By Liza Robbins.
200 years after the French Revolution, Mao Zedong was asked about its impact.
He famously answered: “It’s too early to tell.”
Brexit was finalised less than a couple of months ago. So I’m not ready to judge the long-term effect on the complicated relationship between the UK and the members of the European Union.
But it’s not too early to tell how Brexit has affected the relationship between Kreston firms in the UK and the Continent.
Here’s the irony…
It’s brought them closer.
“UK businesses are still very closely connected to the European Union, even though we are now outside the single market and the customs union,” says Wendy Andrews, VAT Director at Bishop Fleming in the UK.
She worked “flat out” to help her clients adjust to the new reality before Brexit, which involved working “more closely than ever” with Kreston colleagues in France, Germany, and the Netherlands.
At first, she says, she was worried that “people would treat the UK differently and that the ties and relationships wouldn’t be the same. But I haven’t seen any sign of it.”
She has discussed Brexit with her Kreston contacts on the European Continent – “we had to address it. But it hasn’t been unpleasant or an argument. For us, it’s a practical issue.”
And she’s at pains to emphasise how grateful she is to them for “helping and making things easier, not more difficult. We’re all professionals!”
Just across the Channel, Leo Codjia of Kreston Conseil in Paris agrees.
“We need the UK and the UK needs Europe,” says Leo, who is responsible for his firm’s International Clients department. “So we’ll continue to work together, and Brexit doesn’t break this collaboration.”
He’s been working with several British Kreston firms over the past few months to help British companies set up subsidiaries in France, to deal with VAT issues arising from Brexit and also to help a French businessman who had settled in the UK return home.
And he expects this cooperation to intensify throughout 2021 as clients continue to adjust to the new circumstances.
There will also be opportunities flowing in the opposite direction, as EU companies open offices in the UK for the first time. A report last week suggested that at least 1,000 finance firms were looking to do so.
“Working with the British firms is a pleasure,” Leo says. “Now we just have an interesting new project to work on…”
In a global network like Kreston, it’s inevitable that there may be political tension between some of our members’ countries.
The cross-Channel cooperation over Brexit is a wonderful reminder that this does not have to carry through into business.
On the contrary, doing business together can help bridge even painful political divides.
And as Kreston members, with all the ties that bind us and the goals we have in common, we have a head-start.
- Published in Blog
By Liza Robbins.
“We’re known as the lucky country,” says Michael Goodrick, Partner at Stanley & Williamson, one of the two Kreston firms in Australia.
The saying refers to Australia’s natural resources and economic opportunities. But it applies equally to its experience emerging from the Coronavirus crisis.
Since the beginning of the pandemic, Australia has suffered fewer than 1,000 deaths. Now, almost alone amongst Western countries, Australia is inching back towards “normality.”
As of February 1, the staff at Sydney-based Stanley & Williamson were expected to work from the office on a part-time basis.
I called Michael to find out how they’ve managed this ‘reverse transition’. He told me that the key was to loosen the restrictions gradually.
“We started to let some staff back into the office at the end of May, but it was limited,” he says. “They had to come in by car, there was no hot-desking, we kept people away from each other and the office was cleaned several times a day.”
By September, government guidelines allowed more flexibility. More staff members were allowed to return even if they used public transport, but they couldn’t travel during peak hours.
“At that point, we didn’t force anyone to come in if they weren’t comfortable,” says Michael. “And we had to drill into people that they had to behave responsibly outside the office. We couldn’t risk exposing the team to Coronavirus.”
At the end of December, they informed staff that it would be compulsory to work from the office by February.
Giving plenty of notice allowed staff to prepare practically and psychologically. And it allowed the firm to work on new arrangements – because they weren’t going back to the “old normal”. The firm understood some team members had enjoyed remote working, and wanted to accommodate them.
Under the new rules, most staff members must come into the office at least 5 days every fortnight. Receptionists and juniors need to be in the office every day, and the entire team has to come in on a Thursday to make it easy to schedule training and social functions.
And team members are asked to meet clients face-to-face if required, no matter where they’re working from.
“Nearly half of our staff have chosen to continue working from home on some days,” Michael reports.
The majority, he says, are relieved to be back in the office – but “they’re appreciative that we’ve listened to what they wanted, and come up with a solution that works for everyone.”
After months working alone, there has been “a lot of collaboration straight away. It’s remarkable how quickly you can resolve issues if you don’t have to schedule a call.”
But there’s also been some re-adjustment.
“Getting used to working with other people around has been a challenge,” he says. “Our office is largely open plan. We need to remember not to speak too loudly…”
During the crisis, the firm lost a few clients whose income dried up, and saw a drop in M&A and international business.
However, they also gained some medium-sized clients who needed more attention than the Big 4 could give them – which is Stanley & Williamson’s sweet spot. And now that things are re-opening, there is “a lot of money floating around and enormous appetite for transactions to start happening again.”
So this firm, which celebrated its 50th anniversary a couple of years ago, has big plans for 2021 – not least adding Kreston to its name!
“We have lots of clients operating internationally, and want more of them,” says Michael. “Having Kreston in our name will allow us to be seen as a more global firm and take things to the next level.”
Every firm will approach its return to the workplace differently.
But Australia’s lesson for the rest of us?
If you’re still in lockdown, there is hope. Start planning…
- Published in Blog
By Liza Robbins.
“We’re born fighters – we’re Greek!” George Batsoulis beamed, when I spoke to him last week.
George is president and managing director of the newest firm to join Kreston, Hellenic Auditing Company.
And his words perfectly summarise the story of this plucky firm.
They are used to operating in challenging conditions.
After years of stagnation, the Greek economy developed rapidly in the 1990s.
But all that came to a halt in 2008, when Greece had a deficit crisis and eventually had to be rescued by the European Union and the International Monetary Fund.
“In the past couple of years things seemed to be improving, but then the pandemic struck,” George says.
Still, they’re determined to do whatever it takes to emerge from this crisis “ahead of the economy,” George says.
He established the firm in 2010 together with a group of partners from BDO, where he was previously CEO.
Hellenic now has more than 35 team members in its offices in Athens and Thessaloniki, and is particularly known for auditing, mergers and acquisitions and tax.
Until now, they have grown mostly by word-of-mouth.
“We have very experienced partners and exceptionally warm relations with our clients,” says George. “In a chaotic environment, you can stand out by being good and reliable – that’s us.”
They feel they’ve done well during the Coronavirus crisis, slightly increasing their annual turnover in 2020 by investing heavily in their relationship with their largest clients.
But now they’re ready for more…
…Which is why they’ve joined Kreston.
Their aim is to become a lot more commercial, expand their offering and systematise their operations.
“We’ve been working on our marketing recently, improving our website and sending useful information to our clients,” says George. “But that’s one area we aim to develop.”
They are also hoping to benefit from training opportunities for staff, as they have a relatively young workforce and want to continue attracting young talent.
And they’re eager to forge close relationships with new Kreston colleagues abroad. In recent years clients have started expressing interest in expanding to Europe and they would like to support them.
There are also opportunities for Kreston firms in Greece, George adds.
“Before the pandemic, hotels and tourism were very much in demand, and I’m hopeful that will pick up again soon.”
Coincidentally, the hotel sector is one where they’re especially strong, together with construction and professional service firms.
Either way, George adds, he’s optimistic about the future.
“Crisis always brings opportunities,” he says.
Words we can all take to heart right now…
- Published in Blog
By Liza Robbins.
Katarzyna Grabarczyk, Kreston International’s Member Services Manager, was in a Teams meeting with partners at a Kreston firm that specialises in the automotive industry.
Together, they logged onto Kommunity, our new referral system, and brought up a long list of other Kreston members with expertise in the same area.
“Are these your new best friends?” Kat smiled.
She was joking, but like all good jokes there was some truth in her words.
If we’re going to drive our firms forward, it’s essential to develop close relationships with potential business partners in our network.
The more Kreston colleagues we know well, the more business we can refer each other. The more help we can give each other, the more we can help our clients grow.
But if you listen closely to Kat’s words, there’s also a catch…
Many people find it difficult to see a list of contacts on a screen, and turn them into their “new best business friends.”
It’s only natural if you want to reach out to potential contacts, but you’re worried about intruding…
You’re not sure what to say… How do you turn an introductory call into a long-term business relationship?
The truth is, reaching out to a fellow Kreston member is probably less stressful than any other type of networking.
Our chair, Rich Howard, has told me that he’ll never accept any LinkedIn request from anyone he doesn’t know – unless they belong to a Kreston firm, in which case he will never ignore them.
I would imagine – and hope! – that all Kreston members feel the same way.
Still, I want to share with you the most useful piece of advice I ever received about networking.
“The easiest way to break the ice is to be a giver.”
In other words – and apologies here to JFK – don’t ask what your new contact can do for you. Ask what you can do for them.
Go into every networking call with something useful to share, whether that’s a referral, a good piece of advice or a recent success your colleague can learn from.
And if you don’t have anything that comes to mind, simply ask: “I want to find out how I can help you?”
When you go into networking thinking about what you can give rather than what you can get, something magical happens…
Your nervousness disappears, because there’s no need to impress anyone to win their business.
Instead of a general “introductory conversation”, your initial chat turns into something much more constructive, and the bonds you build with your new contacts are so much stronger.
The people you connect to will trust you faster, because you will have shown straight away you mean business – literally!
And when you really need their help, they will be much more inclined to reciprocate, because your partnership began on Day 1.
The reason I’m sharing this advice is because this is International Networking Week…
It’s a great time to log onto Kommunity and look up potential contacts who would be worth reaching out to. You can search by expertise, geography, language and other settings, depending on what you’ll find most useful.
(And while you’re there, make sure that your own profile is fully filled in, so that the most useful contacts can find you easily, too!)
Commit to making contact with some of them, and finding ways to work together to grow your business. I’ve just given you an easy conversation starter…
And if you’d like to create even stronger relationships within Kreston, join in with our Koffee with Kreston online networking sessions this month.
They are a chance to meet other Kreston members across the globe, build some connections and maybe some new business opportunities.
You can find the details on Kommunity!
- Published in Blog
By Liza Robbins.
How did Apple become so successful?
Its technology isn’t any better than its competitors’.
But it’s pushed the message that its products are for creative, cutting-edge people who want to “Think Different.”
Apple has created an exceptional brand identity, which people immediately understand and want to be part of. When you buy an Apple product, you’re buying a lifestyle.
It’s also been selective about the products it promotes.
There are 27 in its portfolio. But it focuses its marketing on a few flagship pieces like the iPhone and iMac, which act as an entrée to the rest of its product line.
Kreston is a very different organisation to Apple.
But developing that same kind of clear message about who we are and what we’re best at is the next step in our growth plans.
It’s largely a marketing challenge, which is why I’m excited to introduce you to Virginia Cook, our brand-new Marketing Director, who will be spearheading this crucial work.
Over the past few years, our marketing has become a lot more sophisticated.
We’ve enhanced our social media presence and launched a number of new communication tools to help Kreston members and their clients.
And our new Kommunity platform is the foundation we need to bring the network together.
Not only does it allow us to refer a lot more business to each other, but it helps us connect with colleagues with the same interests and specialities.
A lot of this work has been about ensuring that there’s good communication between Kreston HQ and member firms, and between the firms themselves.
But our strategy is to become more commercial.
So now all that’s in place, it’s time to turn outwards – to our potential clients – and make sure we have a great story to tell them, too.
“To drive more business, we need to carefully define what we stand for,” Virginia says. “We can’t be all things to all people. The challenge is to become known for a handful of things that we do really well and tell the world about them.”
This doesn’t mean Kreston firms will have to narrow down their offering.
“It’s about building momentum for a few key areas, and once new clients come on board, selling them other services. It’s called the ‘halo effect’!”
Virginia is going to start by exploring the areas where we have the best capabilities and success, so that we can develop an attractive “core offering”.
She’s also going to work on defining our purpose, because organisations with clear missions are always more attractive both to clients and to their members.
Once this strategic work is complete, we’ll need to get the word out there by enhancing our web presence, increasing our social media activities and using other marketing tools.
Virginia hopes to help individual firms talk about Kreston’s capabilities more easily. And more immediately, there is work to do on our digital visibility and “really maximising the content we are writing”.
“And we need some really great stories to show how we’ve helped clients be successful internationally, so prospective clients can read about businesses like them,” she says.
Virginia is the right person for the task. She has vast marketing experience in professional services firms – both global names like BDO, Roffe Swayne and PwC, and local firms closer to home.
She’s had business development roles too, so she really understands our commercial considerations.
I was impressed by her determination and drive – but she’s also the kind of person I know you’re going to enjoy working with. (Kreston is a family, so that’s important!)
And like everyone on our team, she has a very international outlook. She was born in New Zealand, has lived in Singapore, speaks “conversational” French, and has a special passion for Spain and the Spanish-speaking world (and the food!).
I know she’ll be on a plane to meet as many of our firms as possible as soon as conditions allow…
…Because critically, she can’t accomplish all this alone.
Virginia needs your input – both to identify the areas where we can become world experts, and to understand what you most want from our marketing.
As a first step, she’s going to be organising some online discussion groups around marketing. Watch out for those invites soon.
In the meanwhile, please join me in giving Virginia a warm Kreston welcome. Her work is going to be critical for our future!
- Published in Blog
By Liza Robbins.
One of my friends founded a company that was successful beyond her wildest dreams.
It grew fast, and she loved capturing new business and dealing with the clients.
But then, her contact at her biggest client died, and their replacement brought in their own people.
Through no fault of her own, she lost this key contract.
Within a few short months, she was forced to sell her company.
It turned out that she had been so busy with the “fun” parts of growth that she hadn’t taken time for more hum-drum matters like risk management. Even as her business grew, she had been dangerously exposed.
I’ve been thinking of her story a lot recently…
You see, ever since COVID started, there has been an enormous focus on businesses that are struggling. It’s only natural as the world has plunged into economic crisis.
But here at Kreston, we’re also seeing a lot of growth.
I regularly talk to firms that are busier than they’ve ever been… That have had to hire heavily to handle all the extra work… That are taking on new clients regularly.
It’s a fortunate place to be in right now.
And if your firm is lucky enough to be in that position, you’re probably excited about the opportunities and feeling energised.
