Accountancy Research

New benchmarking study into the Accountancy profession

In March 2006 we conducted a 'winning new business' benchmark study of small to mid-tier accountancy firms. With the support of Accountancy Magazine, this study examined how these firms win and retain business in the current economic climate.

Below is the executive summary detailing our findings.

Executive summary

Key findings of the study:

Small and mid-tier accountancy firms put in a good solid performance in their approach to winning business in the current economic climate. There are a number of areas, however, where they have an opportunity to improve.
Participants were stronger at focusing their energies in deciding the type of clients they want to work with, understanding those clients and building good relationships with them.
In contrast, participants put in a weaker performance when it came to creating systems that help them identify, win and manage new business. They appeared less successful at turning their ‘vision’ into a reality.
The ways in which these firms manage business leads from their referral networks and how they target clients came out as both strengths and weaknesses. Small to mid-tier firms appear to have an understanding of the type of client they want, but haven’t translated this into targeting specific prospects that match this vision.
In contrast to a similar survey carried out by The PACE Partnership in 2003 with larger accountancy firms, participants of this study were better at understanding which clients they would like to avoid working with. They were also stronger when it came to investing in training and support to help them win new business opportunities from target clients.
In a very interesting and seemingly paradoxical result, the activities firms tend to invest most in (to support their winning new business efforts) were rated with an average or less than average usefulness. In contrast, those activities that weren’t used as often scored highly in their value in supporting new business efforts.
Looking ahead, participants believe that they will need to invest in their business support systems and skill development, to improve the way in which they win new business in the 21st century.

Winning new business in small to mid-tier accountancy firms.
Irrespective of their size, all accountancy firms want to keep their existing valuable clients and at the same time win high value new clients. With time and resources strictly limited for these business development activities strictly limited, it is essential that both are approached with the highest possible level of skills and confidence, the most effective management processes and the clearest and most focused strategies.

This study looks at how small and mid-tier accountancy firms win business in the current economic climate. 334 small to mid-tier firms across the UK were invited to participate in this study. 61 chose to take part. In the majority of cases, the person representing their firm in the study was a partner of the firm.

The PACE Partnership – the business development consultancy specialising in professional services firms – regularly carries out research into these areas. Over the past six years it has examined how different professions win new clients, manage their key client relationships and cross-sell their services.

The benchmark study
This report details the findings of the 2006 Winning New Business in Small to Mid-tier Accountancy Firms. This is a comparative study exploring how these firms perform in eight core aspects of new client generation. From our experience and research, success in these aspects tends to bring firms of this size a more profitable and loyal client base. Some may suggest that performing well in all of these factors represents an unachievable ‘holy grail’. However, we have seen firms perform successfully in many of them and as a result achieve long-term profitable growth.

We also asked participants to indicate which activities they use to support their new business efforts. In doing so, the firms were also asked to rate the usefulness in winning new business for each of the activities they employed.

Areas of strength
The top areas of strength displayed by the firms taking part in this study were as follows:

Understanding clients – the ability of people within the firm to build a deep and accurate understanding of all aspects of a target client’s situation before attempting to ‘sell’ the firm or its services.
Building relationships - the knowledge, skills, confidence and motivation of the accountancy firm’s professionals in building strong, profitable relationships with people at all levels within target clients

Areas of weakness
The key areas, which hold opportunities for improvement for the survey’s participants, were as follows:

Managing the process - the planning and management of the firm’s approach to winning new clients.
Building a strong business pipeline – The planning and management of a steady flow of new business opportunities that enable the firm to achieve its long-term goals.

Accountancy Magazine will be publishing a general (non-firm specific) report of the research findings in late Spring 2006.