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Taking on the ceremonial role of ambassador for UK accountants, Richard Sergeant finds out from a US accountant whether Blighty number crunchers are as forward-thinking as they think they are.
Given the interesting times we live in, it’s perhaps a good time to take stock and have an opportunity to see "How others see us" – inspired by the recent radio series of the same name – to find out if seeing the UK profession through the eyes of peers from other countries sheds any light on where we are.
This week the USA, where Mike Platt, former president of Moore Stephens North America and Principal at publisher Inside Public Accounting (and of course was the founder of our sister title AccountingWEB.com), gives his impression from across the pond.
What this correspondent found fascinating from speaking with Platt was how the US sees us as exponents of change and at the forefront of technology, which might be at odds with how many view the profession.
But it does speak to the influence and growing grip of technology and how technology firms have exerted this over the years. And also how UK accountants are increasingly open-minded to how the world around us is changing too and the risks and rewards that this may entail.
What do most accountants in the US think of their counterparts in the UK?
To be honest, the rank and file of US accountancy practices don’t know anything about the UK, or even anyone else. Probably not even what’s on the other side of the US. Firms here generally only see what’s in front of them, and have a very narrow view of what’s going on.
And what of the political events? In particular, our relationship with Europe?
Those who are active through an international association or who have had dealings through clients who operate internationally will generally still adopt an ‘our way is the right way’ attitude. Whatever is happening elsewhere, it doesn’t matter if it is the UK or EU, or between the UK and EU, most firms will have an attitude that it doesn’t affect us too much.
How do you view the role of technology?
The ‘Future of the professions’ book made an impact, and the Suskind's have made a number of appearances over here and provided a prism to relook at how processing, efficiencies and producing tax returns is evolving. But from a general tech standpoint, there’s an awareness that social media and technology adoption in the UK (and Europe) is ahead of the States when it comes to new and innovative platforms and technology. Wholesale buying-in is coming only very slowly, and although you do get some firms pushing themselves into AI, they are the outliers.
Some of the smaller associations and firms are making strides when it comes to process automation and there is lots of activity in this part of the world, and they look to the UK for some of their inspiration. These smaller firms can get more immediate returns, and have less of the baggage. The larger firms will have lots of skunkworks, and will be trying to develop specific answers, as they all take a different approach to similar services”
Is this a positive or negative thing?
My impression is that the UK is more aware of tech influences and innovations, and willing to embrace quicker than their US counterparts. But sometimes this is taken to an extreme as they may change for the sake of change rather than commercial advantage. US firms are much more bottom line driven, where dollars define decisions. So I think we see UK accountants creating the impression of being ahead of the curve, but we’re wondering where the commercial payoff comes in.
What about the firm/client relationship?
The impression I have is that UK accountants have clients who are closer to them than in the US. In the UK an accountant can be viewed as a business leader’s number one adviser. Where the client will ask their accountant about the best way to go about extracting profits or general business advice, whereas here the first time the accountant will get to hear about the yacht is when he gets invited to go sailing.
How do you perceive services evolving, and the role of consulting in particular?
At every level firms are trying to figure out how to get out of the assurance and compliance side and focus on the consulting part. To be that most trusted adviser. But we’ve been hearing about how firm’s need to make this transition for 30 years or so, and the predictions still have not come true. There’s not a wholesale shift towards advisory in the US, and at most the leaders in this area are only generating 30% or so of their revenue, so it’s still a secondary service. And from what I know of the UK, things are much the same.
They really don’t know how to sell referral services or recurring income services. It’s a very different skill set, and the US is woefully inadequate to get there. Buying up technology and specialist services, buying talent and consulting companies in addition to other firms are how the larger firms are approaching this.
What do you think of the UK’s attitude towards change?
There’s definitely a greater willingness to kill sacred cows that have made them successful in the past. A good example is around attitudes towards how partners are best to own the firm and own the client relationships, around the key firm metrics, around hourly billing. The UK is a little quicker to change and adapt. The flip is that the end result may not be as strong but the willingness to consider these things is key. There is more interest in talking about change in the US now, but it’s slow to realise.
Is there anything in particular that has struck you about UK accountants recently?
One thing that did strike me recently was that it would seem that there is much more acceptance in the UK to develop new partners more quickly. There seems to be a conscious decision to bring the average age down, which I think surprises many over here. Especially as to whether or not they will have the level of maturity and experience needed. Some firms in the US are adopting mandatory retirement of equity ownership; so you can stay but you can’t own. Effect is to open up the opportunity to others, and there is still plenty of life in the older partners to work as consultants and business development, but the equity ownership is recirculated. But looking at how we bring other through the firm needs some work.
And do you think the challenges faced by firms in the UK are similar to that of US firms?
Everyone has the same challenges and issues, demographics, general business challenges and trends are similar. However, the technology and approach to change is a differentiator.
Next time we’ll look at Australia where we may have exported our financial systems years ago, but who now arguably provides us with the closest view of how things may develop in years to come.