You’re likely also feeling very confident, given that you’ve thrived during the biggest global challenge of our lifetimes, the pandemic.
But you cannot be complacent.
It goes against all our instincts, but fast growth can be dangerous.
As my friend saw, it’s easy to get so caught up in a whirlwind of activity as your firm grows that you can lose sight of the bigger picture. You can end up neglecting essential parts of the business, like strategy, oversight and developing a balanced portfolio.
If your firm doesn’t develop its processes fast enough, you might not be able to handle an influx of new work smoothly.
The systems that could easily cope with 100 clients might buckle with 150… Your services can become disorganised and inefficient, and you’ll end up with an unhappy client base – and some very stressed team members.
When you scale too quickly, you can also end up making big mistakes under pressure – like hiring the wrong people or investing in the wrong technology. These can cost you dear in the long-run.
Finally, you’ve probably dealt with clients who ended up in financial trouble, precisely because they were growing. While their numbers looked good on paper, they had to invest heavily to sustain their growth, and ended up with cash flow problems.
If you’re expanding quickly, you’re not immune to that either!
The bottom line is that fast growth needs to be carefully managed.
You need to make sure that you have the right infrastructure, people and processes in place to handle rapid change.
But it all begins with awareness…
…And understanding that what seems like the best of times can rapidly become the worst of times, without due care.
- Published in Blog
By Liza Robbins.
How do you build a multi-million dollar company?
You might imagine that you need to constantly innovate… Expand your portfolio of products and services… Do more.
The founders of Basecamp, one of the world’s most popular project management tools, took the opposite route.
Back in 2014, they had a dozen popular apps and services, including Highrise – a CRM tool – and Backpack, which helped people stay organised.
Overnight, they announced they were going to retire all of them other than Basecamp, so they could focus on their flagship product.
It was a bold move…
…but it paid off handsomely.
With millions of users and a quarter of a billion dollars in revenue since inception, Basecamp is a massive a success story.
We can learn from this at Kreston.
In January, it’s only natural for our firms – and leaders – to think about what they want to accomplish in the coming year.
This normally involves doing more…
Starting new projects…
Hiring new people…
Expanding into new markets and new areas.
But what if we decided to do less…
To drop services that weren’t profitable enough or which were draining our resources…
And to focus on the parts of our business which show the most promise and success?
Your firm would doubtless grow faster.
(And you know this, because it’s probably what you advise your own clients to do when you look over their management accounts, and note the areas of their business which are under-performing!)
The main obstacle to this approach isn’t anything practical. It’s about mentality and mindset.
Our culture constantly tells us that “new” means “progress” and is where the excitement lies…
Dropping services and doing less can feel like a let-down.
But in The Dip, Seth Godin – one of the world’s leading speakers on entrepreneurship – argues that being savvy enough to know when to quit is the hallmark of companies that ultimately dominate their niches…
…because they don’t get bogged down in failure.
The problem, of course, is knowing which of the things you’re doing are really hopeless, and which you should persevere with. That’s something I’m going to address in a future email.
For now, let me set you a challenge for 2021:
What activity or service is your firm going to drop this year, so you can become more successful?
- Published in Blog
By Liza Robbins.
We’ve got used to thinking of 2020 as ‘the year that changed everything’.
I think that may be wrong…
…And that it will probably be 2021 that changes the world.
I’ll explain why in a minute. But first, let’s take a step back.
One of the most interesting things about heading an organisation like Kreston is that you get a truly global perspective.
Here in the UK, our Coronavirus crisis is deeper than ever. The country is under strict lockdown. Schools are largely closed. Hospitals are reaching capacity and both infection rate and deaths are going up, up, up.
It’s a similarly alarming situation in most European countries and parts of North America.
But that’s not the situation everywhere.
I interact every day with colleagues in China, Australia and elsewhere, whose situation is far better. In some cases they’re leading almost ‘normal’ lives.
They are bemused when I say we’re still working from home or unable to go to a restaurant. For them, in many cases, that’s a thing of the past.
I love those conversations. They give me hope that this virus can be defeated and that it is only a matter of time before lockdowns come to an end – everywhere.
Wherever you are in the world, it’s vital that we enter 2021 with that sense of optimism.
It’s true that in many places, things might get worse before they get better. Infections and hospitalisations may still rise for several months. And the economy is rocky almost everywhere.
But the vaccine is already being rolled out, and there are now examples of countries where COVID seems to be under control. Better times lie ahead.
My hope is that we’ll come out of this crisis stronger – as individuals, as firms and as a network.
But we cannot take that for granted.
You see, we face a choice.
As we emerge from the Coronavirus crisis, we can slide back into “normality” – reverting back to all the same old habits and ways of living and working, without much thought.
It’s a very tempting option! I know many people who can’t wait to pick up exactly where they left off 10 months ago.
Or we can exit this crisis more thoughtfully, rethinking our lives, values and priorities after this enormous upheaval.
So, for example, this is a good opportunity to confirm that our firms have a clear purpose, and that we’re doing work which is meaningful.
After so many difficult months, we need to ensure our working life brings us joy.
We can make sure that we’re operating as efficiently as possible, carefully considering our organisational structures and systems as we return to the office. We’ve learned to keep leaner organisations – can we take this any further?
And we can keep the best of what we’ve implemented during Coronavirus, for example conducting more meetings over Teams or Zoom rather than flying frequently, or giving staff more flexible working options.
The key is that “pivoting” isn’t just for the Coronavirus era.
There’s no time to relax as the virus recedes. To continue moving forward, we need to continue evolving ourselves and our businesses even when the crisis is over.
In many ways it’s the ideal time to do it, because we’ll have more time to think about our futures without the pressure of a global healthcare crisis.
That’s why I consider 2021 more definitive for our futures, in some ways, than 2020.
It’s the year when we’ll see whether our ability to “think outside the box” and “be agile” have become a permanent part of our makeup – or whether it was just a temporary response to an emergency.
It’s the year when we’ll see whether any lessons of the Coronavirus era actually stick.
In short, we can all be hopeful that 2021 will be a vast improvement on 2020.
But that’s a pretty low bar to cross…
And it’s in our power to make it far more than that – a year that really does change everything.
Let’s do it!
- Published in Blog
By Liza Robbins.
51 weeks ago, in the first week of 2020, I wrote an article reflecting on how our work underpins civil society:
“Without good financial systems, society cannot function smoothly, just as it cannot function without a good legal system,” I wrote.
“And without the kind of checks-and-balances we provide for the financial system as auditors, accountants and tax advisors, people will not be able to have confidence in society, either.
“It’s hard to see how essential that confidence is until things go wrong.”
Little did I know how much was about to go wrong… And how critical our work proved!
As the year draws to a close, it’s worth reminding ourselves – and our teams – of the value we provide to society. Click here to revisit the piece now.
And if you have a few minutes over the New Year, you might also enjoy some of the other pieces we published this year.
Here are some of my personal favourites…
>> How Kreston Zimbabwe thrives in a distressed economy – This was inspirational! Not only has our Zimbabwe firm had to contend with Coronavirus, but they’re working in a distressed economy, tumultuous political environment and a country beset by strikes. And yet they’re growing steadily.
Here’s how they’ve done it.
>> A difficult conversation about racism – “Racism is every day for me,” Philip Olagunju, director at PEM Corporate Finance in the UK told me at the height of the Black Lives Matter demonstrations.
I found his story extremely eye-opening. And his suggestions for how Kreston firms can do more to embed equality and diversity – wherever they are in the world – remain must-reads.
Click here to read Philip’s story.
>> The leadership struggle most people never acknowledge – When you’re a leader in your firm, people look to you for support and encouragement. But what happens when you’re struggling yourself?
A useful reminder, at the end of the most stressful of years, that sometimes even people at the top are not okay. Read more here.
>> Being prepared – We seem to be at the tail end of the Coronavirus crisis. But are you ready for a future emergency? If we’ve learned anything this year, it’s to expect the unexpected.
With that in mind, it’s worth revisiting our piece from March on how to put together an effective disaster recovery plan. Click here to read it now.
Thank you again for all your contributions and feedback to my newsletters this year!
Wishing you a happy new year, and a successful, healthy 2021 ahead –
- Published in Blog
By Liza Robbins.
Christmas is almost here…
…And if you’re celebrating, hopefully you’re as ready as you can be.
But just in case you’re still struggling to finish your Christmas shopping…
…Or have suddenly remembered a long-lost aunt or distant cousin you forgot to include…
The Kreston HQ team is here to help!
I thought it would be nice to share our top gifts for 2020.
These are items which have meant something to us over this year, or which we’re giving as gifts to our own family and friends.
I hope they’ll give you some last-minute inspiration.
And if you’ve finished all your Christmas shopping (or don’t celebrate Christmas), you might enjoy one or two of them yourself J
1. Hana Ball, Content Marketing Manager – Simple by Yotam Ottolenghi.
“Over the past year, I’ve had to spend a lot more time at home than usual. And that’s meant a lot of extra cooking and baking – both of which I love.
“Yotam Ottolenghi’s cookbook, Simple, is the one I’ve come back to again and again. His Mediterranean-style cuisine really speaks to me. And unlike many of his other recipe books, which are known for being a bit fussy, this one is… well… Simple!
“My favourite recipe in the whole book is his Charred Cherry Tomatoes with Cold Yoghurt – absolutely delicious!
“I loved this book so much that I’m giving Ottolenghi’s new book, Flavour, as my Secret Santa gift – and I might just buy an extra copy for myself…”
- Andrew Collier, Director of Quality and Professional Standards – Strava subscription.
“For the past few years, my family has had a special tradition on Christmas morning…
“We wake up and go for a 5K run together. It’s a wonderful way to start off our day outdoors and give us energy before the ‘big day’ ahead.
“This year, my wife and I are going ahead with this tradition, even though our son is currently in America. So I’m planning to buy both of us some new running shoes before Christmas.
“That’s a pretty difficult gift to give someone else. But if there are any runners in your life, I’m sure they’d appreciate a subscription to Strava, the app to track your exercise. There’s a great free version, but the paid-for version unlocks a lot of excellent features, including a training dashboard, advanced metrics, goal setting, route planning and more.
“I don’t know any runner who wouldn’t love that!”
- Xinxin Cusack-Huang, Member Services Executive for Asia Pacific, Middle East and North America – Animal face masks.
“This year has been very difficult for everyone, so I thought that I’d include some funny items to make the pandemic just a little easier to bear.
“My friends and family will receive – amongst their other gifts – some silly Coronavirus masks with animal faces, big mustaches and extra big smiles. I hope that they’ll make them smile too!”
- Katarzyna Grabarczyk, Kreston International’s Member Services Manager – Luxury Wool Blankets.
“Almost everyone in my family moved house this year. I moved house twice! So this year, I’m giving gifts that will help make a house a home. I think it will be especially welcome as we are all spending more time at home than normal.
“The item I love giving most of all is a beautiful, high-quality wool blanket which you can use when the weather is cold outside to make your house feel warm and inviting. I like to have a pile of them on my sofa.
“Of course, this doesn’t have to be an expensive item – there are plenty of reasonable but still very beautiful blankets available as well. Just make sure it feels soft to the touch.”
5. Liza Robbins, CEO (that’s me!) – Flower bulbs for a garden.
I moved house recently, which can be quite chaotic. The one thing which has bought me immediate serenity has been putting on my wellington boots, heading out to the mud and planting flower bulbs in my garden.
I’m very English that way!
I think it’s a beautiful gift to give to others as well.
It’s the ultimate in optimism, isn’t it? You plant your flower bulbs today, and then they come in spring, giving you something beautiful to look forward to and to enjoy in the future.
I think we can all use a bit of that as we head into 2021 🙂
On that note, I wish you the happiest of holidays!
- Published in Blog
By Liza Robbins.
Early in his career in a Big 4 firm, Alex Koretskyi worked in a Shared Service Centre (SSC).
Colleagues from all over the world would send basic auditing work to the hub where local auditors did the work quickly, to a high standard and at a low cost.
The Shared Service Centre gave the Big 4 firm a competitive advantage.
When Alex started working for Kreston GCG in the Ukraine late last year, he thought: “Why doesn’t Kreston have that?”
By then, Alex was Kreston GCG’s director of audit & assurance. And by this stage of his career, he had plenty of experience of Shared Service Centres from the other direction – giving them work!
He used this knowledge to set up a Kreston Audit hub, which launched as a pilot this summer, and is now expanding.
This Ukraine-based service serves all of Kreston’s firms who wish to outsource routine audit work such as testing of journal entries, footing financial statements, detailed testing of any section of the file, investments testing, rolling forward working files, vouching documents, group audits communication and deliverables coordination, or IFRS 16 models review and preparation.
It can also conduct full audits and fulfil ad hoc requests.
Setting up this hub was a no-brainer, Alex told me when we spoke recently.
“Two thirds of Fortune 500 companies have their own SSCs, and it’s standard for the Big 4 auditing companies,” he said.
“The savings for firms which use this service can be enormous,” he said. “We carry out basic tasks at a much lower cost than most English-speaking countries, so it makes sense to outsource them.”
But it’s not just about financials.
Michael Cook is Partner and head of the audit team at Kreston Reeves – one of two UK Kreston firms working with the hub since late summer.
He says that the hub allows his staff to turn their attention to more high-value work, conducting more insightful conversations with clients and building up better relationships with them.
“It’s not about using fewer people locally,” Michael emphasises. “The additional capacity simply gives us more flexibility during peak times and helps our existing team work more efficiently.”
And there are advantages for the entire network as well.
Having this resource “could help get us compete against other networks,” says Alex.
When you think of outsourcing, Ukraine probably isn’t the first destination that springs to mind, but in fact it has a growing outsourcing market.
It makes sense. Ukraine is low-cost but highly skilled, with 77.5% of its working-age population having higher education.
Most auditors in Ukraine and employees of the Hub speak English – Alex himself speaks English almost to native level, having spent a number of years in North America.
And Kreston GCG is a very impressive firm. I’ve written to you in the past about their ambitious marketing programme, which has been responsible for an average annual growth rate of 50% for the past three years.
The firm is the 7th largest in Ukraine, and many of its team members are former Big 4.
So when you outsource to them, your work will be conducted by relatively senior members of staff rather than juniors, ensuring a high level of quality control.
