Archive for the ‘Career development’ Category

I used the expression ‘Halfway house’ firms of accountants for the first time today when commenting on an internet forum. It seems sensible to explain my thinking in a short blog post.

I had in mind those mid tier firms that are largely all but indistinguishable – in the eyes of prospective clients. It’s a harsh truth that is perhaps best evidenced  by the promotional flyer about which I have written in recent blog posts. I also made a similar point when reviewing an innovative online video produced by another mid-tier firm.

It’s partly the difficulty in distinguishing themselves that will be the downfall of many mid-sized (half way house) firms. They struggle to win enough competitive pitches, to attract new clients and new partners with a following and to retain qualified staff. They are constantly fighting to become more efficient so as to reduce costs and maintain, let alone, improve profit per partner.  The recession has reinforced all of these challenges.

The only mid tier firms that will survive and thrive are those with clearly defined niches. By this I mean they are known for having an area of expertise that makes them really stand out from the pack. They recruit staff and partners specifically to bolster this expertise and they don’t waste time and money trying to be all things to all people. And these firms will only survive as regards those specialist areas. The more generic areas of their practices will shrink as partners retire or leave to go to smaller firms with lower overheads and potentially higher profits per partner. The smaller firms will often be less pressurised environments too – especially if they stick to clearly defined, promoted and valued niches.

Those mid-tier firms that have no such recognised niche expertise will face increased pressure from the egg-timer squeeze of both the largest firms and of the smaller more focused and cost-effective firms. The larger ones are perceived as having more credibility for the provision of a wider range of services – when these are needed and valued. The smaller ones are able to provide compliance, advisory and special services more cost effectively.

How many businesses really need to be served by halfway house firms of accountants?

I was recently asked my views on the benefits of being assertive rather than aggressive in getting a tax job and in your tax career.  Here’s what I said as is published in Taxation 2 magazine:

While we are used to seeing aggressive characters getting their way on the screen and maybe even in the office it’s not a good way to act during an interview. And it’s unlikely to be a successful tactic when negotiating a  pay rise or dealing with clients – even the most difficult ones.

I have long remembered the rationale for being assertive. It means you recognise that although the other person may have rights, so do you. When you act aggressively you deny the other person their rights.  And when you act submissively or non-assertively, you deny your own rights. If this is your default position then you would probably benefit from some assertiveness training. It’s hard to respect non-assertive interviewees or professional advisers.

Of course, this is easier said than done. Many of us have worked for an aggressive boss who we think revels in his ability to bully us. This may force us into a non-assertive stance. it will rarely enable us to get the best outcome.

I would add that many people confuse being assertive and being aggressive.  To reiterate the distinction above:

When you are assertive you recognise that you are entitled to information, clarification or a reply but that your entitlement is no greater (or less) than the other person’s entitlement to respect, politeness and honesty.

You are being submissive, passive or non-assertive if you remain silent when you ought to ask for help or explain your needs. This behaviour communicates a sense of inferiority. Typically it involves you thinking or acting as if others’ rights and needs are more important than your own. When you do this, other people may not be able to help you because you act as if there’s no problem. This approach will rarely serve you well in interviews, in the office or with clients. Much better that you should feel comfortable, and know that you have the right to ask for assistance or clarification when needed.

Many people confuse assertive behaviour with aggressive behaviour.  The latter typically comes across as bullying or disrespectful, implying that “my needs, wants, and rights come first.” When someone is acting in an aggressive manner, he or she doesn’t ask for assistance, but demands it.

Assertiveness is a skill. It’s not natural for everyone and can take practice to strike the right balance so that you do not come across as aggressive.  Being naturally assertive is a skill worth developing.

Years ago when I joined a new firm I remember an audit partner telling me about two tax managers in his team.  He preferred ‘Dana’ because she always knew the answers. He didn’t like ‘Sarah’ as much because she was less sure of the answers to questions he posed and often wanted to check with a tax partner.

I expressed the view that ‘Sarah’ was probably the better tax adviser as she was more cautious. ‘Dana’ was probably more dangerous as it was likely that she was overstating her real knowledge if she never needed to seek a second opinion.  I suggested that she was either naive or being deceitful. I suspected the latter. No decent tax adviser ever knows all the answers  – even after researching them alone. It’s  a sad consequence of our overly complex tax system that all too often we cannot give absolute advice as to tax consequences or accurately predict HMRC’s reaction to transactions.

