather be chasing the turnover and profitability of the firm up by being choosy rather than chasing the firm down in a spiral.

If I was to sum up what is happening from my perspective it is that the big firms are losing clients to the medium firms who are then losing them to the smaller firms (2 or three partner or sole practitioner firms) and, on very rare occasions (only once in the last three years) we lose to the cheap as chips firms.

Example: New company client came along in February. He took his records to a medium firm in November with the accounts being due at the end of December and, they completely forgot about him. Small fish in a big pond. He came to us having taken the papers back from the medium firm and now into penalty territory, our fees were 60% of those he paid previously and to be honest it’s a great fee for us. Additionally we’ve now “trained” him e.g. never mind instructing us in November, he dropped in the papers for this year last week. He’s over the moon with the fees and the service and I know I will get referrals from him because of that.

Maintain quality and clients worth having won’t risk leaving just to save a couple of hundred pounds a year. They stand to lose much more AND they lose the relationship they will have built with us over a long period of time.

Stay confident and just concentrate on doing a good job because that will attract good clients who appreciate what we do for them – which in our case is that we work really, really hard!

Unqualifieds aren't always cheaper    2 thanks

Ken Howard | | Permalink

Near me, we have a qualified book-keeper who started doing Sage book-keeping and payroll about 10 years ago but after a few years decided to do the accounts and tax returns in house rather than pass them onto other accountants.  I've had several clients move to me from her and not only is the quality shockingly poor, but her fees are far more than I would charge, and I don't think I'm cheap!

Most jobs are the usual shoddy Sage work, i.e. little or no allocations of payments against invoices so no certainty as to whether there are any missing invoices or missing payments - as a result aged debtors and aged creditors reports look crazy and can't be relied on.  Usually no attempt to balance the cash, ancient items on the bank reconciliation that have never been investigated, etc.  Often no sign of stock nor work in progress in the year end accounts when there clearly should have been.  Worst thing, though, is that she's been charging £2k-£3k for such shoddy work for relatively small/simple shops, tradesmen, etc.

She gets away with this because she has the aura of a "mother figure" and seems to exude confidence about herself and her work.  It's all smoke and mirrors and appearance.  She gives the client their paperwork back neatly organised in files which looks good, but the clients never see the underlying poor book-keeping and don't understand their accounts/tax anyway, so they think she's doing a brilliant job and is worth the extra money she charges!

Perhaps that's where the qualified accountants are going wrong.  Perhaps we rely on doing the job right (we get a warm feeling inside) but we aren't good enough at marketing ourselves to our clients on the gimmicky side of things, so they don't know that we've done a good job.  I'd never have previously thought of tidying up the client paperwork - usually I give it back in the same state it arrives, but perhaps I should organise it neatly, put it in a file, maybe even tie it with ribbon and a bow, so that the client may appreciate my work more.  It seems to work for the book-keeping firm!

Agree with Ken    1 thanks

youngloch | | Permalink

So much of it is about the relationship with the client and that is about more than just doing the numbers well - it's about being able to communicate and building the bond. Being part of their “team”.

Being able to see the face, know the name, know about their wife/kids etc etc. Put it this way - about 10 of my clients came to my wedding as well!

On the subject of client papers it’s also being able to pick the phone up and tell the client that if he wants to deliver his receipts screwed up in a carrier bag that he is going to have to pay for half a day’s time of the junior member of staff to straighten them out and file them and giving them the choice to come back and do it themselves! Having frank conversations and the client then walking in with a smile and apologising instead of getting the hump with you indicates things are on track - I'm sure they prefer that rather than us saying nothing and then charging more - the staff appreciate it as well!!!!!

God given right...

Trevor Scott | | Permalink

I wouldn't say that ICAEW members think they have a god given right to charge high fees, but I do think that many of them offer a poor quality of service; irrespective of the scale of fees. Many accountants promise the World to new clients, claim fantastic customer advice/support etc, but then simply palm the job off to a clerk until the year end accounts need signing; at which time the client will get part/whole hour of time....to justify the fee. The reality is that in many cases the accountant ignores the client .... unless they're late with a paying an invoice, and fails to engage in a mutually beneficial relationship in which the client's business is helped through a high standard of quality financial management. Hardly a surprise that many people change accountants when they realise that if they're only getting fish and chips, why pay for cordon bleu?....especially when the tax system is supposed to be so easy that you just "help yourself". I could also comment on "professional" accountants continuously fouling up, either with cases of negligence, incompetence, non-existent/poor management skills, or issues of personal integrity.  

