WOULD YOUR CLIENTS RECOMMEND YOU?

A survey of clients of US CPA firms by Bay Street Group has revealed a startling “expectation gap” between the public’s view of the satisfaction levels of clients and the firm’s view on the same subject.

Key data points in this “New Expectation Gap” include:

1. Client Satisfaction – CPA Firms grossly overestimate Client Satisfaction. Some 93% of CPAs believe half or most of their clients are sufficiently satisfied to recommend them. But only a bare majority of Clients (55%) would recommend their current CPA firm.

2. Identifying Decision Makers – The overwhelming number of Clients believe they – as CPAs, finance managers, executives, and individuals – are the “MAIN DECISION - MAKERS” in the hiring of new CPA firm. But most CPA Firms believe the owner is the key person. Only 17% estimated correctly that about half of their clients would be “Recommenders.” (Note: The trend holds true when all sizes of CPA Firms are compared against all sizes of Clients.)

3. Client Base Stability – 38% of CPAs say their average Client tenure is “more than 10 years,” but only 25% of Clients would agree.

4. Marketing Tactics - The top three marketing tactics which CPA Firms plan to launch or increase are:

-Increasing Referrals,

-Networking and

-Website Upgrades.

But if Clients were writing the marketing plans, they might agree with making Referrals and Networking top priorities, but they would add Seminars.

5. Criteria for Evaluating CPA Firm Performanc e – In choosing CPA Firm, Clients are most concerned about:

-Service and Attentiveness,

-the Reputation of the Firm and

-the Quality and Accuracy of the Work

What this experience of our fellow practitioners in the USA tells us is that we need to invest partner time in building close relationships with our clients to ensure the clients feel motivated to recommend us. Further details are set out below:

RECOMMENDER SCORE
Clients: Would you RECOMMEND your CPA firm to a friend?
Yes	55%
No	45%
CPAs: What Percentage of your clients would recommend your firm to a friend?
Nearly every client, or over 80%	35%
Most of them, or about 60% to 80%	42%
About half, or 40% to 60%	17%
Less than half, about 20% to 40%	05%
WHY CHANGE CPAs?
CLIENTS: WHY would you or your organization CHANGE CPA Firms?	CPAs: What's the reason you might LOSE A Client
(Respondents asked to check all that apply.)	(Respondents asked to check all that apply.)

Poor client services attentiveness	80%	34%
Need new or different service	20%	16%
Bad personal chemistry	29%	20%
Personal friendship with new CPA Firm	07%	15%
Price, fees, cost, budgets, “affordability”	57%	51%
Take the functions in-house	06%	11%
Not pro-active enough	35%	19%
Not getting CPA Firms	38%	09%
Professional/technical differences	07%	09%
We fire them for business reasons	na	17%
Die,sell or go out of business	na	43%
We are not really sure. We don’t ask. They don’t tell	na	15%
Others	11%	06%
na = Questions not asked of clients

The full copy of the Bay Street Report can be downloaded from our website by clicking here .

PRACTICE NEWS: Polish accountants plug UK skills gap. By Dan Martin

The UK 's financial services sector is increasingly turning to Polish accountants in response to a shortage of sufficiently skilled British staff, new research reveals.

Recruitment Company Joslin Rowe said of the 270,000 Poles who have registered to work in the UK since May 2004, 3,425 or 5.7% are accountants

The report added that in the 12 months to the end of August 2006, 32,150 new accountancy jobs were advertised in UK financial services firms. Poles secured around 3% of the vacancies, double the proportion during the previous year.

Tara Ricks, managing director of Joslin Rowe Associates, said due to a shortage of qualified home grown accountants, UK firms are exploring other options.

"The introduction of International Accounting Standards, an increasing burden of regulation, and a rising emphasis on corporate governance have boosted demand dramatically and pushed salaries up accordingly," she said.

"We simply don't have enough home grown accountants to fill the void and this is creating opportunities for those from overseas.

"Polish accountants are still a relatively new phenomenon. Among employers, early adopters have already started hiring them enthusiastically, but it takes time for a new group to establish itself.

"We have seen this before with successive waves from the Anglosphere -initially Australians, then New Zealanders and most recently South Africans. After a slow start, these groups are now in high demand."

Joslin Rowe found that a similar pattern has developed in the Republic of Ireland . New Polish accountants registering in the country over the past 12 months rose 190% compared to the previous year, it said.

AccountingWEB   6-Oct-2006  

Categories:   Practice Management  

Investment in instalment warrants by superannuation funds

The Minister for Revenue and Assistant Treasurer, Peter Dutton, has announced that the Government will act to allow superannuation funds to continue to invest in instalment warrants, consistent with longstanding administrative practice.

Instalment warrants have been marketed over a number of years to superannuation funds, particularly to self managed superannuation funds (SMSFs).  The Commissioner of Taxation and the Australian Prudential Regulation Authority have now concluded that these products entail a borrowing for the purposes of s.67 of the Superannuation Industry (Supervision) Act 1993 (SIS Act) and are therefore not an allowable investment

The Minister said "While the Regulators have concluded that investment in instalment warrants by superannuation funds is not in keeping with the SIS Act, the practice is long standing and widespread and superannuation fund investment comprises a significant proportion of the instalment warrant market.  The Government will legislate to allow longstanding practice to continue, following consultation with industry regarding the precise scope of amendments to the SIS Act".

Pending the law change, superannuation funds investing in traditional instalment warrants will not be considered to be non-complying under the SIS Act merely because of their investments in those products.

Fund investment in instalment warrants must still comply with other superannuation rules (eg they must not result in fund assets being subject to a charge).  Trustees are still required to demonstrate the appropriateness of including instalment warrants in their investment strategy.

Improved checklists

Please note that we have updated our checklists for entity and SMSF work to reflect some further experiences from dealing with the many firms using our service.

Please ensure when sending work that you download the most recent checklists from the “checklists” page on our website.

Succession Issues

Many readers may have heard that Count Financial, the listed financial advisory dealer group is looking to acquire minority interests in accounting practices ahead of an entire acquisition prior to a listing of an accounting practice.

Succession planning in the era of generation Y, a group that don’t stay in a job for more than 2 years in many cases, is a real issue facing most professions.

In the medical profession, skill shortages and succession issues have made many sole medical practices find corporatisation to be the most appropriate succession plan. The independent practitioner network ("IPN")and PHC have found a number of doctors willing to sell their practise into corporate model. IPN is a subsidiary of Sonic Healthcare.

All of this tells us that the professions, including accounting, are undergoing change and that opportunities to profit from such change exist.