Mark Lee shares lessons drawn from interviewing three new accountants for a new appointment and how the choice was eventually made.
At the start of this century I had my first experience of sitting on the other side of the table. I had recently been appointed deputy treasurer of a large charity and we put the audit out to tender, as we have done twice since.
Being part of a bid process as a client or prospective client in such circumstances has always been a very revealing experience. For example:
- Firms talked about how they operated as a team and yet the body language and behaviour of those at the meeting often suggested otherwise
- More effort had evidently gone into the written bids than in preparing for the face to face meetings. This was a mistake.
- Little effort had been made to clarify who were the real decision makers and whose opinion would be less important.
Much more recently I was the principal decision maker involved in replacing the accountants for a members’ club. I have shared the related story of why I sacked a top 20 firm on my blog. Now I can share the challenges of choosing their successors.
I sent emails to my contacts at three top 40 firms setting out the relevant background information, copies of last year’s accounts and the work required.
The responses confirmed that they were each keen to be appointed despite the annual fees being less than £10,000 and thus low for the size of firms I had approached. I invited them to nominate a suitable person to liaise with me.
In each case the nominated partner then called me to seek further information, after which they submitted their proposals.
All three firms said pretty much the same things in different ways. They all claimed to offer a single point of contact, relevant expertise, a London office (the club is in London), their ability to meet our reporting deadline and the proportion of their firm’s fees that derive from the ‘Not For Profit’ sector (which varied from 10% to 40%).
The differences that stood out for me at the time were:
- One firm offering a free VAT review in the first year
- The different lengths of time that the partners had been with their firms
- One firm referencing a new client alongside old ones without making clear that they’d not yet worked on the new one
- One firm’s email referencing the fees element of the bid as being for a different prospective client. (There was another typo in the final line of the email too)
- One firm referenced the name of our bookkeeper in the email suggesting that it wasn’t simply a cut and paste job of a standard bid layout.
The fee quotes
There were very different and it was clear that all 3 firms had made different assumptions. I don’t know why none of them had called or emailed me to seek clarification before finalising their fee quotes for different elements of the work. The lowest fee quote was £3,625. The highest was almost double this but still 40% lower than the fees we paid the previous year.
I arranged for the three firms to come to meet myself and the bookkeeper on a Monday afternoon (at 3, 4 and 5pm). We spent around 45 minutes with each of them. Our questions included asking about the average fee size of their portfolios and to explain what happened the last time something went wrong with a comparable client.
When we went through our notes afterwards and discussed the three meetings we genuinely felt that everyone passed. No one messed up. No one stood out as having failed or done anything wrong. Of course there were differences of style and approach but nothing of such materiality as to really impact the choice I had to make. This made the final decision exceptionally hard.
During the meetings I had checked the assumptions they had each made re the work to be done. Two of the firms then sent me revised quotes the next morning. There was now no longer a big difference between the three quotes and all three were now offering the free initial VAT review.
In my emails to the two firms who didn’t win I apologised that I was unable to explain clearly why this was the case. I recall from my own days in practice how frustrating it is when the prospective client says it was really close and they cannot explain why you came second. That's where I found myself on this occasion. It was almost the toss of a coin.
Except it wasn’t. I eventually realised that I had to allow the deciding factor to be that indefinable element of personal chemistry. Once I did this the outcome was obvious. I was then able to justify my decision by reference to differences that I didn’t really feel were important. But they were sufficient to legitimise the choice. For example, the firm I chose:
- Was the only one where partner and manager both attended the meeting
- Had supplied printed copies of specialist materials to evidence their assurance that they produce these and the quality thereof
- Is the best known of the three firms – though whether this would ever be relevant I am unsure.
If I was still in practice I would have learned a great deal from my experience of being the decision maker in this process. There isn’t space to share all of the lessons in this article. So if you want to know more, by all means ask questions using the comments facility below.
Mark Lee FCA is consultant practice editor of AccountingWEB and a speaker at conferences and in-house events, helping accountants who want to build more successful practices. He also facilitates The Inner Circle group for accountants and is chairman of the Tax Advice Network of independent tax specialists who provide support to smaller practices.
About Mark Lee
These days Mark Lee focuses his business actiities on two key activities:
1 - He loves being engaged to speak on stage to audiences of accountants in all size of firms. His latest keynopte talk is: The rise of Robo-Accountants - and how to beat them. He is an accountancy focused speaker, futurist and influencer with a positive reputation for entertaining, engaging and enthusing his audiences.
2 - He loves supporting savvy sole practitioners who want more out of their practice. More clients, more money, more time, more satisfaction - or everything!
An accountant by profession, Mark moved away from the provision of professional advice in 2006. He is now a professional speaker, mentor, author and debunker.
Mark is passionate about helping accountants generally so is a keen blogger and commentator in the accounting and tax press. He has been consultant practice editor of AccountingWEB and has written hudnreds of articles here that have been viewed over a million times.
Check out how he could help you here: www.BookMarkLee.co.uk/savvy
Mark no longer gives tax advice despite being a past Chairman of the Chartered Accountants’ Tax Faculty. He is however Chairman of the Tax Advice Network - the UK's highest ranked lead generation website for tax advisers and accountants. The network also publishes a weekly practical tax update for accountants in general practice and full tax support, on demand too. You can also use it as a lead generation resource for local people seeking tax advice from an accountant.