Beyond the balance sheet

Is it time to shift your accountancy services away from the top 20?

Kathleen Parker 13/9/2021 8 minute read

Kathleen Parker FCCA, explains why moving from the top 20 to a regional firm could be of real benefit to your SME.

We live in an era of big brands!

Chances are you own an Apple product, wear some form of Nike or Adidas sportswear, and recently purchased something through Amazon. These incredibly successful brands aren't the cheapest, they're rarely the first to market, and often you can purchase like-for-like elsewhere quite easily. However, we still go back to them. Why?

Their reputation is based on, not just what they create and deliver, but what they do for you and how they make you feel. It's the impact on our lives and the satisfaction this derives that keeps us purchasing more. Could the same be true for accountancy services?

Does your SME business really benefit more from services that are provided by the top firms?

When did you last do a check to see if you're obtaining value for the money you invest in a national, top 20 professional service?

In this post we'll explain why the big brand answer to our question doesn't necessarily hold true and what you should look for in obtaining professional advice elsewhere.

Affordable accounting services focused on helping you grow! Schedule your  appointment today >

The challenges of being an SME client of a top 20 firm

Having a big brand put together and sign off your accounts is a matter of kudos. It looks impressive and could be interpreted as a sign of success. After all, how many growing businesses are successful enough to be able to afford such a service. Their name on your accounts is seen as a sign of quality given their market share.

However, appearances can be deceptive. These firms are vast, and some are international in scope, which means that as a SME, you're likely to form a very small fraction of their fee base. The reality of this is you're unlikely to be a priority client, and probably won't receive the kind of time and attention you feel your business deserves.

Instead, you'll likely have recently qualified, or possibly, unqualified staff assigned to your account because this represents less cost. In recent years many of the bigger players have tried to badge this up through cloud, or online accounting. An alternative could be that the processing for your online accounting services is outsourced to a far-flung location overseas in the name of cost efficiencies.

Given this insight it may be time to review what services you receive, how much you're paying for them, and the level of advice your firm provides you.

The advantages of moving to a smaller, regional firm

Whilst the top 20 have a big reputation and clear name recognition, the reality is you can get the same, if not much better, level of skills and personal service by shifting to a regional SME specialist firm. Furthermore, the chances are this will also be at substantially lower fees as well.

1. Knowing the team looking after you

If you shift to a smaller, regional firm then the likelihood is your SME will get their full attention. The opposite is probably the case amongst the bigger brands. After all they look after a vast number of clients meaning their priorities and time will be focussed on the listed, big corporates they represent.

Your SME business will generate a small proportion of their total fees which means you won't be so high on their priority list. Essentially regional firms invest in the relationship with their clients to build trust and help you (their client) grow through the services they provide to you.

A big part of that relationship with you will be establishing a team on your account that you communicate with regularly. You'll likely have a clear understanding of who does what, and when. Contrast this to the top 20 who may have large sized teams potentially comprising of individuals in different departments. Consequently, it can be difficult to ascertain who is responsible for the tasks in question.

As an example, Wellers don't work through different departments. This means client teams can be efficient at delivering advice across a breadth of areas and high-level knowledge of the client's operations isn't lost in the transfer of tasks between departments, as at larger firms.  Instead, work is conducted in a manner whereby we are always looking to spot potential opportunities.

Then there is also the matter that most of the work is conducted below Manager level. Given all the layers in these big firms, responsiveness and decision making can be quite slow. They're not as agile as regional firms where the partners tend to be more involved in the management of clients' businesses on a day-to-day basis. SME clients tend to like partner involvement as it means they can be in touch with senior personnel who most likely was responsible for signing them up from day 1.   

2. A settled team supporting your business

For employees working at a top 20 firm, there are enormous pressures. They face long hours, lack of flexibility, and plenty of stress to scale the corporate ladder. Many end up leaving for a more flexible career. This means employee turnover is greater than at regional firms, so you'll probably have greater continuity on your team when you look outside the big brands.