The firm also uses an online platform which allows you to track the status of all work you send them, adding a layer of transparency.
Bertie Newman, Partner at Kreston PEM – the other British firm currently using the hub – has nothing but praise for it.
“It’s been really positive,” she told me. “I’ve worked with Kreston GCG in the past, so I knew that I could expect a high standard of work and professionalism – and that’s exactly what we’ve experienced.
“Everything has been delivered to an excellent standard and on time. There have been no linguistic or geographical challenges.”
Both Kreston Reeves and Kreston PEM intend to expand the number of projects they’re doing with the hub in 2021.
To me, this is a fantastic example of what we can achieve when we take an entrepreneurial approach.
It shows how much stronger we are when we use the network – by cooperating, we can all rise together!
And the timing for this initiative is exactly right.
As the economic pressures mount globally, we need to have an open mind about new business models, new sources of business and new working arrangements, in order to stay competitive.
Almost every firm already outsources certain functions – so why not this as well?
As our recent experience of remote working has shown, location matters a lot less than it used to.
- Published in Blog
By Liza Robbins.
At the height of the pandemic, a large UK bank ran a webinar about managing finances.
“The first thing that the presenter did was to ask everyone to raise their hand, to show that they could see and hear her,” says Katarzyna Grabarczyk, Kreston International’s Member Services Manager.
“The speaker said that on her first webinar, she talked through the entire event without realising that no one could hear a word she said. It was one of the worst experiences of her life.”
Putting together an outstanding webinar is pointless if things go technically wrong.
And that’s a lesson which Kat has taken to heart.
Over the past few months, she has been responsible for organising Kreston International’s online events, together with Xinxin Cusack-Huang, Member Services Executive for Asia Pacific, Middle East and North America.
The feedback for their events has been outstanding. I continually hear how engaging, slick and useful these events are.
Running a good webinar is increasingly critical in the Coronavirus era, to build relationships with both clients and leads, and to bring in new business. So today I’d like to share some of Kat and Xinxin’s secrets to success.
The key is, they organise an online event in the exact same way as they would organise a physical, in-person event.
“Some companies are treating these virtual meetings and webinars casually, as if they were just one more online meeting or a quick call,” says Kat. “But the result can be that it feels disorganised and chaotic.”
Kat and Xinxin take time to plan every detail of each webinar meticulously, so that they run smoothly.
“Most firms have great content to offer but the technical set-up and promotion are often an afterthought.
“The technical settings can be boring to go through but a webinar is an unforgiving format. If something goes wrong in a physical event, people will wait a few minutes until you’ve fixed it. On a webinar, the moment something doesn’t work, you see people make a quick exit.”
So, for example, consider whether you have the right licence for your platform. Some webinar platforms limit attendance to 100 people or limit the length of the call if you’re not on the right plan.
Other settings to consider include:
- Which features to enable – e.g. whether you will need polls or breakout rooms
- Security – e.g. whether attendees are going to be put in a waiting room before joining the meeting
- Recording – e.g. if you plan to share the recording after the event, will you show the names of your attendees?
“Don’t leave these to the last minute,” says Kat. “Look closely at your platform’s settings and create a checklist if you run webinars regularly.”
Of course, the content is critical too. Kat recommends always including audience interaction because listening passively throughout the webinar can be boring.
“You need to decide whether there will be Q&A at the end, or whether people can ask questions via chat or raise their hands. People need to participate to be engaged.”
Make sure you double-check that slides have been proofed and formatted correctly. Your attendees will be staring at the screen so any typos or amateur mistakes are highlighted.
If you have multiple presentations, ensure that they all share a similar look and feel.
To generate maximum interest, promote your webinar as early as possible.
“We tell people to save the date as soon as we have one, just like we would with a physical conference,” says Kat. “Then we feed the details through on email and social media. Some firms do this just a few days before the event, but we find that’s too late.
“It’s also important to follow up with everyone who has registered. We send out confirmation emails, some advance materials and reminders on how to join. This maximises attendance.”
And don’t assume that it will be “alright on the night”!
Our team has at least two practice runs for every online event, one internal and one with the speakers.
“Everyone needs to understand exactly what is going to happen when we’re ‘live’, so we can iron out problems in advance,” says Kat.
During the live event, they use a run-through sheet which they share with every person who has a role.
“Everyone has their tasks listed in chronological order so they know what they’re expected to do,” says Kat. “And we can see exactly what’s supposed to happen next.
“It’s time-consuming to prepare, but it is easily the most handy document we have.”
And there are always at least two technical people running the online event behind-the-scenes. It’s a lesson Kat learned the hard way…
“On my first event, I was the only technical person there,” says Kat. “It was incredibly stressful – there are some tasks that need to be done simultaneously! So now we always have a co-host on hand.”
As you can see, creating a really great webinar takes a lot of hard work. I suspect that the easier it looks, the harder the team has been working behind the scenes!
But it can pay off enormously when you deliver value to your clients, draw new leads into your circle – and grow your firm as a result.
- Published in Blog
By Liza Robbins.
Your team is preparing the accounts for a company that is struggling during COVID…
…And their CEO is pressuring them to sign off documents with which they are not completely comfortable.
They can sense that he’s desperate. His company is going through a very rough time, and its future hangs in the balance.
The problem is, it’s difficult to confront him over Zoom.
And because your entire firm is still working remotely, your team members are finding it difficult to confide with you about their doubts.
They sign off on the accounts.
A recent survey shows that 20% of ACCA and Institute of Management Accountants members have encountered a situation where ethics were at risk of compromise, as a result of COVID-19.
According to the same survey, a quarter of issues related in some way to the use of technology.
Why that’s the case, what types of challenges are most common, and what do to about them was the subject of a fascinating ACCA podcast this week. (You can access the podcast once registered – you’ll find it under the December 1 sessions.)
Robert Holland, audit partner at James Cowper Kreston in the in UK and chair of Kreston International’s Audit Quality Group, was one of the panellists. I caught up with him to find out more.
He told me that pandemic has raised the risk of ethical pitfalls for accountancy firms.
Initially there was an issue of time pressure, he told me.
“There was a risk of people making poor decisions, because they had to get things out quickly. That always exists, but it was exacerbated in the early days of the pandemic.”
And with the situation still changing so rapidly in some countries, and pressures on cash flow and profitability so high, this can still be a challenge.
A more ongoing issue is working remotely.
“When something doesn’t feel quite right, it’s much easier to mention it to a colleague if you’re standing next to them by the water cooler,” he says.
“Whereas if you’re working remotely, you have to make a call to someone to raise concerns. And that can be more uncomfortable and difficult.”
It’s also harder to maintain a healthy sense of professional scepticism when you’re working remotely – particularly for less experienced team members.
“You have to be more sceptical than ever when talking to people over video conference. But it’s so hard to read people that way! And definitely harder to confront them, especially if you have a well-established relationship.
“The accounting world is littered with scandals from the past 10, 20 or 30 years, where someone gave someone else the benefit of the doubt. That’s the increased risk here.”
A recent paper by ACCA, “Ethics in a COVID-19 World,” highlights other challenges that might arise.
Amongst other scenarios, it covers the increased risk of data theft when staff are working from home…
Pressure to increase the scope of your work beyond your competence by companies in dire straits…
And how you can be left exposed when furloughing or dismissing some of your staff, leaving you with fewer resources – and a less experienced team – than before.
Worst of all, after months of working remotely, practices which open you up to ethical compromise can become embedded in your organisation.
So do we need to come up with new ethical guidelines for a COVID-19 world, I asked Robert?
He thought not.
“We have good guidelines and excellent general principles. We just have to apply them to this particular set of circumstances.”
The key, he says, is to stay very aware of the ethical challenges you might come across.
“The continued reminders from training are essential. This is about developing the right state-of-mind and attitude.”
He recognises that “being brave” when in a difficult ethical situation is easier for senior staff than for junior staff. That’s where regulations come in – “and COVID is a good test to see how robust they are.”
He covered all this and much more on ACCA’s podcast, together with Ken Siong, Senior Technical Director at International Ethics Standards Board for Accountants (IESBA), who addressed the regulatory side.
I strongly recommend you have a listen to their lively exchange.
Just click here to access the podcast right now. (You’ll find it under the December 1 sessions.)
- Published in Blog
By Liza Robbins.
It’s become a cliché to say that these are tough times.
But if there’s one thing that’s given me joy recently, it’s been reading the responses to an email I recently sent to Kreston members pre-empting Thanksgiving, which is celebrated in America and Brazil today.
I asked what you are thankful for right now.
There was so much positivity!
What really struck me was how little mention there was of the COVID crisis.
In general, people seemed grateful for the same things they would probably be grateful for yesterday – and hopefully tomorrow.
It was the small things that seemed to count. The human touches that really enrich our lives.
Susan Li, International Business CEO at Brighture in China, made the point beautifully.
She messaged me while standing on a street corner, waiting to have lunch with a dear friend.
“The sun is shining on my shoulder from the tree and I am breathing the sweet air from the blue sky. Though it is early winter, the weather is warm and cosy,” she wrote.
“Thanks to this moment which makes me the happiest person in this world, with my beloved friend, with the beautiful day, with such a good feeling.”
The Coronavirus experience had made her even more grateful for such moments, she added. “Normal daily life” has become more special.
Many people – from Diana Komugisha in Uganda to Robson Izabel in Brazil and Andy Burczyk, in the USA – understandably said they were grateful for good health.
And several of my correspondents found their faith a source of comfort and inspiration.
“As a Christian I wake up every morning and give thanks to God for the new day and all that it may hold for me, the people I will meet along the way, the wonderful family and friends I have and a world that is full of wonder, love and kindness (though you sometimes have to look a bit deeper than the surface),” wrote Christine Newitt of Duncan & Toplis in the UK.
Indeed, almost everyone who wrote to me put their family, friends and other relationships at the top of the list of the things they were grateful for.
And the interesting thing is, that was true even in a business context!
Not one person mentioned money, promotions or anything like that.
Ivo Claeys at Kreston MDS and Nadia Van Den Neste at Kreston-VDN, both in Belgium, were both grateful for their business partners and their support, reliability and collegiality.
“We are grateful for our clients and the relationship we maintain with each of them and the loyalty they show, especially during these times,” added Yuselfy Alvarez of Kreston Alvarez & Carrasco in Panama.
“We cannot forget how thankful we are for the amazing team of professionals that walk with us day by day.”
I love the fact that several responded by saying how thankful they are to do work that feels meaningful and fulfilling. And they still enjoy improving their skills and continually learning.
Most of all, I was touched by the number of correspondents who said they were grateful to work for Kreston firms which give their teams a strong sense of purpose and value.
This is a theme I’ve returned to several times in my emails this year…
…And Andrew Pincott, Director of Business Development and Marketing at Kreston Reeves in the UK put it wonderfully:
“In 2006, I asked [someone senior] what the firm’s purpose was. His answer was, ‘To increase profits year-on-year.’ That firm no longer exists.
“I’m now grateful to work in a firm that takes a wider view of our role and purpose, and that even in these challenging times asks itself what it can do for its people’s and its communities’ welfare, not solely about its short-term financials.”
I, too, am grateful for these things – health, friends and family, supportive colleagues, a sunny day, a feeling of purpose.
I said earlier in this article that these were the “small things in life”. It’s not true.
They just seem that way! These are the main things in life.
Perhaps the drama of 2020 has simply allowed us to focus more on what is really important.
Perhaps it’s what we’ve always valued, but I belong to a nation that has never celebrated Thanksgiving… I’ve never heard it expressed quite as bluntly.
Either way, I hope that as life speeds up again in 2021 and a more rushed pace of life resumes, we can stay focused on these things that really count.
They’re the ones that bring happiness.
I wish those of you who celebrate it a joyous Thanksgiving.
- Published in Blog
By Liza Robbins.
I follow all of Kreston’s firms on social media, particularly on LinkedIn.
And recently, I noticed a marked rise in activity from Kreston Costa Rica.
I was intrigued. What led to this sudden marketing explosion?
And how is this firm – in one of Central America’s smallest countries, with a population of under 5 million – faring in the age of Coronavirus?
I was particularly interested because I attended a conference for our Latin American firms last year, in Colombia.
At the time, the firms told me they understood that Latin America was not always perceived as the most business- or investment-friendly.
But I was very taken with how eager they all were to bring their operations up to international standards and allow other Kreston firms to tap into the enormous potential in the area.
That was the story I heard when I caught up with Juan Carlos Molina, founder of Kreston Costa Rica, too.
The background to his firm is unusual.
There have been two previous firms in Costa Rica to use the Kreston name. Both lost their membership because they did not meet our expectations for a timely response to other firms and to Kreston International.
Juan Carlos had previously worked for one of those firms. And he had maintained his close relationship to other Kreston colleagues throughout Latin America.
When he set up alone in 2018, it made sense for him to do so under the Kreston umbrella.
In fact, he describes the relationship between the Latin American firms as a “fraternity”, all working together closely and instrumental to each other’s businesses.
Breaking into the local market has not been easy.
“We are a small country, and there are five big firms here which dominate everything,” he told me. “People here don’t know Kreston well. But I believe in the name and brand.
“Being able to tell clients that Kreston is the 13th largest network in the world, with a presence in over 100 countries, is very powerful. Part of my mission is to make that name better known locally.”
Meanwhile, he’s growing his firm in one of the fastest ways – through collaboration.
Juan Carlos is actually a lawyer by trade. But he has formed a strong consortium with an audit firm and an accounting firm and is currently finalising the terms of a formal merger. Together, they make a team of 20.
“It’s hard to grow organically in this market, so this is the best way to improve our position and broaden the services we offer,” he told me sensibly. “I chose firms with excellent technical ability and good experience. They’re nice people to work with too! With time we can become a one-stop firm.”
COVID, as I said, has made things much more difficult. Costa Rica’s borders have been shut for close to a year. Unemployment is close to 25%.
The firm hasn’t lost any clients, but they did reduce their rates to retain their existing client base, which is made up heavily of corporates. The hope is that when things improve, their clients will still be with them – and ready to pay full rates again.
There are some shoots of hope. Juan Carlos’s team is partially back in the office. And he sees enormous opportunities in his country and region.
