In a blog on merging with other practices, the accounting pioneer Elaine Clark phrased her opinion on mergers rather succinctly: “Don’t merge your accountancy practice – change it”.
Clark’s opinion might not be for everyone - but even if you don’t completely accept her argument against mergers, her broader point - on the importance of the internal development of your practice - holds water. “Of course the real answer is to adapt, change and grow in line with the business world around you,” wrote Clark. “Nothing ever stands still and those that rest on their laurels of having a successful and profitable business always come unstuck in the medium to long term as new entrants and competitors overtake them.”
It’s tempting to think of a merger simplistically; as a power move that will double your capacity and cut costs.
But the pressure accountants might be feeling right now isn’t necessarily from lack of resources or scale. And pursuing a merger merely to fill some empty office space, spread costs or utilise excess staff aren’t good enough reasons to proceed with a merger.
Progress toward the future begins internally
If merging your practice with another isn’t necessarily a silver bullet, then what is there to do?
Well, Before embarking on something as ambitious as a merger, there are a few alterations you can make closer to home. It’s certainly not easy to evaluate your own practice critically. But an easy place to start are these two important questions:
Is my practice prepared technologically?
Even the casual observer will notice that tech has made basic accounts preparation and bookkeeping much easier for your clients. As bean counters are automated, have you taken the steps necessary to rebrand and reposition your practice?
As Annie Makoff put it in the ICAEW’s magazine Economia: "Accountants will need to become consultants able to interpret business symptoms and prescribe appropriate action”.
Do you have the technology necessary to utilise these skills?
But tech isn’t just about continuously adding more complexity to your practice. With the advent of accounting platforms, practitioners now have the ability to ‘merge’, if you will, their different operations into one seamless whole.
Is my firm prepared for altered client expectations?
As Paul Shrimpling of the Remarkable Practice: “Only your clients can determine whether they receive value for money or not”.
In the years since Shrimpling wrote this, that pressure has only increased.
Accounting isn’t immune to the pressures of the on-demand service economy. Writing more broadly in Forbes, the customer service guru Shep Hyken customers are “more in control and more up-to-date on the latest and greatest ways to conduct business – sometimes even more so than the companies they are doing business with”
Business owners have a much stronger image of how things ought to be. Can you match this image? Do you have the data required to offer a flexible, tailored, and insightful service offering? Do you offer modern services like online meetings?
So you’re still considering a merger
After completing the requisite soul searching, you might decide you’d still like to complete a merger. That’s not unreasonable, of course: the accounting profession in the UK has a long history of mergers.
But now, more than ever, it’s important that any potential merger builds towards the broader trend of digital disruption within accounting. Once you’ve built a connected accounting practice, at the tippy-top of your accounting firm merger checklist should be cultural fit.
Simon Haynes, managing partner of Colin F. Whitfield & co., summed this idea up well after his firm merged with a competitor last year. “We have been looking for a practice with similar values to provide the services and same level of service clients of Colin F Whitfield & Co have come to expect from us over the years,”Haynes told Accountancy Age.
In Haynes words there lies a golden truth: even if you’re an exceptional firm, if you combine an average practice it’s not going to work out. The accounting merger specialist Russell Shapiro perhaps put it best: “The most important factor is that the merging firms be culturally compatible.
Just like a marriage, it won’t work if nothing is the same. Why? The partners have to be able to work things out, to be able to talk together on things. You have to see if the practice fits.”
When you look for your potential partner, make sure they are just as ready for accounting’s future as you are. Anything less is a step down.