SJD accountants

[minstrel]

I know a little about the Freeagent partner discounts and at £55 PCM there's not a lot of profit in this. I doubt this is a sustainable model. I may be completely wrong.

Definitely wrong there Alan. Kevin @ KPF has been working this model for years.

[Alan @ BroomeAffinity]

Definitely wrong there Alan. Kevin @ KPF has been working this model for years.

Fair play to him then. He's clearly much more efficient than my firm. I reckon it costs £500 pa to adequately service a client. I guess he's a solo practitioner working from home? Not that there's anything wrong with that. It's how my firm was born.

[Fred Bloggs]

Perhaps as technology evolves we will see more low cost alternatives to the traditional contractor accountant model. For example, why can't a home working practitioner recruit another one, and another etc....? With all information in the cloud, collaboration within virtual companies or partnerships has never been easier. Many people I know like working from home and are actually more productive without a long commute, parking fees, rail tickets etc.. to worry about. Could the next "SJD" grow out of such a virtual set up? Yes, I believe it very well could.

[Alan @ BroomeAffinity]

It wasn't a criticism. Far from it. I believe in working from home. All of my team spend at least half their working week wfh. I believe there's great growth potential in a network of home based professionals. I personally find the management a challenge but with a bit of will I guess it could be overcome.

[Fred Bloggs]

It wasn't a criticism. Far from it. I believe in working from home. All of my team spend at least half their working week wfh. I believe there's great growth potential in a network of home based professionals. I personally find the management a challenge but with a bit of will I guess it could be overcome.

And I never thought it was a criticism. It's just that I can see plenty of scope for lower cost service providers to enter the market. Since an awful lot of the grunt work currently done by clerical staff will be taken over by the client and the software, then managing the virtual company actually becomes much easier as you will only employ professionals who are largely self managing. And all the productivity statistics you need will be available at the click of a mouse to identify very quickly the under achievers. It's going to happen and it sounds like you're already moving that way.

[minstrel]

Fair play to him then. He's clearly much more efficient than my firm. I reckon it costs £500 pa to adequately service a client. I guess he's a solo practitioner working from home? Not that there's anything wrong with that. It's how my firm was born.

Yes - he's a solo practitioner and I'm pretty sure he works from home.

[Alan @ BroomeAffinity]

Yes - he's a solo practitioner and I'm pretty sure he works from home.

That'll explain the fees: low cost base. Difficult to scale though.

[Maslins]

It's just that I can see plenty of scope for lower cost service providers to enter the market. Since an awful lot of the grunt work currently done by clerical staff will be taken over by the client and the software, then managing the virtual company actually becomes much easier as you will only employ professionals who are largely self managing. And all the productivity statistics you need will be available at the click of a mouse to identify very quickly the under achievers. It's going to happen and it sounds like you're already moving that way.

The problem is the main way for an accountancy firm to reduce their own costs, they need to either reduce their staff numbers, or employ less experienced/qualified staff. Yes software/the client can do a lot of grunt work, but typically neither can answer tricky personalised questions about accounting/tax.

I can see that improvements in software will lead to an increasing number of contractors (and indeed other small businesses) DIYing their accounting affairs. Some will do so very successfully, others will make a hash of it.

I don't really see the current breed of fixed fee contractor accountants (of which we are one) plummeting in price though...as if they do so, it'll only be by removing/reducing the main thing which software/the client can't do.

Does make me wonder whether some clients will be keen to move back to a "time costs" basis. Those who are confident they can DIY well, but want the occasional bit of expert advice. Accountants themselves have helplines for their trickier tax queries.

Perhaps there'll be a new business opportunity opening up for that direct to the end consumer. Ie you sign up with a firm for a trivial monthly fee (perhaps £5/month) which gets you a unique username/password. You can then call a helpline which is charged on a per minute basis. You have that sitting alongside you more generally DIYing via software. Would mean there'd be zero relationship between client an accountant though, it'd be a full on call centre mentality.

Interesting to see how the market evolves next...

[ContrataxLtd]

Just to throw my thoughts in on this, I actually think that taking on more qualified/experienced staff can actually help reduce a firms cost base as there should then be less time spent managing staff and more time actually working with clients and this is how our business model is based.

Others may well disagree but if the client has one point of contact who is experienced enough to be able to handle all of their queries then this can reduce staff numbers and thus costs. It also means that the management structure can be much 'flatter' which combined with employee shareholder status can help grow a business with decent profit margins whilst maintaining a great level of customer service.

Martin
Contratax Ltd

[Fred Bloggs]

Interesting thoughts. I might add that when you use FA there is an instant chat pop up manned by FA staff and they answer questions instantly. FA also claim they have qualified accountants on hand to answer subscriber queries. My present accountants who are an established spreadsheet firm recently introduced FA accounts as an option for their clients. Given that FA puts nearly all the clerical work load on the customer and most of the calculations and returns are done by the software, I was surprised that the accountant wanted to increase their monthly fee to move to FA. I have actually given my accountant notice that I'm moving after 13 years. I haven't finalised my choice of next accountant yet, but it will be one of the lower cost FA accountants that I move to.