“Other than the past year, Costa Rica has thriving tourism and hospitality industries – including both hotels and restaurants. And there are lots of opportunities in the medical devices industry.
“There are many international medical device companies that already have plants here and plenty of firms looking at this market, particularly from India and China.
“This is a very well-located country if you need a central American base,” Juan Carlos added. “It’s just a few hours from Panama and Nicaragua, with Mexico and America within easy reach as well.”
He’s not waiting.
Juan Carlos has completely embraced Kreston International’s more commercial agenda and is working hard to professionalise the firm.
The social media activity I noticed is part of a wider marketing drive. Kreston Costa Rica has hired a social media expert to grow their profile online.
The strategy is to explain technical issues to clients without any confusing jargon, but in a way which is understandable to them. Kreston should stay top-of-mind with prospective clients.
They are also networking heavily with professional associations, to generate more referrals.
And of course, Juan Carlos continues to foster a close relationship with his Kreston colleagues across the region, so they can refer business to each other.
His hope is that as the region – and the world – emerges from the current economic turmoil, corporations and prospective clients from further afield will see the potential in Costa Rica.
I find his energy and determination to grow the firm enormously inspiring.
Very often, we look towards the firms in our largest countries for examples of good practice. But as Juan Carlos shows, there is much for us to learn from the firms in our smallest countries, too.
- Published in Blog
By Liza Robbins.
In January 1990, a Colombian plane crashed on Long Island, New York.
It had been in a holding pattern for over an hour, due to heavy traffic over JFK airport and bad weather.
During that time, it burned up all its reserve fuel, which it could have used to divert to another airport or to land.
One at a time, its four engines failed – and eventually it crashed into a hillside, killing 73 people.
What went wrong?
In his book “Outliers”, author Malcolm Gladwell speculates that there were cultural issues at play.
The pilots were overly deferential to the air traffic controllers, and reluctant to challenge their instructions. So while they hinted that they were running out of fuel, they never said so explicitly.
He says that the same dynamic was at play in several other crashes, particularly in airlines with very hierarchical structures, where junior pilots were afraid to challenge senior pilots.
If Gladwell is correct (and not everyone agrees on this), it shows how badly things can go wrong when people at different levels of authority feel unable to speak their mind and challenge each other.
Or – as we would put it – when a firm or company doesn’t have a “consultative environment”, where all points of view are welcomed.
According to Kreston International’s Director of Quality and Professional Standards, Andrew Collier, the problem can arise if you get “senior people in the organisation who think they need to take the lead and find it challenging to talk about difficult decisions.
“Bringing more people into the conversation will give a range of views and experience, helps reduce stress and minimises the risk of poor or incorrect decisions.
“You also have cultures where asking questions may be seen as detrimental to your standing within your firm and to your progression. The result is a bad atmosphere, good people leaving, and – again – bad decisions at all levels.”
This has been an ongoing concern for regulators, which are increasingly focusing on developing a supportive “tone at the top”. So creating more consultative environments is going to become a growing conversation in our industry.
Simply declaring that “all points of view are welcome” won’t help.
Andrew cites three principles:
- Change must come from the top
- Create systems and processes which help people become more consultative – don’t just rely on people’s goodwill
- Find ways to change the conversation in the firm, so consulting becomes normalised and desirable.
Now, I’m sure that there are many Kreston firms which are doing all this very well. But I recently came across a fantastic example, which I’d like to share with you.
Chris Walklett (who also featured in my email last week) is partner in charge of Bishop Fleming’s West Midlands office, in the UK.
When I spoke to him recently, he told me that the key is to “build cultures which eliminate blame and where people can positively engage with failure.
“If mistakes are made, people should be able to talk openly about what could have been done better without fear of recrimination, so everyone can learn from each other’s mistakes.”
In tune with Andrew’s principles, teams have monthly meetings to review mistakes and discuss what can be learned as a result. Senior members of staff lead by example.
But this attitude isn’t just reserved for once a month.
“We have specifically told trainees working on assignments for the first time that they are going to be outside their comfort zone, but they mustn’t worry about getting things wrong,” Chris told me.
“All we ask is that they take ownership of their mistakes and learn from them, and share the learning outcomes with others.”
The result, he says, is that these staff members actually make fewer mistakes because they feel under less pressure.
He recently looked over a piece of work done by a junior member of staff, and sent them review points to consider in the future.
“She immediately fired off an email to the rest of the team saying, ‘This is what I got wrong and these are the areas we need to look out for’. I was very impressed! She could have kept that to herself, but she treated it as a learning opportunity for everyone.”
The approach Chris is describing – where failure is considered part of the path to success – is commonly known as “Black Box Thinking”, because in the airline industry, failure is taken seriously.
When a plane crashes, investigators examine the black box to understand what went wrong – and change procedures so that the same mistakes can never happen again.
Indeed, according to Malcolm Gladwell, some of the airlines which were plagued with safety issues in the 1990s because team members did not have the confidence to challenge their superiors made a concerted effort to change their culture. They’ve had spotless safety records ever since.
We need to make sure that Black Box Thinking – or a ‘consultative environment’ – is equally embedded in our firms.
- Published in Blog
By Liza Robbins.
It’s a bold, ambitious statement.
This month, Kreston Reeves in the UK has pledged to the world that it is going carbon-neutral by the end of 2021.
They made the announcement in their first-ever Corporate Social Responsibility Impact Report, which you may have seen on LinkedIn.
Why pick this goal now – in the midst of the Coronavirus pandemic? What has been the impact on the firm? And is this something other Kreston firms should be emulating?
I set out to find out by talking to James Peach, head of CSR at the firm, and Dan Firmager, CSR representative, who were instrumental in putting together the report.
They told me that fighting climate change was one of four United Nations Sustainable Development Goals (SDGs) which the firm had chosen to adopt – the others being “Quality Education”, “Good Health and Wellbeing” and “Reduced Inequalities”.
“CSR has changed a lot over the past five years, and we’ve really struggled to know what to focus on,” James says. “CSR touches on so many things – wellbeing, charities, the environment – and we want to do things properly, not half-heartedly.”
The Institute of Chartered Accountants in England and Wales recommended that firms focus on the UN’s SDGs. Rather than feeling restrictive, the SDGs helped Kreston Reeves form a really clear framework and focus for their CSR activities.
“We were already doing a lot of good, but it felt muddled internally,” says James. “These four headings gave us a way to talk about what we were doing in a way that was instantly understandable and relevant to people, and because they’re pretty broad, they encompass a lot!”
The demand to address climate change was already coming from staff.
“There’s a generational change in the firm,” says Dan, who is in his early twenties.
“Half our workforce are millennials or Generation Z, so we were aware that we needed to be doing this in order to keep these team members engaged. We were frequently asked what we were doing about becoming carbon neutral, and the issue came up in staff surveys as well.”
The truth is that as a professional services firm, Kreston Reeves were never great carbon emitters. Nevertheless, they do have a carbon footprint which they were determined to reduce. And they were keen to engage with and educate staff on climate change, to see if this could impact on colleagues’ actions outside the workplace.
Over the past year, they have reduced paper consumption by encouraging clients to accept scanned accounts and tax returns. Going forward, they will made double-sided printing the default. These may seem like small changes but they do have a greater impact.
They tried to reduce business travel well before COVID, introducing different video and phone conferencing platforms.
Other initiatives have included screening environmental movies for staff. And Kreston Reeves Financial Planning have been helping clients who wish to hold socially responsible investments build appropriate portfolios.
James and Dan say they are very proud of the firm’s achievements, but freely admit that there is a long way to go. They see this as an ongoing journey, and are using the UN SDGs to provide focus and accountability.
The report – in which they publicly commit to becoming carbon-neutral, and set out a series of other CSR goals for the coming year – is part of their strategy.
“We’re demonstrating our commitment and putting these issues on people’s radar. Cultural change takes a long time, so the only way to do this is to set an example and take people with you,” says Dan.
The reception to the impact report has been overwhelmingly positive, both from staff and from many contacts and potential referrers.
“People feel that we share an approach and an ethos, and want to discuss how we can help them,” James says.
Kreston Reeves has won work from clients simply by becoming a lot more vocal and open about their CSR and environmental priorities.
“Ultimately winning new business is about building relationships, and many good clients are more interested in talking about our CSR achievements than about say tax,” says James. “It creates better conversations!”
To me, this shows the importance of having a strong sense of purpose embedded in your firm.
You start attracting clients with similar values. In a competitive market, it can be a strong differentiator.
Staff become more engaged in a firm with a clear purpose, where they feel that their work is meaningful.
Finding ways to communicate this, like Kreston Reeves did, is more important than ever during COVID, when staff working from home may be feeling detached from their colleagues and from the firm’s culture.
Following our meeting, Dan used a live webinar to address a group of graduates and school leavers who were looking into a career in accounting. He made sure to mention the Kreston Reeves carbon neutral pledge to them as well.
He also found that a significant number of the questions were focussed on the firm’s CSR programme and what Kreston Reeves’ culture was like. So it’s even a good recruiting tool for the younger generation, who care about the environment a great deal.
If their example has inspired you – as I hope it has – then take a look at Kreston Reeves’ CSR Impact Report to learn more about their approach. You can download a copy here.
- Published in Blog
By Liza Robbins.
Last year, Ian Smith decided to reduce his working hours, taking off one day every fortnight.
“It’s not because I’ve got one foot in retirement – it was for my own mental wellbeing,” he says.
Ian, who is Chair of Kreston member Bishop Fleming in the UK, is the main carer for his wife, who has a degenerative brain disease. And he felt strongly that he needed regular time away from the pressures of home and work, to unwind.
He deliberately talked very openly about his decision. The reaction was overwhelmingly positive – especially from women, who are statistically four times as likely as men to have to reduce their working hours in order to care for children or even parents.
“There is a lot of pressure not to discuss these issues, and it really helped me understand the guilt that people – again, especially women – feel when they need to work part-time. And the stigma! People make so many unfair assumptions…”
The experience helped Ian with his Board responsibility for diversity and inclusion in his firm. He also used it to stimulate more debate about mental health for senior male business leaders, for whom this has been a taboo subject.
Recently, he was recognised for his efforts when he was shortlisted for Male Diversity Champion of the Year at the 2020 Women in Accountancy and Finance Awards in the UK.
Although on this occasion he wasn’t the winner (he was “Highly Commended” by the judges), he has an important message about how to make our firms stronger by making them more open and welcoming. So I reached out Ian to discuss his experiences.
“Diversity is critical for every business,” he told me.
Part of the challenge of the profession – in Western countries, at least – is “that there are a lot of people like me in charge – white, of an age and often from a very privileged position,” he says. Of course in other countries, other groups may be entrenched at the top.
“You need more diversity to build teams with different ways of thinking.”
He includes in this gender and sexual orientation as well as disability, educational and economic background and even personality types.
“That’s diversity in its fullest sense.”
Ian adds that “our clients don’t want clones… They want people to bring their real authentic personalities to bear when we deal with them. And people can only do that if they’re comfortable that we’re really happy for them to be themselves.”
That’s why, over the past few years, he helped set up a women’s mentoring network in Bishop Fleming.
The firm made improvements to the firm’s maternity pay.
And they also reviewed the firm’s interviewing and recruitment process, to reduce the impact of unconscious bias – that is, stereotypes held against certain groups without even being aware of it.
They made the interviewing panels more diverse, and changed the language in some job ads to be more inclusive, and show openness to part-time and flexible work.
Recently, Bright Futures – their personal development programme for young managers – has focused on social mobility. Bishop Fleming are one of the UK’s leading auditors in the education sector, “and we want to support people with different backgrounds coming into the profession,” says Ian.
The impact on the firm has been significant.
“We’ve got more female partners than we had before, and a dialogue that wasn’t happening before,” says Ian. “We also have more people working part-time in senior positions – I don’t think some would have been confident trying this previously.”
“The atmosphere is more creative than before, and some of our best client relationships are being developed by women who may not have advanced as far a decade ago, under older ways of working. Our clients love it.”
His role became possible when he became Chair in 2017.
Ian says that some people “were surprised” when he made diversity a personal priority, but leadership on this issue has to come from the top.
“It’s nearly always the HR director who’s leading. I could count on the fingers of one hand the number of times I’ve met a chief executive or managing partner at diversity seminars and workshops – and that’s wrong. To make this work, you need buy-in at the highest level.”
He emphasises that he did none of the work alone. He sees his role as supporting and sponsoring initiatives for which there is already grassroots demand, and supporting a really professional and creative People Team.
Some may find it ironic that it has taken a man to lead the agenda for women’s equality. Ian is unapologetic.
“I am who I am and I can’t help the position I have found myself in,” says Ian. “I see my role as facilitating other people so it’s not a 60-year-old white male who has to do this in the future.
“I do what I can to help people using my privileged position, and if I can make a difference, I won’t beat myself up for that.”
And this visionary implores other leaders to overcome “ingrained habits”, and recognise that even if your firm is very successful, increasing diversity is an opportunity to “make us a much better place to work.”
Amen to that!
- Published in Blog
By Liza Robbins.
Today I’d like to congratulate Kreston RM SA in Colombia…
Last month, they won a significant contract to become the statutory auditors for the local arm of an enormous international shipping group.
It’s an inspiring example of how you can use your Kreston network to drive new business for your firm…
…Not just through referrals – but in other ways as well.
Kreston RM SA’s story started in early 2020, when their business centre noticed the shipping company had put out a tender for their statutory audit.
“We’ve been establishing ourselves in the transportation sector, so this was a great opportunity for us,” says Natalia Mora, International Relations Manager. “Winning it would also allow us to approach similar companies in Colombia and neighbouring countries.”
And of course, it was a sizable contract in its own right.
There was just one problem…
Whilst Kreston RM SA had extensive experience in transportation, they were missing experience in shipping.
And without that, they could never win the tender.
That’s when Natalia reached out to us at Kreston HQ, so we could put her in touch with other Kreston firms with relevant experience.
Before she knew it, replies were streaming in from around the globe – from Chile, Mexico and Puerto Rico to Singapore, China, Greece and the UK. And each firm shared with her the details of the work they’d done, allowing Kreston RM to demonstrate the breadth and depth of the experience Kreston has in this area.
Unfortunately, that’s when the COVID pandemic took hold – so the tender process stretched into an 8-month saga!