The audit partner understood what I was saying and started to adopt a more open minded approach to the two tax managers. Within a few months he realised that ‘Dana’ had indeed been offering definitive advice that would come back to bite him and the firm at a  future date. He also had another colleague check back and offer a second opinion on earlier advice provided by Dana. As I had suspected Dana’s advice was often quite flaky and could have caused all sorts of problems in the future.   The partner started to rely more on Sarah and encouraged her to develop her approach so that it was more commercial.

The fact is that audit partners and general practitioners generally want their staff to be constructive and commercial. Being cautious is good upto a point but ultimately it is the partner who makes the decisions. If you are always overly cautious you may be seen to be uncommercial. So you need to develop confidence in your own knowledge and ability but this should not come from bravado.

It is generally the partners or the business owner who should decide on the level of risk they want to take when it comes to advising clients. Give them the information so that they can make such decisions.

Equally you should never present unresearched technical advice as if it were gospel. So, even if you have to advise in a hurry, qualify your advice if it is unchecked. At worst you will be given more time to research things. At best the person who runs the practice or the department can decide whether further research is required. Failure to do this may be naive and dangerous for the practice; The other possibilities are that you are a genius or are being deceitful which will rarely help your career ambitions in the long run.

It’s been a while since I referenced the key roles we tend to adopt in our firms. There are four essential such roles. Most firms need partners and team members with skills in each of these 4 areas.

• Finders – who go out and find the new work
• Minders – who look after the relationship with the clients
• Binders – who keep the team working well together
• Grinders – who do the work

It seems to me that most accountants focus on enhancing their technical knowledge and skills. Update courses tend to address such areas. Of course this is important. The focus though is simply on helping us to be effective or more effective in the ‘grinding’ role. What about all the others?

Sole practitioners will typically be good Grinders and Minders. If they have some staff they may need to be Binders too.

Those accountants who are looking to grow their practice need good ‘finding’ skills – perhaps in addition to the others.

What do you think about this analysis?

Last week Personnel Today reported that PwC is launching a new graduate assessment route with less reliance on degrees. In effect this is PwC stating that they will cease to be seeking only those with top degrees. About time too in my view.

Some years back when I was a partner at BDO I offered a cost-cutting suggestion that was roundly dismissed by the then powers that be. I had noted how much time and money was devoted to graduate recruitment. The aim then was to persuade top graduates to choose a career with BDO rather than one with the Big 5 or 6 firms (as they then were). This exercise was costly and often disappointing as applicants frequently chose to accept offers from the bigger firms over the offers they received from BDO.

I was conscious that many of the partners in the firm had only ever worked for BDO (Stoy Hayward as it then was).  It seemed to me that the graduate recruitment process was predicated on the idea that the best recruits would continue to want or could be persuaded to stay at the firm post qualification. And that all future partners would thus be home grown.

I offered the view that, “these days” the best people often chose to switch firms after they qualified. Those in smaller firms often wanted the experience of working for larger firms. Those in the (now) Big 4 want the experience of working for smaller but still ‘large’ firms. I also noted that as the firm grew so would it’s need to recruit expert partners who had trained and worked in other firms.

I suggested that we should focus our time and money on seeking to attract the best qualified accountants rather than the ‘best’ trainees.  This would reduce graduate recruitment costs and would free up resources to recruit potential partners of the future only after they had qualified.

But for the recession and the consequent reduction in job opportunities for newly qualified accountants I am sure that the pressure to move post qualification would be just as strong now as it was 12 years ago.

I applaud PwC’s move to widen its net although I sense from their press comment that the change is not as big as it seems. But it is a sign of the times.

I predict that the profession will reduce its intake of graduates into trainee positions in the coming years. Increased automation means that many compliance related services will no longer appeal to graduates (if they ever did). And audit work is largely drying up at the smaller end of the market. Most importantly, firms looking to reduce their costs will not want to engage new graduates to perform ever more basic tasks. These will increasingly be performed by non-graduates. In effect graduates will become too expensive to be accountancy trainees in the conventional sense.

What do you think?

Having just shared my views re CPD over on AccountingWeb I offer below an adapted summary and a few additional ideas and tips.

