How can professional advisers encourage their SME clients to innovate and grow? RandDTax and Pay Check brought 11 of the North West’s leading finance professionals and SME CEOs together to answer this question – and explore how external specialist partners can help
Growth is good, but it comes with challenges. Just ask Martyn Gould, CEO and Co-founder of Huddersfield-based tech start-up yboo and a participant at an exclusive RandDTax and Pay Check round table, held at the Midland Hotel in Manchester in September.
“The number one problem we face is getting the infrastructure in place to help us grow, whether it’s finance, professional services, marketing partners, compliance experts or people who can help with R&D tax credit claims,” Martyn told fellow round table participants. His biggest frustration is having to invest time in educating this network of advisers about yboo – time he would rather be spending bringing in new business.
Despite this, the company, which has developed the world’s first app offering mobile phone users personalised network recommendations based on price and signal strength, is growing fast. The app has already been downloaded 100,000 times in the two years since launch. Now, Martyn is looking to his network of advisers to challenge him to take his business to the next stage of growth.
Putting the right adviser infrastructure in place to drive innovation and growth is a major challenge facing SMEs, participants heard.
How can advisers, and particularly those offering accountancy and finance director (FD) services, help businesses like Martyn’s to innovate and grow? Participants identified four top tips:
Be a trusted one stop shop
Leyton Jeffs, Senior Partner of Funding Solutions at Sedulo, told participants that SMEs are looking for one trusted adviser that knows their business well and offers the full suite of services. “This is where advisory is going,” he added. While advisers that became a one stop shop ran the risk of being a ‘jack of all trades’, Jeffs warned against subcontracting to third parties who would be one step removed from the client’s business.
Murray Patt, Director of Hale-based accountancy firm Alexander Knight & Co, agreed with the concept of a trusted adviser, but suggested that, as a result, accountants could additionally play a coordinating role by identifying the right mix of professional external advisers for their client and bringing them together to work as a team. The key was to be a reliable, single point of contact.
Linda Eziquiel, Regional Director of round table co-host RandDTax, pointed out that such external specialist providers were perfectly placed to challenge SMEs to move to the next stage of growth, thanks to their in-depth knowledge of one particular area. Eziquiel has personally helped more than 100 companies make successful R&D tax credit claims, providing funds for clients to invest in innovation and growth activities. “If you’re doing it all the time, the boundaries are clear to you and you know how far you can challenge clients to go,” she told participants. “You’re well placed to make a judgement call on the viability if different elements of a claim.”
Seek support from external partners
Working with external specialist providers is a model that works well for Sam Kellali, founder of yourFD. He is a one-man band offering FD services to SME clients via a network of partners specialising in a range of services, including payroll, tax and wealth management. As with any business, he told participants, you play to your strengths and recruit or outsource for the rest. “I’m upfront with clients about this but they also know that their trust lies in me; I’m the focal point for all of the services yourFD offers.”
External specialist providers are perfectly placed to challenge SMEs to grow, says Linda Eziquiel, right.
Valerie Wood, a partner at DPC Accountants, is also an advocate of working with external specialist partners when the need arises. Her business has worked with RandDTax for many years. DPC Accountants had offered this service in-house but brought in the experts when the know-how required exceeded DPC’s own. The firm also has joint ventures with providers of financial advice and capital allowances claims services.
Kellali and Wood stressed that trust was the number one factor in the success of such relationships and that allowances needed to be made for time to build that trust. Without it, client relationships and reputations could be at risk.
Katie Linstead is Head of Business Development and Marketing at round table co-host Pay Check, the specialist provider of payroll services to SMEs. Accountancy firms often turn to Pay Check to provide those services to their clients. In that scenario, it’s important to establish what each party is bringing to the table at the outset of the relationship, Linstead told participants, adding: “You need to keep refreshing the relationship and making sure that you both still have the same understanding of the client’s needs and then you can probably get to a point of trust faster.”
Finance professionals around the table who had experience of outsourcing specialist services said getting the outsourcing relationship right had freed up time to allow them to focus on high-value advisory work.
Be passionate about your client’s business
For Patt, the key to providing advisory services that deliver growth is to have a genuine passion for what a client’s business does. Advisers can achieve that by identifying what their own passion is first – life-changing technology or ethical business, for example – and selecting clients accordingly. That shared passion can help advisers to become more engaged in their clients’ businesses beyond purely transactional services, helping them to ask growth-related questions.
Jeffs suggested that that passion could be developed over time by engaging with the client on a regular basis – monthly, weekly or even daily – to really get to know the company. “Running a business isn’t really a logical thing,” he told participants. “Quite often, the business owner feels much more emotional than the adviser does and so it’s important for the adviser to be really intrinsic to the business and have a passion for it. If you achieve that, you’ll give those businesses 100%.”
However, ongoing engagement with clients is a major challenge for accountancy firms – particularly smaller firms – that need to maximise their billable time. “Unless you’re offering regular bookkeeping or payroll services and you have a reason to be in contact with them on a regular basis, SME clients don’t often see the value of paying for extra advisory services,” Claire Flinders, founder of Blaby Accounting, which has a six-strong team, told participants.
Larger accountants may be in a better position to invest in advising SME clients and lose money in the first few years of a relationship in the hope that they will recoup their investment down the line when the SME grows and requires higher value services. But that’s a difficult call to make for smaller practices that need to justify their costs.
Having to invest time in educating advisers is a big frustration, says Martyn Gould, left.
One solution could be to use technology platforms that digitise transactional tasks, freeing up time to focus on advisory services that drive growth. Embracing that technology may be easier said than done, however.
“Accountancy is a very traditional area with set rules and structures that have been around for a long time,” Stuart Hurst, Director of Cloud Accounting for UHY Hacker Young’s Manchester office, said. “I’ve been involved in trying to change that and it’s very painful.”
Stuart’s biggest challenge has been persuading older partners in his firm to embrace technology. Their reluctance is often tied up with fear of change and fear of upsetting longstanding client relationships by introducing new systems and processes. But advisory firms that fail to embrace technology are missing out on the opportunity to grow their own practices by freeing up more team members to focus on offering higher-value advisory services.
“Technology is enabling a revolution in accountancy that is going to allow accountants to use freed up time to spend understanding a client’s business and talking about the future and where it goes,” Jeffs told participants.
Advisers that fail to take advantage of that opportunity will probably not be as profitable, efficient and good as they could be in five to 10 years’ time, Patt warned. External specialist partners have a key role to play in helping advisers to make this transition by becoming a seamless extension of their team and bringing valuable additional expertise to the table.
Linda Eziquiel, Regional Director