But recently, they were told that they won the contract…
…And Natalia and her team have no doubt: “It was because we could demonstrate better and more experience than our competitors.”
Not just that, but one of the Kreston firms which got in touch had actually worked with subsidiaries of the shipping company before – which undoubtedly made the bid even more credible.
Over the past few days, many of the Kreston firms which helped Natalia with their pitch have been in touch again, to offer any help they need once the work begins. She has no doubt that she’ll draw on their expertise.
It really shows the value of belonging to an international network, doesn’t it?
And it shows the value of knowing people in that network too.
You see, those Kreston firms in those other countries (or in other parts of your country) aren’t just loosely connected to you through a shared name…
They’re not just nice people to meet up with once or twice a year, at conferences.
We all come under one big umbrella.
Their contacts are yours, to connect with and do business with… Their experience is yours, to use in your pitches… Their expertise is yours, to draw on.
And vice versa!
The more we see ourselves as one entity, and the more we use our network, the faster we’ll all grow – together.
- Published in Blog
By Liza Robbins.
What’s the value of a Kreston membership?
Sheji Valiyakath, the Managing Partner at Kreston SVP Chartered Accountants in Qatar, is clear.
In the 18 months since his firm joined our network, “we’ve grown by at least a third,” he says – “and it is because of the Kreston brand”
The truth is that the entire story of this young, ambitious firm is, one of rapid growth. Not only is there much other firms can learn from, but there are many opportunities for cooperation as well.
Today, the firm has three partners, a senior director and 27 other staff members – but Sheji established Kreston SVP just six years ago.
“I was the Finance Director of a large listed group of companies, but I always had a passion to start an audit firm,” he told me. “You have to chase your dream!”
Even though he was starting from scratch, he did have one enormous advantage: He is a prolific networker.
He was already the past chairman of the local branch of The Institute of Chartered Accountants of India – the youngest ever, at 33 – and he could leverage many of those relationships into new business.
For the same reason, he chose to join an association of accountancy firms, but he soon found that he outgrew it.
“The projects we were bidding on were always comparing us to the Big 4. They wanted to work with international firms, and we realised we needed to be part of a network, not an association.”
He joined Kreston in 2018 after diligent research showed him that Kreston “has a good future.”
As well as allowing SVP to approach bigger clients, the Kreston membership opened up whole new markets. SVP was able to join the Qatar Financial Centre, giving them access to 700 international firms listed there.
Around the same time, Qatar Petroleum started a new programme, awarding suppliers in Qatar’s giant energy industry In Country Value certificates that give them an advantage in winning contracts.
The Kreston membership allowed SVP to become one of just 12 auditors qualified to award these ICV certificates along with Big4.
And Sheji made the most of this opportunity.
“Everyone else waited for projects to be finalised, but we started approaching potential clients first. We started training and marketing and advising companies what’s coming, being very proactive. We’re now the leading ICV certifier in the country.”
And of course, the Kreston membership has also allowed them to do business with other Kreston firms – particularly in the Gulf. Sheji would welcome more cooperation with Kreston firms around the world.
“We can help you bring clients to Qatar. There is a really exciting business atmosphere in Qatar, even in the Coronavirus environment,” says Sheji. His team are now all back working from the office.
Qatar is a leading exporter of natural gas – and Sheji says that the government is working hard on growing the country’s energy sector. This is, of course, key for SVP – which also has niches in trading, hospitality, education, and construction.
Qatar is going to be hosting the 2022 FIFA World Cup, which has led to a building boom which Sheji expects to continue well beyond the competition.
The Qatar National Vision 2030 plan – which outlines the government’s development goals and strategy – “will help Qatar boom at least for another 10 years,” says Sheji.
And Kreston SVP will be riding that wave.
As their client base has grown, Kreston SVP has expanded from audit only to include services like business consulting, valuation & due diligence, M&A, taxation services and recently transfer pricing.
Sheji has turned his passion for networking into a company-wide strategy for growth.
“We’ve joined almost every business network and business council available,” he says. “This is a small country, and so making strong connections counts for a lot.
“I believe that when we’re earning from the community, we have to give to the community too, so our employees are highly active in community services and in sports events. We’ve also become very active in sponsorship.
“It all makes us very visible and helps the business grow – you don’t have to ask for the business, people see you and come to you.”
This also helps with staff retention.
“Most of our staff have been with us for several years,” he says. “They like being part of a growing company. If we’re growing, they’re growing too.”
His next move is to become listed with the Qatar Financial Authority, which will allow them to help businesses listed on the Qatar exchange.
Ultimately, he says, they aim to become “a leading company” in Qatar. And I don’t doubt they’ll do it.
To talk to Sheji about opportunities in Qatar and potential work together, please contact him via the Kommunity platform.
- Published in Blog
By Liza Robbins.
Your employee is working hard from home.
The standard of work they do is excellent.
The problem is, they rarely see their manager face-to-face any more, even though they exchange lots of emails and attend team meetings online.
And those Microsoft Teams meetings? This employee feels like they’re always talking over everyone else, so they stay quiet…
They start to worry: Does out of sight mean out of mind?
How are they ever going to progress their career, while working from home?
In some firms – all promotions have been halted for now.
But even under those circumstances, staff will want to feel that their career is not at a standstill.
In other places, promotions are going ahead as normal, and some employees may feel that their immediate prospects are harmed by working remotely.
So what can we, as good employers, do to help?
To find out, I reached out to Megan Wortham Murdock, National Learning & Development Senior Manager, and Phil Zaman, Director of Learning and Development, Financial Services – both at CBIZ, Kreston’s firm in the USA.
They run an extensive Career Advisor Program, which was launched last year and has been rolled out to most CBIZ offices.
It’s in the interests of your firm to be proactive about this issue, says Megan, because when you help employees develop their career, they are more likely to be engaged and to stay loyal to you, improving your retention rates.
“It also helps you develop a strong succession pipeline,” she adds. “As partner or an upper-level manager, you should always think about training and fostering your replacement. It’s not billable time, but it’s about growing your practice in a different way.”
During Coronavirus, when your teams are feeling more vulnerable and detached, this is part of showing your team strong leadership.
The trend they’re seeing, says Phil, is that employees who were strong communicators before Coronavirus are still managing their own careers effectively. The challenge is amongst more introverted employees.
“In the office, there are lots of opportunities to just bump into people informally, at which point you can ask them anything that’s on your mind. Coaching and career progression can happen organically.
“When you’re not physically together, you lose some of that. Just grabbing people for lunch doesn’t happen. So we need to engineer opportunities for outreach.”
Both Phil and Megan emphasise that employees have a responsibility to take ownership of their own careers – even if that feels emotionally uncomfortable.
But leaders can help, they say, with a formal career advisor programme.
“That helps give structure around something which may or may not be happening organically,” says Megan. “High-growth employees are seeking out this help regardless, but a career advisor program allows for fewer people to fall through the cracks.”
In their programme, staff are each assigned an advisor, with whom they meet on a monthly or quarterly basis.
And both parties are properly trained about how to make the relationship effective.
“We teach advisors about best practice, the expectations of the role, and give them ‘talk tracks’ so they can develop specific, useful conversations with their advisee,” says Megan.
“But we also train the advisee on how to take a more proactive role and seek their own opportunities for development. This is an equal partnership!”
The meetings are never ‘informal chats’, but have a specific purpose – like developing a training plan, annual development or performance goals, conducting performance reviews or debriefing training sessions.
“Setting clear goals is key to success,” says Megan.
Another key to success is accountability.
“Someone has to make sure that these meetings are happening, and that the advisors and advisees are not just talking about sports but actually doing valuable work,” says Phil. “We empower local HR professionals to keep tabs on this, and call people out if it’s not happening.”
If you don’t have such a programme already in place, now seems like a good time to start thinking about it.
And if that feels beyond your reach right now, please do think about how you can do more to support your team’s career development during this time. Helping staff members achieve their full potential is critical to stay competitive.
- Published in Blog
By Liza Robbins.
Last week, two Kreston firms became the first ever to exchange referrals on Kommunity, our brand-new platform.
Those firms were Kreston IL from Israel, and Kreston Menon from the United Arab Emirates.
It was less than a week since their two countries had signed the Abraham Accords peace agreement at the White House…
…normalising the relationship between them after decades without diplomatic or trade relations.
We couldn’t have had a better, or more hopeful, beginning!
And I’m proud that our firms wasted absolutely no time before they started doing business together – because that’s what our network is all about.
By the time I caught up with Doron Rozenblum, Managing Partner of Kreston IL, and Sudhir Kumar, Partner at Kreston Menon, earlier this week, the two seemed like old friends.
They were busy chatting about their plans to visit each other, the moment COVID restrictions allowed (“I’m a foodie, I’m looking forward to trying traditional, Kosher food,” says Sudhir).
And Sudhir had even learned a few words in Hebrew (“I used to say ‘Shukran’, now I say ‘Todah rabah’,” he laughs – referring to the Arabic and Hebrew terms for ‘Thank you’).
Both say that their fellow citizens are buzzing with enthusiasm for the peace accords.
“No one has had much good news recently, especially with COVID-19,” says Doron, “so this is very welcome. Israelis love to travel so there is a lot of excitement over this agreement.”
And Sudhir says that the accords were “treated with happiness. Over a period of years, people wondered, why couldn’t we have a relationship with Israel? It feels like a new era of prosperity, confidence and energy.”
Much of this, of course, is tied up with the new business opportunities washing across the region.
Over the past few days alone, a major Dubai conglomerate, the Habtoor Group, announced that it is opening an Israeli office, and Emirates, Etihad Airways, El Al and Israir are all either launching flights between the two countries or are in the process of seeking approval.
The state-run Abu Dhabi Investment Office is similarly opening up a branch in Tel Aviv, and two Israeli banks have already signed memorandums of understanding with Dubai counterparts, to help the two countries trade smoothly.
And that is just the very tip of the iceberg…
The two men expect enormous bilateral investment in everything from agriculture and inland fishing to cybersecurity and diamonds.
“The world’s first Artificial Intelligence university is in Abu Dhabi,” notes Sudhir, adding that Israel is renowned for its hi-tech industry – so there is a natural synergy.
“There’s going to be a lot of opportunities in financial services,” adds Doron, “including in Islamic finance which doesn’t exist in Israel, but of course there is an enormous market.” (Just over 20% of Israeli citizens are Muslims.)
In addition to the bilateral investment, they expect the peace treaty to open the doors to enormous investment from other countries.
“When the region is more stable, it’s good for business,” says Sudhir. “Major companies will spend more money here because we’re providing a security net for the region.”
He envisages that this will add value to the existing $95 billion UAE-India trade corridor, and create a new, high-value business corridor covering Israel, UAE and India – which is a good friend to both countries.
And he notes that many companies which previously had to choose between doing business in Israel and the UAE can now do both, because the treaty formally ended UAE’s participation in the Arab League boycott of Israel.
The speed at which all this is happening seems astonishing…
Doron says that there is already another Israeli Doron Rosenblum doing business in the UAE, and he’s already been forced to clarify that they are not the same person – they spell their last name differently!
He says that this can happen fast because there was already business taking place between the two peoples before the treaty, “under the radar.”
“There’s no big difference between the Israeli and UAE people,” he says. “In the end, we’re related – maybe cousins. We’ve always got on well in the international committees that I’m part of.
“But we needed the politicians to lift the formal barriers between us, to allow us to do business openly.”
Kreston Menon, for its part, already has not one but three brochures written in Hebrew for prospective Israeli partners.
And Kreston IL has initiated a 3-hour Zoom conference, for prominent Israeli and UAE CEOs to meet each other, learn about each other – and network.
Kreston Menon’s logo “will be everywhere” on the call, Doron says. “I want our Israeli companies to know that if they need to do any business in UAE, they now have Sudhir and can reach out.”
Kreston’s other Israeli firm, Joseph Lipsky & Co, has similarly reached out to Kreston Menon and Kreston Awni Farsakh & Co, our other firm in UAE.
All this shows just how important it is for Kreston firms to look beyond their country’s borders for opportunities – because there are many…
…and how much there is to gain when we work together.
So if you think you might have an opportunity in either country, please do contact Doron or Sudhir – their contact details are on Kommunity!
Just don’t wait too long…
As this story shows, in today’s world, speed is of the essence. The opportunities are there, but they are easiest to grab when you are fast and agile.
The good news is that there soon may be even more business opportunities…
Rumours abound that Israel is about to sign more peace treaties with other Arab states.
Doron, for his part, isn’t waiting…
“I’ve reached out to acquaintances in Oman, and said, ‘let’s start doing business’. We can be the first ones….”
- Published in Blog
By Liza Robbins.
September is the month when Kreston Partnership in Brazil normally looks at each staff member’s work and productivity over the previous year…
…And decides on bonuses.
“This year it’s very difficult to increase anyone’s salary,” says co-founder Cesar Ramos. “Even though we haven’t lost any clients, we can’t increase our fees either.”
So how can they show staff that they appreciate them, and reward their efforts?
It’s a dilemma that they have in common with many other firms – both those whose employees are largely still working remotely (as is the case with Kreston Partnership) and those where staff have started to return to the office.
Just because times are tough all round, you can’t assume employees will simply be grateful to have jobs.
Despite the circumstances, people still expect acknowledgement and opportunities at work.
And from your firm’s point of view, it’s more important than ever to provide that for them, because when staff are working remotely or under stress, it is easier for them to become detached and disaffected…
…And there’s no way that’s good for business.
That’s why I spoke both to Cesar and to Martin Hommersom, partner at Van Herwijnen Kreston in Holland, to find out what new benefits they were offering.
I discovered that on the whole, they were making gestures to their entire body of staff rather than to individuals or specific teams, but of course both are legitimate.
The following is a combination of some of their best practice, and some of my own ideas….
- Give employees an allowance for working at home. You may not be able to give them a proper raise, but you can help staff cover work-related costs they incur whilst working remotely.
That’s what both Kreston Partnership and Van Herwijnen Kreston are doing.
“It’s a small amount each day, but they’re not drinking coffee in the office – so we give them that money to buy their coffee at home instead,” says Martin.
Kreston Partnership is going further, covering Internet use and even some food bills.
“It’s not a salary – it’s a bonus to help them work efficiently in their own environment,” says Cesar.