CPD of course stands for Continuing PROFESSIONAL Development.

To some (older?) people this is synonymous with attending courses. It’s what we always did. Historically I recall my obligation to the ICAEW was to evidence 150 points of CPD each year. Of these a large proportion had to be  ’structured CPD’ such as attending courses. These qualified for 3 points per hour. Reading technical updates only counted for 1 point per hour. As far back as I can recall I hit my 150 points target within the first few months of each year. I think that was more common with tax advisers than audit partners for some reason.

The ICAEW CPD rules changed a while ago to a much more sensible system in my view. Now there is a simpler obligation on each member to  judge what CPD is most appropriate for you, and how you intend to acquire that knowledge. (See: ICAEW What is CPD?).

ICAEW also point out that effective CPD can include:

• Technical reading
• Learning at work
• Meetings with experts
• Conferences
• Courses and seminars
• Online learning
• Workshops with your peers
• Reading magazines, newspapers and journals
• Registering for updates and email alerts

And PLEASE let’s remember that our Continuing Professional DEVELOPMENT means far more than simply being uptodate technically. What about personal skills, business skills, management skills – and so on?  These are equally important aren’t they?

Cost effectiveness is one of the keys, especially as we move into 2010. The big course providers try to keep the cost of places low by encouraging the use of annual tickets and large numbers in one central location.  One to one training can be far more productive and personal (which is what really counts) but is likely to be more costly although it will take less time. If you’re able to undertake good billable work for much of the time it can be a false economy to lose that billable time to take time out to attend a cheap big course miles from the office.

Everyone is different.

Some will benefit most by attending big generic courses and listening to a speaker whilst watching their powerpoint slides and then reading the notes afterwards. It is an approach that many of us are very comfortable with, it gives us a break from the office, perhaps we also get to chat with other delegates and to interact with the speaker.

It’s a little ironic for me as an organiser of training sessions for professionals and as a speaker at such events to admit this but there are many alternatives available now – including the online provision of almost identical course content to that which you might otherwise travel miles to hear live. An increasing number of providers are offering you the choice.  If this is of interest do please add a comment below this blog or send me a note and, if there is sufficient interest, I’ll look into it further as regards my own seminar materials.

Some people may absorb more information simply through reading relevant content online or in magazines, books or newsletters.  For example I’m sure that reading the Tax Advice Network’s weekly practical newsletters counts as CPD – although they don’t take very long to read given their practical focus for accountants in general practice.  Reading this blog and the posts on the TaxBuzz blog too should count as CPD – although this is less likely as regards my blog containing accountant jokes and fun!

What really matters is whether your PROFESSIONAL skills and knowledge are improved/developed in some way by the activities you undertake.

It’s also worth stating that attending a course doesn’t always count (if you’re honest). For example, if you leave the course thinking it was a waste of time and you’ve learned nothing new; in what way has your attendance contributed to your Continuing Professional DEVELOPMENT?

Please share your views as comments below if you care.

This is a first. It’s the first time I’ve had something to blog where I can see how it could fit on any or even all 3 of my blogs!

• It sounds like a riddle or joke – so would fit well on: Accountant jokes and fun
• It includes reference to tax planning – so would seem well suited to the TaxBuzz blog
• On reflection though, the rationale for the post is related to my advice and tips for ambitious accountants.

Earlier this week I was chatting with a nice guy who has been on a sabbatical since taking early retirement from a public sector role. He is now thinking about what he’s going to do next and is quite happy to accept that he may need to start networking once he secures a position.

I suggested this was to confuse networking* with selling. He would be much better off to start networking asap. Networking to build relationships. Networking to identify ways in which he can help other people. And Networking to build a deep and wide network of people who know him, like him and trust him. This cannot be done overnight.

It’s the same with inheritance tax planning. Ideally one would do this at least seven years before dying. I’m not suggesting that you need to start networking seven years before you hope to reap the benefits. Of course not. It’s just that seven years pre-death is the optimum time to start inheritance tax planning. Of course it’s not possible as you rarely know when that seven year period begins. Still, if you leave it too late your inheritance tax planning may be ineffective.

So, returning to Networking: If you want to achieve promotion and advancement within your firm you will generally increase your chances if you are well known and liked before your name is first mentioned as a potential partner.  If you are thinking of setting up your own practice, how much easier would it be if you were already well known  in the local community – by people who could become clients, recommend clients or help you source trusted suppliers? You get the picture.