Paul Scholes and D Weston

norstar | | Permalink

I'm not saying that I should jump through any number of hoops nor that being qualified is a guarantee of competence. I've seen enough questionable qualifieds to know that.

Paul said:

"Just because an accountant isn't regulated doesn't mean they don't maintain the same, or even higher, standards.  Integrity, honesty, conscientiousness, and experience don't appear out of nowhere just because you pass some exams."

However bear in mind that whilst marriage isn't a guarantee of a happy family home, statistically, families stay together longer and children achieve better in married families. The same applies in my view to qualified vs unqualified accountants.

Statistically, and in my experience, the cheaper fees and bigger problems for clients have come from unregulated firms/individuals who shoot from the hip and sail close to the wind with lack of documented work, proper advice etc that I know if the ACCA found on my files, I'd be in schtuck for.

And yes, I am a regulated Auditor and so "jump through a lot of hoops"!!!

Paul Scholes's picture

nostar

Paul Scholes | | Permalink

Our experiences are clearly different, I've spent far more time during my sentence working with unqualified (by letters) accountans than qualified ones and have always found that the quality of work as well as their relationship with others, be it clients or colleagues, depends on human rather than regulated attributes.

As to comparing my relationship with the ACCA with my relationship with my wife....the ACCA and I have yet to consummate it and so, until we do and have some offspring, I'll have to take your word for it.

You said, in your original comment that, compared to unqualified firms, you had to charge higher fees because the ACCA made you jump through hoops.  I conceded that this was justifiable in areas where your qualification came into the equation, eg with auditing & IP work, but, stating the obvious, unregulated firms can never undercut you on this plus I very much doubt that the majority of this thread or discussion concerns such "regulated" work.

In other words, being an ACCA member is of no relevance when I, or my unregulated colleague,prepare accounts or tax returns and so, if the end result is the same, why should I charge more than my colleague?

At the end of the day, for those who wish to hang on to the higher fees for work that is no longer valuable, the problem of price differentials only occurs when attracting new clients, who are shopping around, or if you upset a client and they start Googling, so there's still time to make hay.

"Our experiences are clearly

norstar | | Permalink

"Our experiences are clearly different, I've spent far more time during my sentence working with unqualified (by letters) accountans than qualified ones and have always found that the quality of work as well as their relationship with others, be it clients or colleagues, depends on human rather than regulated attributes"

 

True. But surely not working for several years in order to obtain a full qualification is a human attribute that is more likely to result in a higher quality service? Would you not agree that if you took a population of 100 qualified accountants and 100 unqualified, the "human" factor that drove the 100 to obtain qualifications and subscribe to a professional oversight body is more likely to result in a higher proportion of the 100 as being "quality" and "competent", than the 100 who never bothered?

That said, you may well have come across a different situation. My comment about ACCA hoops still stands. We, partly as a result of our audit qualification I grant you, pay significant annual subscriptions. As an approved employer, we have to dedicate a certain amount of time to creating and operating systems that stand up to ACCA scrutiny which affects the amount of time we can produce billable work. This in turn generates higher fees. We have monitoring visits including "non audit" working paper files and if they are found wanting, we're in trouble, so we must devote a certain amount of time to checking accounts and creating supporting files - and so we should to protect the client interest and be able to respond to HMRC enquiries. Bodgit and Scarper Ltd down the road do not and therefore have less fee pressure. ACCA hoops do therefore, clearly add fee cost and pressure compared to non quals.

We will have to agree to disagree, however the article mentions a squeeze on fees and I have simply found that clients don't mind paying for what they see, but the work behind the scenes that a professional regulated firm must follow incurs a certain amount of time which clients are reluctant to pay for, and from the handover information I've had, it's obvious that more unqualified firms than qualified are skimping on this aspect to offer a cut price service, which puts pressure on fees.

Today I have taken on a client who was deeply shocked to find out that the "Accountant" he engaged was actually a book-keeper and unqualified. He now has no recourse to the awful service he's had and the guy has spent his tax refund on paying down his own loan! "Human factor" indeed! I'd be struck off!

