As the relationship between an accountant and their client grows, the lines of responsibility, how to price the service and the position itself blurs. AccountingWEB member Matrix recently discussed on Any Answers how their “hands on” relationship with a successful client has now evolved to the point where they are considering taking a part time FD/FC position within the company.
Matrix received an offer to move in-house and serve in an FD capacity with the company on a one-day-a-week basis while maintaining their practice on the other days. Thanks to the growth of the client’s company they need an accountant to oversee the global accounting and taxes of their overseas subsidiary.
However, other issues complicate this move such as ensuring the position doesn't impact Matrix’s other work and having a clear scope of the required work and how to price it.
While a part-time FD role provides regular income with other options and a change of pace, is there a price to pay for a practitioner for moving in-house?
The in-house FD: A difficult dance
Matrix’s FD conundrum was met with caution from fellow practitioners. Addressing the relevant issues and approaches to the role, the AccountingWEB community chewed over the pros and cons from their own experiences.
According to Kent Accountant, something has to give. “It does impact on all of your other work - the client will see you as an employee and will expect you to respond/work on non-designated days.”
The result of this new arrangement, Kent said, will add strain to your practice. While the opportunity to move in-house may sound financially appealing, Kent warned that the position may not only require extra hours but the need to recruit extra staff or outsource some client work to maintain the practice.
Furthermore, the day-to-day duties of being an employee can eat up a considerable amount of time. AccountingWEB regular and full-time finance director Tom 123 supported this, saying that the non-accountancy tasks tended to cover almost his whole job.
How to walk the line
So how can this relationship work? “The most successful appointments I had were when it was to do a specific task like a refinance or to manage an acquisition. You had a clear scope of work, an end date and a day rate agreed”, wrote AccountingWEB member Glennzy, who built his practice on similar FD work.
Both Glennzy and Kent Accountant agree that a day rate is the correct route to go as it is easier to define where and when you are working. As an example, Kent’s standard day rate for FD work is £650.
However, even this comes with added caveats: “If they are paying you a day rate they will try and dump extra onto you so they get value for what they will see as a large cost to their business,” said Glennzy. “It’s important to say no sometimes, otherwise you can [get] dragged into legal, HR and operational matters.”
That’s not to say the role won’t work, as AccountingWEB member Bernard Michael commented, but unless you can clearly agree on the parameters of the job and stick to them it, the role will outgrow the available time. In Michael's experience he advised the client to hire full-time FD.
Trusted advisor
As a CIMA MiP, Alan Hemingway of QuickBooks firm of the future, Hemingway Bailey, has experienced both sides of the fence. He tells AccountingWEB that for him the decision depends on what you really want to do. “If you want to act as a trusted adviser to your clients, a virtual FD role is a natural extension to this,” said Hemingway.
“If you do this you will need to put ground rules in place to make sure you do not depart from what you agreed initially the role would entail, so you do not take too heavy a workload on,” he said.
“Following through with the trusted advisor approach, you can have the arrangement that you are there to advise on a number of days and they tap into your knowledge and experience. As an FD you are not just there to generate numbers but to advise on the running and direction of the business.
“If you do not want to take the trusted adviser role, you are in danger of just becoming a figures generator and the client is probably not going to be getting the best out of you.
“Whichever view you take on this,” summed up Hemingway, “you have to be careful about independence since you could well be preparing the figures and also the accounts, the more you can separate this with someone else being involved, the better.”
Have you been put in a similar position to Matrix? Did you choose to move in-house or stay well away? And if you did move in-house how did it work out?