Advisory v compliance: Picking your course
“Oh man, I’m public enemy number one,” said Chris Hooper with unexpected relish when he spoke to AccountingWEB recently. A self-styled accounting futurist, Hooper has a passion for technology. He has spent the past few years preparing his business for what he terms “the Accountapocalypse”, an epochal shift in the profession where most of the value chain is automated.
“Everything that can be quantified, will be quantified,” says Hooper. “And I fully expect the laggards – people who have waited too long to adopt technology – to go out of business.” The looming spectre of automation has given Hooper’s view more urgency.
While not as apocalyptic as Hooper’s rhetoric, the big talk at this year’s Practice Excellence Conference was on advisory services vs. compliance. It was repeatedly emphasised that accountants would have to pick a course and stick to it.
A term that cropped up repeatedly when discussing the dichotomy, often with a hint of derision, was ‘compliance factory’. One practice that could be considered a compliance factory is Maslins Chartered Accountants in Kent. “We don’t do a formal, chargeable, advisory work,” says Chris Maslin. “My personal view is that, at least at the micro end of the business world, people value advice but are only prepared to pay for the compliance.”
Maslin doesn’t veer one way or the other. He intends to work as an accountant for as long as the market allows. “Don’t know,” he says when asked about Maslins’ future. “I suppose I consider all modern businesses as fairly temporary. Make hay whilst the sun shines, be aware things won't always be the same, and be ready to change when things outside your control change.”
It’s a refreshing outlook in what has often been a contentious discussion. Maslins uses cloud technology, working only with FreeAgent. He doesn’t regret it despite the technology’s potential to make his services irrelevant. “I’m aware it’s just around the corner that the likes of FreeAgent will be able to submit statutory accounts/CT returns at the click of a couple of buttons. Whether at that stage we get a mass exodus of clients or not (why pay us £99 a month when they can do it all for £25?), I don’t know.”
Maslin compensates for being undercut by aiming for “slightly higher-earning contractors or freelancers”. “We should be fairly safe. Reason being, £99 a month often isn’t too much to them, and whilst they could DIY, they appreciate the fact of having us there, almost like an insurance policy.”
Maslin’s philosophy may be a breath of fresh air, but it won’t work for everyone. Not all, indeed most, practices are like Maslins. Stephen Paul at Valued Accountancy in Durham is intent on giving his firm more staying power. He’s not as c’est la vie as Maslin. His firm was named Xero practice of the year, and Paul says he has been shifting his offering toward advisory. “I’d say the ratio at the moment is a 45/55 split in favour of compliance – but I fully expect that to change.”
Valued Accountancy also recruits young, with a robust apprenticeship scheme right across the business. Paul has been very happy with the results, noting that these employees don’t come to the company with preconceived ideas and are much more receptive to change.
What are your plans for the future of your practice? Is it as black and white as it’s made out?