If you leave it too late to start networking you could come across as desperate, needy and ill-prepared. In effect if you leave it too late your networking efforts will be ineffective – for a while at least.

* Relevant previous posts include:

• 10 top networking tips
• People do business with people they know, like and trust
• Why gaining advocates is important
• Networking for professionals
• Networking mistakes to avoid

Accountancy Age has published a profile piece on Peter Hargreaves (Chartered Accountant and founder of Hargreaves Lansdown).  In it he is quite scathing about certain elements of the profession. None more so than the smaller practitioner:

“They’re not doing a good enough job for clients, hence they can’t charge much for the work. A self-defeating spiral, where pressure on fees is rife from client and competitors.‘The problem is they can’t command the fees to do the job properly. The profession has failed singularly to create the right aura for the charging of fees. They’re different to lawyers, who tend to make good businessmen.”

“The problem is the mindset of accountants. They tend to be ‘mean’ with money, which makes them fear charging. ‘Because there are a few doing it for nearly nothing, the others feel they have to compete, but they’ll give you a bad service. A false economy.”

“Those who want accountants don’t know who’s good, and they try and pay very little.”

“Adding value is the key for practices, instead of just preparing accounts from a ‘bunch of invoices’, because ‘if that’s the service they’re offering they don’t service much for it – and if that’s what the client wants they don’t deserve a good accountant”.

“They should say to clients “we want to be in your offices every three months finding out what’s going on, where you make money, to help financially plan your business. If you make a big profit, should you do something before then, perhaps a marketing promotion and spend it this year while we’re profitable” etc. but of course lots of business don’t even know if they’ve made a profit until the accountants produce the accounts.”

Do you find that insulting or does any of what Peter says strike a chord? It’s pretty much the same sort of message as is offered (a little more gently perhaps) by organisations such as AVN, the 2020 group and Probiz. Please tell me what you think by way of comments on this blog.

I was asked for these when contributing to a business survey recently.

1 – Set up rules in your email management system to reduce the time absorbed by incoming emails.
2 – Book time in your diary for regular activities such as bookkeeping, invoicing, personal development, replying to emails etc. If client work has to be done in a slot reserved for key activities, move them to another date – in the same week.
3 – Set up a simple strategic plan with month by month activities to ensure you focus on working ON building your business beyond simply working IN the business. Then monitor and work that plan. (And reserve time in your diary to do this each month)

What else do you find works for you?

Having been asked to contribute some tips to a careers magazine I thought I’d replicate them on this blog too.

I have always remembered the first time that someone I was interviewing asked if they could make notes. Of course my reply was ‘yes’.  Indeed I was impressed that they were evidently prepared, had asked my permission and noted down only key facts. Their notebook also contained prompts for questions they asked of me later in the interview.  This took place 20 years ago. I still remember it because it was the first time. But looking back I don’t recall many other candidates for jobs doing the same thing and when I was in practice I must have interviewed dozens and dozens of people.

So that’s my top tip. Remember that an interview is quite distinct from sitting an exam. I explained this to a young family friend recently before she attended her first ever job interview. I explained that she wasn’t “cheating” if she needed to check her notes before asking a question. I also stressed that it can look very professional to make notes during an interview as long as you don’t lose too much eye contact. So only try to note down key points. You can always supplement the notes later.

Tip number two is something that I would do if I were ever again an interviewee. I would look up the interviewer on the web. I’d check the firm’s website, I’d look them up on Google and on LinkedIn. I’m assuming that you will have already checked out the firm or company online before applying for the job or when the interview is arranged. But these days you can go a step further and look up the interviewer too.

I always try to check people out online before I attend pre-planned meetings. I note down a couple of salient facts and may use these or refer directly to the online profile during the meeting.  This can help you prepare for the meeting as you may find a photo of the person, you’ll remove a little of the uncertainty and you’ll often pick up a couple of things that will help you in building rapport with your interviewer.  But you do have to be careful when you do this. Not everyone I meet is net savvy (and the same will be true of some interviewers). It’s all too easy to freak someone out by revealing how much information you have found out about them online. And that’s something to avoid doing during an interview (and indeed at any time). So be careful!