AAT practices?? Really?    2 thanks

jelpiero | | Permalink

I'll be honest, it scares me that AAT practices are even legal.

 

I completed the final year of the AAT qualification prior to my ACA.  It really is a poor qualification at a very low standard.  To think businesses are being advised by people with this level of knowledge is astonishing.  

 

It is also frustrating that genuine chartered accountancy firms have to compete with fees of unregulated firms of this type.  On the other hand, I tend to find it is the type of business that joins you because of cheap fees that will also leave you if offered cheaper elsewhere.  

 

Successful businesses are focused more on the level of service and expertise rather than how cheap you are.

arthvirg230's picture

are you for real?    2 thanks

arthvirg230 | | Permalink

Is jelpiero for real?  AAT practices "scare you"

It's comments like these from people like you that put the whole profession in a bad light.  I know many so called "Chartered Accountants" and to be honest - they're clueless. Time you learnt something from the people that CAN do.

Unregulated accountants

jamiea4f | | Permalink

Some interesting comments here.  The truth of the matter (in my experience) is that price is the major decision factor for a lot of enquiries.  I always "up-sell" the fact that I have to be regulated (by CIMA) and insured for professional liability which I'm sure unqualified accountants will not have, if they do then I've been misled by my insurance company...  In my specialist area there is an accountant who does a great job of marketing to people in the industry, claiming to be CIMA qualified etc, and hiding behind a Limited Company, the result of which is that most people believe the "hype", whereas a simple check with CIMA would tell anyone that they are not a member, let alone a member in practice.  Whereas HMRC's Self Assessment system has many good points the fact that anyone can register as an agent and simply pay HMRC a fee to file as many tax returns as they can find is pretty awful and needs looking at.

With regards to the point about there being as many qualified bad apples as unqualified then there is a case here, one client I picked up last year had been using a qualified accountant with several hundred clients of his own for which it turned out he had been using several dubious/illegal practices to save them tax and had been found out by HMRC, to the extent that HMRC refused to accept any accounts that the accountant had prepared.  And yet many of his clients still hadn't moved to another accountant.  Which is a bit like continuing to reverse when your parking sensor is bleeping pleading with you to stop..

I'll repeat    1 thanks

jelpiero | | Permalink

I'll repeat... I've done my AAT ... yes they do scare me, its no more difficult than GCSE's.

 

I just don't think it should be allowed.  It's far too under-regulated IN MY OPINION.  All accountancy firms should have to follow the same regulatory requirements, inspected and maintained by the same bodies with the same levels of compliance work. It would be better for the profession, and mean all 'Accountancy firms' are operating on a level playing field.

frustratedwithhmrc's picture

That's quite funny...    3 thanks

frustratedwithhmrc | | Permalink

jelpiero wrote:
I'll be honest, it scares me that AAT practices are even legal.

AAT provides a good grounding for accounting professionals for personal taxation, self-employed and small businesses, so probably > 90% of all taxation needs of the UK high street. For these folks an AAT qualified professional is perfectly adequate.

Not sufficient for doing the accounts at BP, but it isn't aimed at that market sector.

My two juniors have AAT and they are very good at what they do, both of them are intent on becoming fully chartered at some point, but recognise that the most essential preparation is day-to-day experience.

It's accountancy, not the priesthood.

arthvirg230's picture

it's not just about qualifications you know!    2 thanks

arthvirg230 | | Permalink

Jeez.... it doesn't matter if you are qualified or not - it's about how well you do your job.

If you were using a bricklayer to build a wall would you use one that was Qualified with the Institute for Master Bricklayers - or one that comes highly recomended by the quality of their work but has no qualifications whatsoever.  I know who I would choose.  Take your blinkers off - this is 2013 not the 1950's.

I agree    1 thanks

jelpiero | | Permalink

I agree with everything you just said.

 

It is good grounding;

It is an excellent base knowledge for staff;

It does offer a good platform to move on to professional qualifications.

 

I do not argue that at all.  I am I great promoter of the AAT qualification as a base knowledge for staff, especially involved in accounts preparation and basic personal tax......

 

But that's exactly my point.....

