I was chatting with a lady last night who told me that she was looking for new accountants for her £4.5m turnover company.
She asked my advice. Here's some of what I told her.
All of the firms you have asked to quote will, I am sure, obtain a copy of your accounts, possibly from Companies House, so will know what your current audit fees are. If you have supplied your detailed/full accounts the tendering firms will also have an idea of who much you’re paying over and above the audit fees for ‘professional’ or ‘accountancy’ services.
I suggest you consider exactly what services you will require from your new accountants and what level of support/input you would like.
In my talks to business owners and to local and National business groups I address a number of the key issues that are all too commonly overlooked by successful companies when appointing a new firm of accountants. Often the business owners themselves don’t know the right questions to ask – and of course these will differ depending upon the circumstances and the personalities involved.
I assume that your FD or some other accountancy trained person will also be on your side of the table during the beauty parades. Many founders/MDs find this an invaluable aid in helping them to see through hollow promises and to help clarify the final choice. Equally there is much that the tendering firms can do before the beauty parade to show how serious and professional they are (or not) as the case may be. Too often a good salesman (and yes, some accountants are good salesman) can swing the appointment despite, what a trained professional can identify as, an absence of sufficient backup and support.
Another thing you should be ready for is to consider what other benefits you could get from your new accountants and that you have not had to date. Additionally to keep an eye to the future; what else might you need from your accountants if the business continues growing as it has in the last year or two – or if times are not so good?
I have sat on both sides of the table in such situations and am well versed in what can go wrong. Specifically, some years ago I was asked to sit on the panel facing a number of firms who were pitching to be appointed as accountants. We were effectively forced to pick the least worst as we couldn’t afford to devote any more time to the process.
I sat on the same panel again earlier this year and we didn’t want to make the same mistake again. I helped ensure that the pre-tender briefing was more focused, the panel agreed the key issues and we discussed our views on a timely basis. We were unanimous in our choice this time and subsequent experience has only been positive. Sadly though we probably lost out on four years worth of potentially valuable advice and input.
I hope this is helpful. If you’d like some more formal, expert, independent input on the tendering/appointment process please let me know.