The top 20 also have greater challenges in terms of managing their resource. Given they have so many layers and structures, clients can see brand new teams on their accounts from one year to the next. Being more malleable, regional firms can better anticipate staffing needs and resource requirements.

3. Service delivery

Bigger firms tend to be quite transactional in how they approach their work and relationships with clients. A case of delivering the service on time and efficiently. A regional firm such as Wellers, however, usually starts with a relationship first approach.

Take an audit for example, our approach to such work would be one based on regular communication where it's needed, particularly if issues arising are identified, but also being sensitive to you Finance team's day-to-day work and not being unnecessarily disruptive.

Remember, your SME will likely be of greater priority to a regional firm. This means that whilst they will complete the work accurately, timely, and efficiently, they will also communicate with you regularly. This is so that you understand what has been done, why, and the impact on your business in terms of contributing to your goals and strategic objectives.

For a regional firm, helping you achieve growth is how they in turn grow their own business. At Wellers, our business is all about helping yours.

4. Fees

Not only are you likely to have a closer relationship with a regional firm, their fees are also likely to be significantly less. Greater size and costs mean clients of the top 20 usually pay a 24/7 retainer fee for the services rendered.

Regional firms however, bill by the hour meaning they only charge you for the work done. Furthermore, they're more flexible meaning they can tailor the billing model and how payment is made to your specific needs.  

5. A network of advisors and clients

The Big 4 will cite their size and therefore ability to service all your needs as your business scales and expands. However, it would be foolhardy to think that regional firms can't help you in multiple ways as you grow.

As an example, Wellers has many great relationships with our own clients as well as a range of advisors, IFAs, lawyers, banks, and surveyors across multiple locations. This means we have an active referral network and are well placed to connect you with other professionals as and when the need arises with expansion.

How to move accountant, shifting away from the top 20:

If you would like to switch accountants, away from the Big 4, then these are the steps you'll need to take to make it happen:

1. The termination letter

Firstly, you'll need to write a letter of termination. This advises your current accountant that you intend to move to a new firm. You'll need to assess and then state in the letter what, if any, final work needs to be completed. The letter must also specify that the incumbent provides all information requested by your new accountant.

2. Registering with a new accountant

Your new accountant will send a form for you to complete your registration with them which will include your personal, as well as business information. As part of this process, they will conduct anti-money laundering checks on you, so you will have to provide a scan of your passport, or driving license, as well as a recent utility bill.

3. Sign a new 64-8 form

By signing a new 64-8 form you will authorise the new advisor to deal with HMRC for your personal and company tax affairs. Alternatively, you can use HMRC’s online authorisation service to complete this step of the handing over process.

4. Read through the Letter of Engagement

Be sure to check that with any accountancy firm that you engage with, they're a member of a recognised professional body, such as the ICAEW. In this case, they are obliged to send through a ‘Letter of Engagement’. Make sure to read through it carefully as it sets out the expectations and requirements between you and them.

5. Letter requesting Professional Clearance

Your new accountant will write to your previous one requesting what is known as professional clearance. This explains to them that you have contacted the new accountant to represent you, and if there are any professional reasons as to why they should not accept the appointment.

The letter requesting documents from the previous accountant will include a request for any copies of accounts, tax records, tax returns and any other information they may need.

Just a few weeks later, all your accounting information should have been safely transferred to your new advisor. If there is any outstanding work to be completed to bring your accounts up to date, you may have to negotiate this fee with your new firm. 

Shift your accountancy services away from the top 20.

This post was created on 13/09/2021.

Please be aware that information provided by this blog is subject to regular legal and regulatory change. We recommend that you do not take any information held within our website or guides (eBooks) as a definitive guide to the law on the relevant matter being discussed. We suggest your course of action should be to seek legal or professional advice where necessary rather than relying on the content supplied by the author(s) of this blog.



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