Really?    1 thanks

jelpiero | | Permalink

Would you let a nurse conduct heart bypass surgery on you?

 

You are clearly neglecting the complexity of your 'profession'.

 

My gripe is more with the regulatory aspect that accompanies the lack of a professional qualification.

 

Gas safe plumber vs non gas safe plumber.  only one is allowed to fit a gas boiler.  both can be equally good at their job.  On is regulated, the other is not.

 

That is how the accountancy profession should be.

AAT    1 thanks

jamiea4f | | Permalink

As someone who has done (and taught people to do) AAT it is a good grounding for moving on to a professional qualification or for those who are happy to do accounts preparation/bookkeeping.  However I would never say that what has been learnt with AAT is equivalent to CIMA, ACCA etc - it's basically a (very good) low-level qualification and in my opinion is fine for preparing accounts, however no professional practice would let an AAT qualified member of staff send accounts (or self assessment returns) to HMRC or Companies House without them being checked.  

arthvirg230's picture

View from an AAT.....    3 thanks

arthvirg230 | | Permalink

I have been AAT qualified since 1994.  I am currently a partner in a firm of Chartered Accountants.  All this talk of an AAT not being of sufficient merit simply makes my blood boil.  I gain clients purely through referrals.  We do not advertise.  I pick up many clients from so called "Chartered Accountants" and to be honest the quality of the accounts and tax returns they produce is quite shocking.  It's highly embarassing sometimes explaining to clients the mistakes made by their so called previous accountants.   Sometimes we can rectify their mistakes but often the bad advice cannot be undone.  I charge a reasonable fee for providing good service.  Almost all my fees are now on a fixed price basis. none of this hourly rate rubbish. My clients are happy, HMRC seem happy as we have very few tax enquiries, I am happy.  When my fellow partners retire I will not be at all worried at losing the "Chartered" part of my firms name.  It counts for very little these days.  I think so much of this is jealousy?  These Chartereds spend years of their life studying to achieve their qualifications.  But in the real world you don't always need them....

Qualification or experience?    4 thanks

paula_t42 | | Permalink

I would also add to the debate that I have no formal qualifications in my field as primarily a personal tax practitioner although simple accounts are also part of my remit. What I DO offer is approaching 30 years of experience starting with the Inland Revenue (as it was then) and many years with firms of chartered accountants, before becoming self employed. I have sat in meetings with highly qualified accountants, and CIOT members, and been squirming with the wrong, misleading or simply not there advice given. Similarly I have been in meetings with those who are qualified the same and been highly impressed.  Whilst qualifications indicate a certain base of knowledge, and carry the requirement to demonstrate efforts are made to keep up to date, in isolation they no more demonstrate a fitness to practice than a lack of them indicates incompetence.

oh dear....    1 thanks

justsotax | | Permalink

'up-sell professional liability insurance'.....i suspect that is where you are going wrong....perhaps the unqualified down the road is 'up-selling' tax planning.....which would you choose.

 

I can only offer one piece of advice to 'qualifieds' who feel they are being squeezed by the QBEs - up sell what you can do for the client, how you can benefit them, over the guy down the road.....but don't suggest that the higher fees are to pay for your subs, cpd and insurance (that is assuming that of course the bookkeeping/payroll etc is all done by you and not a junior...because i presume that all of your employees are chartered?!?)

Happy Up North Accountant's picture

In defence of AAT    1 thanks

Happy Up North ... | | Permalink

I have met many chartered accountants who are amazing at what they do and provide a first class service to their clients.

I have met many chartered accountants who are rubbish at their job and have basically done the work to pass exams and then believe that they are arrogantly entitled to automatic well paid work after that even though they know NOTHING about some of the taxes that they then go on to give bad advice to.

One person I admire is Monsoon who posts on this forum and on the AAT forums. She has built up a successful accountancy practice in Wiltshire and as well as providing a top class service also provides employment to a few assistants too. She is AAT qualified. You cannot tell me that people like her are not competent to do general practice work both for individuals and limited companies.

The snobby and arrogant attitudes of people like Jelpiero are laughable. To become a licensed AAT MIP isn't anywhere near as simple as paying the yearly subs. You have to jump through a fair few hoops, some of which are listed here:

http://www.aat.org.uk/about-aat/mip-guidelines-and-regulations/mip/regul...

