The role of advisory within accountancy
The role of an accountant has been transitioning from its traditional offering recently, with advisory services becoming an integral part of its makeup
The days of an accountant reserved for bookkeeping are over, with the profession pivoting towards a more holistic business advisory role, according to Daniel Montgomery, senior manager at Haines Watts.
Businesses endured a turbulent time during the pandemic and are still feeling the effects, “forcing” accountants to provide valuable guidance to help weather the storm, Montgomery says.
“We had to adapt to become better advisors to keep our client base in business, which kept ourselves in business.”
Providing cash flow projections to their client’s lenders was a pivotal factor in keeping companies afloat during the Covid-19 lockdown. It illustrated to lenders how they were going to recover post-pandemic.
Andrew Konieczko, head of brand and communications at PKF, believes clients look to their trusted advisors during periods of uncertainty, making the pandemic and the economic situation the UK is in now, a very important time for accountants.
When looking at potential employees in 2022, accountancy firms will “look at a candidate and think, will this person be able to create rapport with clients,” says Konieczko.
Montgomery agrees, claiming clients most value accountants they can trust and develop a relationship, as long as they are “competent” at their more traditional accounting duties.
Moreover, this evolving role means companies should count on their accountants to issue trusted advice on matters like budget preparation, regulatory changes, increased digitalisation, and more.
Regulatory changes
Technological advancements have assisted accountants with their traditional duties. This presents an opportunity to expand their offerings, delivering personalised information to their clients on the most efficient route to deal with the challenges of today’s regulatory changes.
UK government initiative to simplify the tax system, such as Making Tax Digital (MTD), could drive an older generation of business owners to sell up because of the continuous “admin hustle”, providing an opportunity for advisors to assist them through this arduous process, Montgomery says.
Many owners could be left with little time to run their actual businesses. Haines Watts centres its advice on putting systems in place and leveraging technology to make the burden of admin as straightforward as possible for its clients.
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Increase in M&A activity
The UK accountancy M&A market has gathered some real momentum recently, further expanding the need for advisory conversations
“You have got a lot of private equity firms who have taken an interest in the industry and if you twin that with several firms with an ageing partner profile, with nowhere else to go, it does appear to be a marriage made in heaven,” according to Stephen Goderski, head of PKF’s restructuring team.
A prevalent theme of this is guidance is on how to make a company “as valuable as possible” as part of an exit strategy, Haines Watts’ Montgomery adds.
Direct communication with a client is imperative to understanding their “time horizons” for an exit, says Montgomery. Without this, there will be insufficient groundwork to establish an effective exit plan in time.
Accountancy Age’s latest research seeks to gather insight into how accountancy practices are structuring their advisory arms, the demand for certain areas of advisory, and who these additional services are being costed.
To take part in this research, please click here