I think this is a good way of showing staff that you do not take their work for granted. And when deciding on bonuses for staff, it makes sense to consider both what they might like and what might help your firm.
After all, this is an investment on your part, towards your firm’s future.
On that note….
- …Give employees perks to improve their workspace at home. Consider investing in staff’s home workspaces directly. Do they need new desks? Office chairs? A new laptop case?
Kreston Partnership actually offers employees both the cash and help adapting their space at home for work use.
And Van Herwijnen Kreston has sent employees flowers and balloons directly to their homes. Wouldn’t you work better with that kind of thoughtful gift on your desk?
- Give staff who are working remotely rewards that help them keep their home environment running smoothly.
For example, just like you pay for a cleaner to clean your office space, you might pay for a cleaning service for their home once in a while…
…Or rather than taking staff out to a meal, have a meal delivered to them at home.
They might even appreciate some yoga or exercise equipment to enhance their mental wellbeing!
- Recognise individuals through company channels. If a staff member has done good work, acknowledge them publicly.
You may not have in-person staff meetings at the moment, but hopefully your team is still meeting online… So give individual shout-outs.
You can also mention accomplishments on your internal emails and communication channels (like MS Teams, WhatsApp or Slack), and leave appreciative comments on your staff’s LinkedIn profiles.
- Give staff new opportunities for professional development. Even when you can’t give staff members more money or a promotion, you can help them develop their knowledge and skills, preparing them to advance their careers further down the line. They don’t want to feel like they’re standing still!
This may be the chance of a different role, the opportunity to take part in a mentorship programme or selecting them for additional training.
I’ll be expanding on this next week, so watch out for that email!
- Where possible, take teams out together. This one very much depends on your local social distancing regulations… If you’re allowed to, why not teams out for a lunch or dinner – or another celebratory event?
Martin Hommersom’s firm recently hosted groups of up to 15 employees in a local bookstore. Not only could they enjoy time together, they each got to choose a book which the firm paid for.
“It was great to motivate people,” he says. “And it was also good for the local bookstore…”
- Ask employees what perks they want. Not sure what your employees might like as a reward or benefit? Ask them directly. You’ll probably be surprised at what they come up with… And you’ll get them something they really appreciate.
Finally, don’t be afraid to be playful…
I loved Martin’s description of the package they sent employees this summer…
“It included a little deck chair, binoculars – and a few lines about the binoculars, and how hopefully we call look forward to a future without COVID-19.”
Amen to that!
- Published in Blog
By Liza Robbins.
One of your clients, a family-owned hotel group, is preparing for an IPO.
You’re thrilled at the opportunity (and thrilled that the IPO might finally end an internal war amongst the hotel owners regarding its future)…
But then you discover that the hotel’s FD is pursuing an aggressive tax relief claim championed by a separate specialist tax firm.
At the same time, they’re undertaking their first international hotel development…
And just to complicate matters even further, one of your staff members posts an image on social media which, inadvertently, tips off the media that the hotel is preparing to list.
How would you handle these situations – navigating the conflicts within a family-owned company, and the difficult transition to become a listed entity?
How would you manage your staff member who by mistake breached confidentiality, and help your clients deal with expert tax advice you believe is wrong?
These are just some of the questions posed by Without Question, an outstanding video created by the Institute of Chartered Accountants in England and Wales (ICAEW) to train accounting partners and staff, and available to Kreston members at no charge.
A second video, False Assurance, deals with an audit team which failed to identify and investigate key problems at a tech company whose CEO, it is ultimately revealed, was corrupt.
Both videos are filmed as dramas, with well-known actors – making them particularly engaging. And they are both subtitled or dubbed in over 20 languages, so they are widely accessible.
Showing these films to your team is a wonderful way to develop their soft skills, and launch a discussion – without pressure – about issues such as risk management, professional scepticism, effective audit leadership, supervision and more.
You could do this in a workshop environment, or ask your audit partners and team to watch it independently and hold an informal discussion later.
But I also encourage you to show the movies to your entire workforce, not just to those in audit.
That’s what we did here at Kreston HQ recently.
Obviously, none of us are auditors other than Andrew Collier, our Director of Quality and Professional Standards. Yet we all work day in, day out with accountants…
We know a thing or two about how your world works!
And yet, it was still an illuminating experience.
“It helped me understand the level of responsibility accountants have,” Hana Ball, our Content Marketing Manager, said afterwards – reflecting the high stakes for the companies and individuals in both movies.
And Xinxin Cusack-Huang from Member Services added, “This opened a huge door… It really increased my respect for accountants and auditors… Not only the huge amount of work they do, but the project management and the need to understand what’s going on in the companies they audit, finding evidence and piecing it together.”
This is important for several reasons…
The movies helped give our team an insight into the stakeholders they work with – both their mentality and the pressures they are under. This will inevitably help them do their jobs better.
In addition, you’ve probably heard me mention before just how important it is for every member of staff in your firm to feel a strong sense of purpose at work.
When people understand why they’re being asked to do their job… and can see the greater meaning in their work and how they’re contributing to something significant… It’s enormously motivating.
These training videos do exactly that, helping to shed light on how accountants’ work – and by extension, the work of everyone supporting them – is essential for our economy, and indeed civil society, to run smoothly.
“It doesn’t change what we do, but the films made it more understandable,” says Katarzyna Grabarczyk, Member Services Manager. “It puts it in context.”
Xinxin Cusack-Huang added that one of the tasks handled by Kreston HQ is to conduct independence checks when Kreston firms take on new work. Conflict-of-interest was a key theme in False Assurance.
“By watching the film, I understood just how bad the damage could be if the independence check wasn’t carried out well,” she says. “It really brought it home just how serious the consequences could be, or if firms fail to request that such a check should be performed.”
And I was pleased to hear that everyone who watched these videos came away with new enthusiasm for creating clear, efficient systems and processes – always a top priority for me!
I’m absolutely certain that these training videos can be similarly thought-provoking and insightful for your own team – both in audit and beyond.
Getting hold of them couldn’t be easier.
- Published in Blog
By Liza Robbins.
Over the past few months, so many people have struggled with remote working.
It’s been difficult to maintain friendly ties with people in the office. When you only meet online, there’s very little chit-chat.
It’s more difficult to know what’s really going on in the firm and to collaborate really effectively with your colleagues.
Now imagine how much harder it would be if you weren’t an established team member…
…But a brand-new employee, who had no pre-existing ties to your office or to your team.
How would you get to know your peers at work? How would you familiarise yourself with company culture… Get to grips with the firm’s systems and processes… Or even ask questions easily?
You would probably feel lost for a long time – and much more isolated, and more of an outsider, than normal.
It’s a challenge many of our firms are grappling with right now.
There’s no question that like companies the world over, many are carefully considering their resources, and have had to put staff on furlough or even, sadly, make redundancies.
But at the same time, in many firms, recruitment hasn’t halted entirely. Many are welcoming a student intake right now.
For others, the war for talent has taken a surprising turn…
I spoke to one Kreston firm recently which told me that the Big 4 were laying off good people right now – and they were snapping them up!
But if you’re lucky enough to be welcoming new staff right now, how do you onboard them, if much of your work still takes place remotely?
Here are my suggestions, to add to your normal induction process. Many of them make sense in ‘normal’ times as well…
1. Kick off the induction process before they start. Now, more than ever, your new recruits are going to be nervous before taking up their new positions – for all the reasons I outlined above!
Use the period after they have signed their contract, but before their first day, to make your new recruits feel welcome in your team, build up their excitement and reassure them that they have made a fantastic choice.
Send them a “Welcome pack” with a personal welcome from the managing partners and an introduction to their line manager and team.
It could also include useful information about your firm and its client base – and a schedule for their first few days at work, so they know what to expect.
Make sure their line manager sends them occasional updates about company or team successes (without breaching confidentiality).
Not only will this help them feel included, it will give them something to talk about with colleagues when they start.
Finally, brief their new team about your new hire ahead of time.
Integrating a new employee is going to be a team effort… Make sure everyone is ready to play their part from Day 1.
2. Hold Day 1 in the office – if possible. Many countries are now allowing (or even encouraging) some staff members to work from the office.
If that applies to you, try to bring your new employee into the office for their first day, so they can get a physical sense of the place and meet at least some colleagues in person.
This will give them a more solid connection to your team and also, perhaps, a sense of what work life might look like for them, once you move away from remote working.
Since onboarding a new team member is so challenging to do remotely, if you are allowing some staff to work from your office, see if you can give new employees priority for this.
3. Organise introductions. Your new employee needs to get to know their colleagues quickly – and you can’t leave this to chance.
Organise a team introduction over Microsoft Teams or Zoom, and then schedule personal online meetings with key team members over their first week.
And encourage your staff to reach out to their new colleague once in a while, just to find out how they’re doing and get to know them more personally.
It’s difficult to recreate those “water cooler moments” when people casually talk as they pass each other in the office – but we must try.
4. Develop their 30-day plan. New employees working remotely will need even more structure and guidance than normal, not just over their first days but over their first month and quarter.
Remember they don’t know your firm – or how you work – at all, and this can be hard to absorb online!
I suggest a 30-day plan, which gradually immerses them in your world – introducing them to their colleagues, the tech they’re going to need to do their work, your systems and processes, and of course your clients.
Plus, set out clear objectives for them during this period, so they have a clear understanding of what’s expected from them.
Their plan should include frequent meetings with their line-manager to check in with them, answer their questions and offer feedback.
A “buddy” or mentor they can turn to easily with questions might be useful too.
Of course, new employees’ induction can easily last more than 30 days – it’s just difficult to plan much further in the current climate. So repeat as necessary.
- Published in Blog
By Liza Robbins.
Have you ever seen the Lion King musical?
It’s a wonderful, fresh take on the Disney cartoon of the same name…
…The tale of Simba, a young lion cub whose father, the king of the pride, is murdered by his wicked uncle, Scar. After several years of exile, Simba returns to reclaim his throne…
What many people don’t realize is that Disney’s Lion King isn’t an original story at all.
It’s actually a modern retelling of Shakespeare’s Hamlet – the story of the prince of Denmark, whose father the king is murdered by his wicked uncle, Claudius. (Sound familiar?)
But Shakespeare didn’t dream up this story all on his own, either…
He based it on a Norse legend. There were several printed versions of it circulating well before Shakespeare’s time, and it seems likely that the Bard got his hands on one of them.
So you can see how over the centuries, it was completely normal for playwrights to take each other’s ideas, and give them their own twist.
They never believed that everything has to be completely original…
It makes sense to take good material and find new ways to use it!
We do the same thing in modern marketing – possibly taking the concept even further…
…Not just recycling ideas – but taking whole pieces of content and just putting them into a new format.
So, for example, after I’ve published this article, our team at Kreston HQ will turn it into an email, and then into several social media updates.
And if I really had time, I could take my emails and turn them into videos as well!
Lots of companies do this the other way round…
They start with the videos, then get them transcribed and turn them into blogs, and finally email them out to their followers.
It’s called “repurposing.”
And we do this because when you have limited resources – a small marketing department, or perhaps no marketing department at all…
…You need to find new ways to use old or existing material.
And when you’ve published good things, you need to make the most of them!
You see, there’s nothing that says that every piece of marketing you produce has to be completely original.
Great pieces of art often aren’t – as I just showed you.
And when it comes to generating leads, trying to create every piece of marketing material from scratch will limit the amount you are able to publish, and the frequency.
It can become a stumbling block and is just not an efficient way to work.
The good news is that, as a Kreston firm, you have an easy way to “repurpose” marketing material.
Kreston HQ produces numerous newsletters for our member firms, full of outstanding technical updates and thought leadership pieces…
…Like our International Tax newsletter, our Transfer Pricing updates, VAT News, Technology bulletin – and more.
You can see many recent examples on our website – just click here.
We publish these to keep you up-to-date…
…But there is absolutely no reason why you can’t take a lot of the material in these publications, and re-use them in some way in your own marketing.
Take the ideas, and build on them.
Or even easier – Stick your own logo on some of the articles, and circulate it to your own leads and existing clients.
Or turn these pieces into useful digests!
We also have a training brochure rich with resources, covering audit, financial reporting and other topics.
It’s updated every single month.
While you can’t repurpose content created by organisations outside the Kreston network, you’ll find a lot of material created by our own staff, which is completely free to access…
…And which again, you could be repurposing for your own marketing.
There’s simply no need to constantly re-invent the wheel…
You’ll be able to reach a lot more people, and give them a lot more value, by repurposing!
If Shakespeare can do it, so can we.
- Published in Blog
By Liza Robbins.
One day in the far future, when I look back on this strange Coronavirus summer, I’ll probably associate it with one thing…
Over the past few months, I’ve spent a lot of my free time immersing myself in some of the world’s finest books…
I love reading!
So today I want to do something different to my normal weekly article…
…And tell you about some books I’ve particularly enjoyed recently.
Since I know that many of my colleagues have been reading heavily recent too, I’ve asked Andrew Collier, Kreston’s Director of Quality and Professional Standards, and Marc Charlton, our Strategic Marketing Director, to contribute their own recent favourites.
I hope that our short list will inspire you…
- Eggs or Anarchy: The remarkable story of the man tasked with the impossible: To feed a nation at warby William Sitwell.
I bought this book a few weeks after one of my brothers returned from Cuba, where he had been on an educational mission. He told me about supermarkets with empty shelves and we noted how lucky we were to live in a land of plenty.
A few weeks later, COVID-19 hit and I was faced with empty food shelves in my local London supermarket.
It’s no wonder, then, that this unusual book resonated in ways I would never have imagined just one year ago.
Eggs or Anarchy is the fascinating story of Lord Woolton, who was appointed Britain’s Minister for Food in 1940, and given the job of securing food supplies and establishing food rationing.
He knew that if he could not ensure a consistent supply of food, there would be unrest – or even rebellion – on the streets.
Woolton managed this challenge through a mixture of sheer determination and incredible entrepreneurship, from which there is much to learn. And not only did he stop people from starving, he even managed to improve Britain’s health.
This is a beautifully written account, by food critic William Sitwell. Reading it served as a valuable reminder that pressure on our supply chains is nothing new; we faced empty shelves in recent history. How quickly we forget.