AAT Clients & diluted quality in ACCA

norstar | | Permalink

The only thing I will say on AAT, is that I have one or two clients that studied AAT, and they are absolutely CLUELESS. Honestly, can't even record a basic cashbook and yet they sailed through the qualification. With no disrespect to AAT qualifieds on here, it is not as demanding a qualification as ACCA etc. It may however provide a good basis to "kick on" and build experience.

 

However, having said that, I have felt for some time that the standard of the ACCA membership is being eroded by the rules being relaxed on the exams. I have a member of staff who sits one exam at a time, still fails and yet gets another chance. It really is too easy - I had to pass two banks of 3 exams at the end or die trying.

 

 

In my opinion, ACCA is doing this to boost their membership and then relying on the post qualification experience and practising certificate regime to weed out the less competent.

 

However it does mean that there are people sloshing through the exams who ten years ago, wouldn't have got half way. This can only add to the argument that qualified doesn't necessarily mean competent.

 

 

 

i passed my driving

justsotax | | Permalink

test first time....that must mean everyone else who took more than one go are dangerous and should be banned from driving...yep that makes total sense!?!?!?!?!

standards and price

The Black Knight | | Permalink

The only issue really is does a low price indicate a low standard?

If the client does not have a clue what they are buying other than an expensive adding up machine then they will buy the cheapest bookkeeper in town.

They will never know (unless they get investigated) how bad it is.

best one I have seen is bookkeeper (no accounts just slapped it on the return).

but lost £32,000 tax, because she and the client didn't know what they didn't know. They were both very experienced at what they did but had not read any books on tax.

I can only judge by my own experiences and I have come across (and recently) qualified firms that produce a poor quality of work (usually because they came from an industry background and decided they could do practice work, but don't really have a clue) BUT on the whole 99% of the work we see from non accountants and AAT practices is horribly inadequate.

The AAT used to be a good grounding so you had a certificate to improve your employment prospects within qualified firms. It was not a licence to take a little knowledge and pretend you knew enough to engage in public practice. The subject area (even for what the world sees as ought to be simple work) is very wide and very deep.

I expect we will see a rise in P.I. claims in future years.

 

 

Driving test

jelpiero | | Permalink

You arent allowed to drive a HGV though....

No

The Black Knight | | Permalink

justsotax wrote:

test first time....that must mean everyone else who took more than one go are dangerous and should be banned from driving...yep that makes total sense!?!?!?!?!

but they did eventually pass and probably knew the rules better than you just the same as those that have repeatedly read their study manual.

in the meantime a certain standard was attained which lowered the risk of them crashing into other motorists, dogs, and other inanimate objects causing damage  to property and personal injury and death.

are you advocating the abolition of the driving test (easy as it is) no one actually needs to pass it because you like me just jumped in a car, drove it and passed our test first time.

We both know we did not learn all we know now until many years later and that included learning (by reading and courses) and experience.

quite my point....

justsotax | | Permalink

simply passing a test or exam is meaningless without the experience....but as you quite rightly put someone taking the test several times probably knows more than me (but what happens if they still fail...does that mean they suddenly know nothing).

 

I used the driving test as an example just because previously i have seen some use the comparative between a doctor operating on you with an accountant.....which is quite ridiculous.

 

But sticking to driving....there are plenty of drivers i would far rather see off the road....passing tests means nothing without the appropiate use of experience along the way.  (and watching HGV drivers these days i wonder what type of test it is....) 

all standards

The Black Knight | | Permalink

It is true that you will see all standards of driving from those with a licence to kill.

Most car drivers have no road craft at all and are just an accident waiting to happen. Just proves the test is inadequate. I ride a bike too, to pass your test you need to be able to at least control the machine, even though it is a car driver pulling out that will kill you.

I am not in favour of over regulation by any means. In accountancy the general public are being duped and the worst that can happen is that they pay to much tax and or have penalties and interest. Unfortunately cheap accountants are very expensive.

My main gripe is that the cheap are cheap because they are no good and its the only way they can sell their service to the ill informed often engaging in evasion rather than minimisation. We get quite a lot of work after the damage has been done, but on the whole it only serves to lower the standards in accountancy generally and undervalue the good work we do, which I have seen steadily deteriorate over the past 25 years.

Even the cheapest fee is expensive for an attempt at adding up if that's what you thought you were buying.

Basically there is no point in paying for a service that you didn't get.

How about this for an example of advice from the unqualified (AAT) I heard recently?

accountant " your motor expenses are too low can you get me some more receipts from your garage"

client " no problem the local garage lets you write your own vouchers they just hand you a whole receipts pad, no charge, they are good like that"

"it's all legit that's what my accountant told me, I just do what I'm told and leave all that to him he just charges me a fee, which I don't think is very cheap, for adding up my stuff and putting it on the form"

client "HMRC did get all our tax wrong and we have paid too much and I have an awful time trying to explain to them and they have still got it wrong"

Hilarious really but you can't compete can you?

and I am sure    1 thanks

justsotax | | Permalink

i can come up with more than a few chartered accountants who have defrauded both their clients and the revenue.....and been jailed for it....i suspect they were a little more complex than trying to claim on a few extra receipts....but they did pass an exam so we should go easy on them...

Group norm behaviour then

The Black Knight | | Permalink

justsotax wrote:

i can come up with more than a few chartered accountants who have defrauded both their clients and the revenue.....and been jailed for it....i suspect they were a little more complex than trying to claim on a few extra receipts....but they did pass an exam so we should go easy on them...

That's OK then it's just group norm behaviour

Did someone go easy on them then?

Or was there some redress?

practice-perfect's picture

Fee pressure.....    2 thanks

practice-perfect | | Permalink

It's never about fees....it's about client service. That is my experience. Fixed fee agreements and monthly standing order payments up front have been the way to go for some time now. No fee disputes, no lock up problems and absolute clarity about what you are doing for the fee charged. Menu of services and windows of opportunity also ensure you are offering your clients. I wrote an article for Accounting Web a couple of years ago on Client service and what it really means (see the link on www.practice-perfect.net to see the full article). It still holds true...both from my days in practice and what clients tell me now at Practice Perfect- it is client service that is the key underlying driver and not pressure of fees per se. Finola@practice-perfect.net                                                                                                             

Qualified v unqualified    1 thanks

RU553LL | | Permalink

I worked in a couple of ACCA Practices, a couple of ICAEW Practices and an unqualified practice (and also my own practice which is ACCA).

One ACCA practice (i.e. not mine) the least said the better.

The unqualified practice, the standards there were very high. All jobs were properly monitored throughout the practice.Every job was reviewed by the same partner, to ensure consistency.

The ICAEW practice was also registered for audits. Every job type had its own 'pack' that had to be completed in full. Even if a lot of the pack had to be completed as N/A the paperwork still had to be on the file. 

My view is that there are good and bad unqualified accountants. If you find a good one, their charges are usually comparable to a qualified firm and the service is also comparable. However, the bad ones are usually book-keepers that think they can prepare accounts and the tax returns to go with them and I have seen balance sheets that do not balance etc.

However, I have also seen so called 'qualified' accountants who cannot complete a tax return properly as they have relied upon the software to get it right. These tend to be those who have worked in large firms/organisations and have specialised in certain areas and then can no longer remember how to do the basic work.

With this in mind I cannot see how the basic punter can choose the 'right' accountant let alone what the 'right' price is. 

 

 

Happy Up North Accountant's picture

Blob on I say!    1 thanks

Happy Up North ... | | Permalink

practice-perfect wrote:

It's never about fees....it's about client service. That is my experience. Fixed fee agreements and monthly standing order payments up front have been the way to go for some time now. No fee disputes, no lock up problems and absolute clarity about what you are doing for the fee charged. Menu of services and windows of opportunity also ensure you are offering your clients. I wrote an article for Accounting Web a couple of years ago on Client service and what it really means (see the link on www.practice-perfect.net to see the full article). It still holds true...both from my days in practice and what clients tell me now at Practice Perfect- it is client service that is the key underlying driver and not pressure of fees per se. Finola@practice-perfect.net                                                                                                             

I think this is about spot on.

Providing a top class service, regardless of qualification, is the heart of running a successful accountancy practice. I commend anyone who has become a chartered accountant but the ultimate test of creditability and competence comes from what you learn and do in practice and how you run your business. If you're incompetent but have fees so low it's silly you might win a lot of new clients initially but your overall client turnover will be high and your reputation low. Conversely if you're competent and highly priced you simply HAVE to accept that there are also other competent accountants out there who are cheaper. This is true with or without additional regulation. Adapt or die.