- Mythos: The Greek Myths Retold by Stephen Fry. One of Britain’s best-known comedians retells the Ancient Greek myths in an easy, accessible and enjoyable way.
I love the stories of the Greek gods (I love Greece too!) – they have different powers, and while they must be respected they are often fickle, unkind and keen on revenge.
Fry is a natural story-teller. He also goes to great lengths to explain some of the linguistic impact the myths had on the English language – for example the origin of the words “geology”, “geography” and “echo” or the phrase “The Midas Touch”. I found it riveting!
- Everyday Sexism by Laura Bates.
As the #MeToo and #BlackLivesMatter movements have become prominent, many of us have become conscious of how little we understand or know about sexism and racism.
I was given this book by daughter, who is her 20s. It delves deeply into the everyday sexism faced by women in the workplace and as they go about their normal lives, sharing powerful anecdotes and statistics.
I always thought I was sensitive to the challenges faced by women in the workplace. But this book has truly opened my eyes to examples of prejudice which – like many men – I’d never seen or appreciated before.
After reading it, I’ve become more aware of the language I use and of the unconscious bias I might be displaying – and as we move back into an office environment, I hope it’s made me better equipped to challenge sexism where I come across it.
Recommended for anyone who cares about creating a more equal, diverse workplace and world.
- Search Inside Yourself: Increase Productivity, Creativity and Happinessby Chade-Meng Tan.
Chade-Meng Tan was one of Google’s first engineers, who worked on Google’s first mobile search service.
He also formerly taught Google employees how to apply mindfulness techniques in the office, as well as how to become happier, healthier and more creative.
In this very readable book, which has become a huge best-seller, Tan teaches the fundamental principles of emotional intelligence, showing you how to achieve inner peace whilst becoming more successful.
I loved the way this self-styled ‘personal growth pioneer’ combines the pace and innovation of Google with elements of ancient Buddhist philosophy. A must-read for this stressful era!
….AND ONE COMBINED RECOMMENDATION FROM ANDREW AND MARC
When I asked Andrew and Marc what fiction they had enjoyed recently, I was amused that they both gave the same answer…
- Harry Potter: The Complete Collection by J.K. Rowling.
Andrew says: “I re-watched the films during lockdown, so I thought it would be fun to revisit the books as well – I remember reading them to my children when they were young!
“Although they’re just a fun read, they do highlight the importance of good friends, especially when times are tough…”
Marc says: “Trying to get my two boys to read can be a struggle, but Harry Potter is one thing they are both happy to listen to. So every night for the last year, I’ve dashed from one room to another to read with them.
“One day my 7-year-old asked me why I hadn’t read the books myself before and I didn’t really have an answer – so I started reading them for myself. Never mind that I know all the plot twists, they are still hugely enjoyable!”
- Published in Blog
By Liza Robbins.
“We always advised clients never to have a joint managing director… Then we went and did it,” laughed Lisa Leighton.
For the past 15 months, she has been co-managing partner of BHP Chartered Accountants, one of the UK’s Kreston firms, together with Hamish Morrison.
After speaking to her recently about conducting remote audits end-to-end, I became curious about this unusual arrangement.
How does it work? What are the advantages and disadvantages? And is this a model other Kreston firms should consider?
But what really piqued my curiosity is that three months ago, another Kreston firm in the UK, James Cowper Kreston, entered into the same arrangement. So I spoke to those co-managing partners, Sue Staunton and Alex Peal, as well.
What I discovered is that in both cases, they consider the model a great success.
Lisa and Hamish came up with the idea because the firm had recently grown from a local to regional practice, employing 350 staff members in 5 offices.
“The role was far more demanding than it had been just a decade earlier – it’s a huge amount of responsibility,” says Lisa. “By sharing it, we could give the firm all the attention it needed, while continuing with the client duties we were trained for and which we love.”
Similarly, most people expected Sue and Alex to stand against each other for the role, but they felt that “working together was in the best interest of their firm.”
In both cases the two partners had a long history of working together before, and not only knew each other well, but felt they had an excellent working relationship.
It’s clear that this is absolutely critical in making the arrangement work, because they are not rivals but genuine partners.
“Neither of us came to this because of our egos,” says Sue. “We’ve known each other for a very long time and felt we could add something to the business. It’s not about either of us fighting for pre-eminence.”
They both came up with informal divisions of labour, with Lisa looking after compliance and tax, and Hamish responsible for advisory services; while Sue is in charge of strategic areas, and Alex of the operation side.
In practice, the lines are more blurry, with key issues decided jointly and staff members approaching whoever is available or whoever seems to have the relevant skill set.
Getting staff on board was one of the challenges. Both pairs are careful to present a joint front.
“Emails go from both of us, not one or another,” says Lisa. “And during Coronavirus, we ran joint webinars and recorded the staff videos from both of us. They’ve come to see us as a double-act.”
If anything, she adds, having two people at the very top has fostered a team spirit, because there is more of a culture of collaboration.
Counter-intuitively, they all cite the Coronavirus crisis as key to bringing the co-managing partners together and to cementing the model for their staff.
“Having that real challenge has made us communicate far more regularly, and there’s also been a lot more to communicate about, so we’ve had to iron out our roles very quickly,” says Alex – a baptism of fire, if you will.
So far, none of them have had any serious disagreements, which would be the key test for the strength of their partnership.
But “that will come,” acknowledges Lisa.
Not that this worries her. She says that she has a very different approach to Hamish – “he makes decisions quickly, I process for a long time” – but that has actually helped deliver better decisions.
“We’re grown-ups, so we can talk things through… The most important thing is close communication. We speak to each other every day.
“And I love that have someone to share this journey with! People used to say to me that running a business is lonely, but I never understood what that really meant until I ran one myself.
“To be able to share the horrendousness of the Coronavirus crisis was invaluable.”
So is this something other firms should consider?
“You shouldn’t discount it,” says Sue cautiously, “because if you’re genuinely concerned about the future of your firm, it allows you to leverage more skills and to allow people to contribute the best way they can.”
And she agrees that it can be better for the co-managing partners as well.
“In other businesses you see the CEO role can be very lonely and very destructive for the individual concerned,” she says. “That’s not the case for us – it’s very collaborative.”
It’s probably not for every firm. These partnerships have worked particularly well because of the personality mix involved – this must be right!
But as we emerge from the Coronavirus crisis, we have to be innovative, agile and flexible…
And that means considering ways of working which may have seemed impossible just a few short months ago – but which might prove richly rewarding.
- Published in Blog
By Liza Robbins.
It was the longest video call of his life…
The auditor had just spent six hours on Facetime with a client, reviewing the stock in their warehouse.
“The client kept on putting his phone in his pocket, which made the conversation a challenge,” says Lisa Leighton, co-managing partner at BHP Chartered accountants, one of Kreston’s firms in the UK. “And each time he went up or down a flight of stairs, our auditor got motion sickness!”
Welcome to the brave new world of audits which are conducted remotely, end-to-end…
Your firm has probably conducted quite a few of these itself since the Coronavirus crisis broke.
But while they are clearly becoming standard, they also involve significant changes in the way we work.
So how are Kreston firms adjusting? What challenges are involved – and what opportunities? And what can we all learn from each other’s experiences?
I set out to find out by speaking to two firms which, between them, have conducted dozens of remote audits in recent months.
Lisa says that they adjusted relatively smoothly because – like many of the UK firms – they had already been using Inflo, a platform that automates some aspects of the auditing process, for two years.
“We started using it because the audit quality improves, which has nothing to do with remote working,” she says.
“But it requires clients to upload all their audit deliverables onto one portal. So when Coronavirus began and we had to shift towards remote auditing, most of our clients were already used to this system – which made things considerably easier!”
Overall, the transition was smooth.
One obstacle was seeing physical stock – hence the 6-hour Facetime call. Now that most clients of hers are accepting auditors back on site, this is one element that they have gone back to doing in person.
This was also a significant challenge for the team at the Kreston IL Group, which conducts internal audits for American companies listed on the Israeli stock exchange.
“We recently had to audit a construction site in Texas,” recounts Doron Rozenblum, managing partner of Ezra Yehuda-Rozenblum.
“We did most of it on Zoom, but we really needed someone physically on-site to see what was going on there. We had to reach out to someone on our team who had moved to Houston, and ask her to assist.”
In future, says Roy Weisberg, managing partner for Kreston Consulting IL, this will make partnerships with other Kreston firms overseas even more critical, because in many locations they can step in.
Inevitably, firms are more reliant on their clients to supply the necessary data for remote audits.
Lisa says that there has been a bit of pushback from long-time clients who were used to the auditors finding information themselves.
The client which was most cooperative was brand-new and had never had an audit before – so they had no expectations around who traditionally does what.
Even with new clients, Lisa says it was not difficult to build trust online. The key was regular contact – and over time, video conferencing actually makes that easier.
But, caution the Israelis, that is balanced out by the need to exercise more caution, because fraud is inevitably easier when auditing remotely.
“There is no substitute to flying in and telling the CFO that you want to see a document immediately,” says Roy. “You have to be a lot more wary when you’re auditing remotely, and institute other controls to verify the information you’re given.”
So, for example, they have added a call with the external auditors. And on occasion, they’ve insisted that clients log onto their system and show them certain documents ‘live’, sharing their screen, instead of simply forwarding a document which can be amended later.
But the biggest challenge of all has been internal – getting the audits done in a timely manner.
“We used to fly in for a week’s work, everyone was available to us, and by the time we flew out we had everything we needed,” says Doron. “But when you audit remotely, clients feel they can postpone everything… Maybe we’ll speak to you tomorrow, we forgot to send you this or that… It takes 30% longer.”
They have had to allow more time for each audit and “be persistent… It’s the only way.”
“Time management and project management skills have become a lot more important,” agrees Lisa.
Since lockdown has eased, they have created a socially distanced “audit room” in their office where the auditors can collaborate more easily than they can from home, even if they are not visiting the clients’ premises.
Not only does this make them more efficient, but it helps inexperienced trainees get the guidance they need.
Despite the obstacles, though, both firms agree that remote audits are a positive development, which allows them more flexibility and to cut down on travel, with only minor trade-offs.
Even if face-to-face audits become possible again, they do not anticipate a return to that model.
Lisa particularly appreciated being able to deliver her audit completion meeting remotely, because more board members could attend that meeting.
“I got more engagement with the client – it was much better!” she says.
Overall, she concludes: “I really can’t understand why we didn’t do this earlier!”
- Published in Blog
By Liza Robbins.
Now that the Coronavirus restrictions are slowly lifting in the UK, the Kreston International team is finally able to go back to our office in central London.
Well, in theory at least…
At the moment, we’re only allowing one person at a time into our office, to preserve social distancing.
I haven’t been yet. Those who have tell me that our office building, which is normally buzzing with people, is mostly empty.
So while we are dipping our toes back into “normality”, it’s a very slow process.
Depending on where you are in the world, you may be far ahead of us – already back with your team in the office, full-time – or far behind, expecting to continue with remote working for weeks or even months to come.
But when you are ready to return to the office, it is unrealistic to expect that your staff will troop in, just as they did before Coronavirus hit, and that normal business will immediately resume.
There are going to be profound changes to the way you operate – and that means before re-entering the office environment, you need to do some serious preparation and planning.
Many others have covered the way you may have to physically re-organise your office, to allow for social distancing. That’s critical, but I won’t go into that here.
I’d like to consider the human aspect of all of this…
You see, your team have been working from home for many months. Despite the initial disruption, they are probably quite used by now to this new way of working…
…And for many of them, returning to the office may be a moment of complex emotions.
Yes, they may be feeling relief, but they might also be very worried –
About their physical health (Are they really going to be safe in an office environment? Is it safe to travel into work on public transport?)…
About their job security (Given the economic conditions, are they guaranteed a job for the foreseeable future?)…
About the practical aspects of how they might manage (if for example their children are still unable to attend school).
Your first job is to assess your team’s concerns, to show them that you understand them, and then to reassure them as best you can.
A caring workplace will offer employees this kind of support and help…
Next, understand that adjusting to the new working conditions may take your team some time. The environment might feel familiar… But to all intents and purposes, this is a new situation!
You must expect a period where your staff will be unsettled – just like when they first started working from home.
And you and your leadership team may have to adjust your management style.
Most of your team members became used to managing themselves to a much higher degree while working remotely. Some may have developed their own systems or new habits, and it may be difficult for them to be supervised and managed closely by their boss again.
Old management techniques that worked well before Coronavirus may not be effective any more. And old Standard Operating Procedures might also be out-of-date, given that your team and working conditions have altered.
Be prepared to adjust!
Now, all of this might sound like a difficult homecoming…
But of course, it is a joyous moment as well. After the difficulty and trauma of the past few months, any step towards a return to normal is to be celebrated.
So, as leader, think of ways you can mark this occasion in a positive way as well.
What can you do to welcome your team back in an exciting way? Could you, for example, give each returning member of staff a little gift… or throw a socially distanced party of some sort?
Perhaps you can do something similar for your clients. Imagine the goodwill that you’ll generate when each client who visits you in your office receives their “welcome back” gift pack…
…Or when you make a thoughtful gesture to your top 10 clients, simply to celebrate the re-opening of your office. They’ll love it!
- Published in Blog
By Liza Robbins.
Last week, I shared with you a powerful video recorded by Philip Olagunju, director at PEM Corporate Finance, one of Kreston’s UK firms.
He discussed the racism he encountered both in his personal and professional life, and his thoughts on Black Lives Matter.
When he posted the video on LinkedIn it went viral, earning nearly 21,000 views, more than 400 ‘likes’ and many dozens of comments.
And when I wrote about Philip’s experiences myself, I was astounded by the responses I received from Kreston members worldwide, sharing their own horrific stories of racism.
Why did Philip’s video resonate so strongly?
Of course, Philip’s experiences were profoundly shocking and – for me, a real eye-opener to a very different reality to my own.
But I think that the appeal of this video went beyond that.
After all, many other firms – and professionals and entrepreneurs from other industries – wrote about racism in recent weeks.
But very often, the way they wrote about it felt more detached than Philip’s piece…
They were writing in the 3rd person, conveying a company position and expressing solidarity with #BLM, often in formal, “corporate-appropriate” language.
Philip’s video, by contrast, was personal, raw, authentic…
He was talking honestly about real experiences, which made it more emotional, more relatable and more effective.