Paul Scholes's picture

Going for an account qualification is a choice not an obligation    1 thanks

Paul Scholes | | Permalink

norstar mentions above about all the hoops s/he has to jump through because s/he's regulated by the ACCA.  I did all that too and agree, regulators do monitor and lay down rules to follow and you have to comply with these, BUT with the unregulated work, all they are doing is forcing (or hoping to force) best practice.

This is chicken and egg, nobody forces you to sign up with a regulated body, you can jump though the same best practice hoops and be as, or even more, competent without it and, all the unregulated accountants I deal with do just that because it makes sense.

When I studied for my exams & qualifications there was something tangible at the end, I could not, for example, have completed a set of accounts for a Ltd company without the letters after my name. 

That is not now the case and a huge amount of the work that I used to do is now done by the most "unquaified" people....clients. Unless I wanted a life in auditing or insolvency practice, I would not now waste my time with exams   and, if I did, I'd hope that, as mentined above, I'd have the integrity to admit that, after a year, I shouldn't be allowed anywhere near a tax return.

Three for the price of one

theedges | | Permalink

I have one client that I receive work from monthly. He recently mentioned that he would like me to do quarterly so he didn't have to pay me monthy. I had reservations as if he couldn't pay me monthly, then how could he pay me quarterly? It turns out he wanted three months work for the price of one!

Incredible, bearing in mind this is a fairly wealthy person running a struggling limited company. I was totally taken aback, after all you don't go into a shop and pick up three items, then offer to pay for one.

Not a chance of me agreeing to this, I would rather lose the client.

 

Regulation

jelpiero | | Permalink

So do people not believe EVERY accountancy practice should be monitored and regulated by the same people and have to adhere to the same rules?

 

Or do people think it should be one rule for some, another rule for others?

Paul Scholes's picture

jelpiero

Paul Scholes | | Permalink

Obviously, for regulated work such as auditing, firms should be regulated and I suppose there is something to be said for having jsut one regulatory body, but then I think of the FSA and think again!

But for other stuff, like tax returns, accounts and making the client a tea or coffee no, firms should only be regulated if they want to be.  It may be an idea for young practices for example with no experience as they can be introduced to best practice but, in general, we are here to help clients comply with law & regulation, for which they don't actually need an accountant but chose to have one, so it's down to us, like any other business, to chose how we achieve this for them.

Disagree    1 thanks

jelpiero | | Permalink

As an ICAEW firm, even if we don't audit we have visits from the institute.  We have so many requirements to stick to, etc.  Failure to do so and we get struck off and fined.

Paul Scholes's picture

jelpiero are you related to nostar?

Paul Scholes | | Permalink

Even though I'm repeating repeating myself, the requirements that you have to stick to, for non-audit work, ie general practice are, presumably to ensure that you maintain "Best Practice" so are you saying that if you were not regulated by the ICAEW you'd drop them to make life easier?

It's your choice to be regulated and to get fired if you do not maintain best practice (although from my experience you'd have to be jailed before it happened).

How often to you get visited?  If it's too much, save yourself the grief & subscriptions and get out, it won't stop you doing accounts, tax returns, giving tax advice etc etc etc. and, unless you've told clients you'll only act for them whilst you have letters after your name, they won't give a monkeys.

Why only a £40k income for accountants?

blueskies | | Permalink

Given that I am having difficulty hiring a qualified accountant when offering £35k to £50k plus benefits I cannot see why myself, as owner of the business, taking all the risks, and very good at my job, should not earn more than an accountant employed by me.

 

Just a thought!

Paul Scholes's picture

Longer term

Paul Scholes | | Permalink

blueskies, I agree there is a degree of unfairness in this but that's capitalism for you.  You can have a moan on here about it but you're unlikely to get any sympathy from the prospective employees or your clients so, you'll have to grin & bear it, or think of an alternative.

Over the years I have earned less than some of the people I've employed but to a certain degree that was my choice in that I needed the expertise and wo/man power to get the work done, clients kept happy and to enable me to spend time in developing the business (or having a rest!).