Is it any wonder 20,000 people were drawn to watch his video!?
There’s a lesson here for our firms’ marketing.
No matter what you’re writing about (and this emphatically does not just apply to strongly emotive topics like racism), people will naturally be drawn to content that feels personal and ‘from the gut’.
And there is a lot more we can produce in this vein.
This really hit me in the first weeks of the Coronavirus crisis…
Our firms were, across the board, excellent at producing updates for their followers and clients, keeping them up-to-date about government initiatives, and the financial implications of the evolving situation.
The Coronavirus crisis unfolded quickly and I know for a fact that for many clients, these bulletins and explainers were a lifeline – and in some cases, even earned our firms new business.
But could there have been another way to communicate in those critical first weeks – one that was even more powerful?
Looking at Philip’s example, I think so.
After all, the leaders of our firms are all business owners and entrepreneurs themselves… Just like many of your clients.
What if you had spoken to them directly and honestly about the pressures they were under… And that you were under too…
…Being open about everything you were going through, sharing your real stories and your real thoughts about the situation…
…And then, of course, giving all the same world-class advice – but from a framework of empathy?
And what if the managers in your company did the same – speaking directly to their peers in your clients’ companies, person-to-person rather than striving to maintain a detached persona?
You would still have all the same authority.
But you would immediately be even more relatable, your clients and leads would feel you understand them at an even deeper level – and you would be deeply differentiated from your competition, very few of whom are marketing in this way.
It’s a small change, but it’s helps build human connections.
And as you may have noticed, it’s the approach I try to take in my own emails to Kreston’s leaders!
The truth is, people don’t want to hear from amorphous “firms”. They want to hear from real people. They want a relationship with you.
When you give that to them, the power of your marketing will increase 100-fold.
- Published in Blog
By Liza Robbins.
“Racism is every day for me,” says Philip Olagunju.
“It’s not about being chased down the streets… It’s someone hearing me on the phone, without being able to see me.
“We’ll arrange to meet and then when they see me in person, their response is, ‘Oh, you’re a black guy… You’re very articulate!’ As if it’s some kind of surprise…”
Philip is director at PEM Corporate Finance, one of Kreston’s UK firms, based in Cambridge.
And I must admit that when I first heard of his experiences, I was shocked.
After all, here at Kreston International, we deal with people from different countries, backgrounds and ethnicities all day, every day.
It feels like we’re one global family and in this international environment, race – along with religion and gender – is the furthest thing from my mind.
But the recent Black Lives Matter demonstrations made me stop and think: Was my experience of this very diverse working environment privileged and unrepresentative?
Was there racism going on below the surface – and at the local level – that I just wasn’t aware of?
And what more could we be doing, to continue Kreston’s commitment to diversity?
That’s when I came across a very powerful video by Philip on LinkedIn, in which he discussed his thoughts on racism. I got in touch directly to continue the conversation.
Philip quickly made me see that racism is all around us, including in our corporate environment – but it can be difficult for me to see it.
“It’s not your lived experience,” he told me. “You don’t become aware until people who do go through it become vocal about it.”
He compared it to the #MeToo movement, which exposed sexual harassment against women.
“As a man, I had no idea what women were exposed to. I lived in a fog of ignorance.
“It was only when women who suffered harassment started talking openly about their stories and my wife said that this resonated with her, that I had an awakening.”
The speed at which Black Lives Matter demonstrations spread internationally shows just how widespread racism is.
“This isn’t just a black issue or just an American one,” he emphasises. “I talk about it from the point of view of a black male, but this applies to other racisms as well.”
Many people, Philip says, think racism only occurs amongst uneducated or very sheltered people. But it’s not true.
Philip has been in corporate finance since 2005, and his working experiences have “not typically been diverse,” he told me. “Often I’m the only black person in any given context – whether that’s a team or a meeting with clients.”
The result can be overt racism, for example being called a “black bastard” in a networking meeting.
Or, day-to-day it can be much more subtle – for example, wincing at the way the media talks about black people.
A shopping trip near his house recently took on disturbing undertones when he realised this was where racists had gathered to demonstrate against Black Lives Matter, doing “monkey chants” for the cameras.
Philip says this doesn’t affect his self-esteem, because of his Christian world view – “I can never be inferior to anyone; that’s not who God made me to be”.
But not everyone has that view or that level of self-confidence, and for many, this constant drip-drip of racist incidents can be emotionally and mentally traumatic.
So what can we, in our Kreston firms, do to embed diversity and equality?
The first step, says Philip, is to acknowledge that racism can exist in our organisations.
In the past, when he’s tried to talk about racism, some workplaces have preferred not to hear – often under the guise of protecting him.
“People would tell me not to dwell on negativity or not to have a chip on my shoulder. You may have good intentions, but it’s suppressing the truth.
“You have to talk about it – acknowledgement is the first thing.”
Next, he says, organisations need to remove inbuilt bias, and give black people the exact same opportunities as others.
“Don’t think of black people as asking for a handout. All we’re asking for is removal of inequality,” he says. “For example – when it comes to hiring, ensuring that aptitude and ability to contribute to the business is the only thing that matters. Unfortunately, that is not the case, time and time again.”
Last, he says, take action as a result of the conversations you’re having, although the fixes will be different in every organisation – there is no “one size fits all” list of actions.
Philip says this is an area where PEM has excelled – in fact, straight after our call he had another one booked with his managing partner, to explore what steps his firm can take to promote equality.
Do not underestimate the power of Philip’s simple steps.
I found that watching his video and talking to him for a few minutes was an enormously eye-opening experience for me. He was right – by being vocal, he completely changed my perspective.
If you have your own experiences to share, please do write back and let me know. I’d also welcome any input you have on the best ways to combat racism in the workplace.
Wherever we are in the world, we have a duty to actively seek out these stories, to educate ourselves about the racism ingrained in our societies and yes, in our organisations – and to strive to make our firms better, more diverse, more equal places.
“I didn’t know” is no longer an acceptable excuse.
- Published in Blog
By Liza Robbins.
This is a high-risk moment.
All over the world, Coronavirus restrictions are being lifted…
…And there is a cautious sense that we are, however gradually, returning to something resembling “normality”.
But the truth is, of course, that market conditions are very different to what they were in January or February.
We are entering a period of profound economic uncertainty and potentially tumult.
And we are not yet out of the woods yet concerning Coronavirus. We may very well face the feared “second wave” later in the year or next winter, leading to more restrictions, dents in consumer confidence and potentially even new lockdowns.
So while many business leaders imagine that the worst is over, now that Coronavirus appears to be on the wane and most countries are easing their lockdowns…
And feel that they can finally relax just a bit…
It would be a terrible mistake to be complacent right now.
The most sensible thing to do right now is to endeavour to build up your firm’s long-term resilience…
…Because there are likely storms ahead, and we’re going to have to weather them.
As an accountancy firm, I am sure I don’t need to tell you that this is the moment to look at your own accounts carefully, to make sure that you are as financially lean and mean as possible.
But given how rocky the next few months might be, I think you need to go much further than that to build financial and business resilience.
Many firms have spent the last few months pivoting their operations and innovating in various ways. The flexibility and ‘out of the box’ thinking many of you have shown has been legendary!
You need to keep your foot firmly on that pedal.
Now is the time to think creatively about financial efficiency.
For example, in many of the countries in which Kreston operates, we have more than one firm.
Are there opportunities here to collaborate?
Of course, this may not just mean sharing expenses.
The Kreston firm working in a city near you may have fantastic services which you could badge as your own. Or perhaps they could offer their clients some of your unique services!
We’ve seen this being done well in Latin America, for example, where Kreston firms with a specialism in transfer pricing are now offering this service to others.
And you don’t have to stick to Kreston firms near you for this, either. If there’s one thing we’ve learned during Coronavirus, it’s that geography is no longer a barrier for doing business together!
Six months ago, for example, I told you about the Cybersecurity services offered by Kreston IL Group.
This is a service you could be offering to your own clients – because Kreston IL Group will run the whole process for you.
Perhaps you thought this was interesting when I first mentioned it, but didn’t do anything about it…
Now is the time to revisit this opportunity – and any others you may have briefly considered in the past, but which fell by the wayside or were not followed up on.
We’re still in pressing circumstances, and that means thinking innovatively.
There has never been a better time to do things in a new way.
By shifting our offices to working remotely, we’ve already shown that we can break the mould of the traditional office set-up – something most firms will have considered impossible just a few months ago!
Now that we’ve shown we can do it, I challenge you to continue breaking those moulds…
Thinking anew about your spending patterns, partnerships, and even who is delivering your services to your clients…
…So that we can emerge from this challenging period stronger, better – and more resilient for the future.
- Published in Blog
By Liza Robbins.
Last week there was a riveting interview in The Sunday Times magazine.
Sadiq Khan, the mayor of London, confessed that he had found the Coronavirus lockdown the hardest challenge of his personal and professional life – specifically “in relation to the loneliness.”
“For eight weeks, I didn’t leave, literally, my home… I thrive on company, on being out and about. And I was struggling… There are days when I’m not providing proper leadership… I felt fragile.
“Because being a leader is lonely. And I’ve struggled. I also realised I should feel confident talking about it. I shouldn’t feel that I’ve got to be this alpha male who demonstrates his virility by being superhuman. I’ve got to be honest because, you know, I have struggled.”
Over the past few months, there has been widespread recognition that lockdown has affected the emotional and mental wellbeing of vulnerable groups – like children cut off from their peers, elderly people who are shielding alone, and people who may be trapped with abusers.
But this is the first time I’ve seen anyone address the toll that lockdown can take on people who are in leadership positions.
People do not expect leaders to suffer during times like this.
You’re expected to be the strongest of the pack – resilient and emotionally robust.
In fact, your teams lean on you for emotional support and for consideration during this difficult time (which may take its toll on you too)!
You are taught to recognise the signs that other people are struggling to adjust to this new way of working…
…But behind the scenes, you – or your peers – may be struggling too.
Leaders in firms are often ‘big’ personalities, who enjoy interacting with others and thrive on those interactions. They derive their energy from bouncing around the office talking to everyone around them… And from meeting and nurturing clients.
Even when this is not the case, people (on the whole) reach leadership positions because they are influencers and communicators.
It is precisely all these things which are lost when your office environment disappears. The casual interactions which previously fed your spirit disappear overnight.
Just like Sadiq Khan, you or other members of your leadership team may be feeling isolated… Out of sorts… Lost… Depressed… Struggling…
…But this is rarely acknowledged or addressed, although this not only affects you personally but by extension, your entire team.
What’s more, because the Coronavirus restrictions have been in place for so long, in many places attention is moving on.
In the “early days” there was a lot of discussion around the implications of remote working, but by this stage we are simply expected to be used to it…
Yet it can take months for the real implications of working alone day in, day out to sink in – and for the effects to show.
So what should we do about it?
First, let’s acknowledge that many people in leadership positions may be struggling right now – and be alert to the signs, both in yourself and in others.
This is not something which affects only those who are “vulnerable” – it can affect everyone, at every rung of the office ladder, including those at the very top.
Second, let’s accept that it’s okay not to be okay.
This can be a difficult admission for many leaders – as Sadiq Khan intimated, “alpha” personality types (not just “alpha males”) can put a lot of pressure on themselves to be perfect and to maintain that façade publicly.
But it doesn’t always happen to “other people”… It can happen to you, and your leadership team, too.
And if this is the case, you need to square up to what’s happening – and get the help you need.
Take care of yourself emotionally, mentally and look after your general health – because if you don’t, you’ll find it more difficult to look after others and stay positive.
Finally, let’s all look out for each other more.
Every morning, when I speak to Marc, our Strategic Marketing Director, we ask each other: “Are you ok?”
They’re three tiny words, but they mean that we are normalising the idea that reality is difficult and one of us might not be okay.
By continually checking in with each other, we think more carefully about how we’re doing…
…And we both understand that if the answer is ever, “Actually, I’m struggling today,” the other person will be there to support them.
This doesn’t have to be a heavy conversation with your peers, by the way. There is even the head of a Kreston firm who emails me every single week with a little joke. I know this is his way of checking in on me, just to make sure I’m ok!
So reach out to others. Do not assume that just because someone’s title is “director”, “partner”, “CEO” or “head of”, they’re managing – because they may not be.
And most of all, be kind to yourself.
- Published in Blog
By Liza Robbins.
About three months ago, Mark Taylor received a referral from a Kreston firm in North America.
“The client, in the healthcare industry, was a perfect match,” he told me last week. “It was a buzz to win business that way – where your colleagues have trusted you enough to put their clients in your hands.
“We need a lot more of that,” he concluded.
Now Mark, who is head of tax advisory services at Duncan Toplis in the UK, has a plan to make exactly this happen for firms throughout the Kreston network.
Perhaps you caught my announcement last week, that following a rigorous application process, Mark has just been appointed as the new head of our International Tax SIG.
Making the group more “commercially focused” is his top priority.
“We’re going to align the SIG with the Kreston strategic plan and deliver a lot more business opportunities to member firms,” he says.
Mark has been a member of the International Tax SIG himself for over five years, as well as being editor of the International Tax Bulletin.
The group has been “fantastic for meeting tax colleagues within the network and getting updates on international tax developments,” he says.
And he showers praise on his predecessor, Petra Uylen of Kreston Grip N.V., who “fought hard to put tax on Kreston’s agenda – and succeeded.”
He intends to build on her work, but the focus will shift somewhat.
“I want to make it more about our clients – figuring out who needs our services and which clients in one country can we act for in other countries, as well.”
Referrals will be handled via the online referral system which Kreston will launch shortly, so that there will be complete transparency and every firm will be able to benefit. In addition, the SIG will draw up wishlists of clients to target.
Letting the market know about Kreston’s exceptional offering is part of the strategy.
“We’re going to increase awareness of our brand – communication is key to this,” he says.
If this sounds like a hefty job, it is!
“I can’t do it alone,” Mark laughs.
He’s planning to build a leadership team of “likeminded people”.
As part of his application to the Kreston Board, Mark produced a strategy, which outlined a formal leadership structure for the SIG.
In future, there will be a Technical Director and a Business Development Director.
And there will be Regional Directors in every jurisdiction in which we operate, in order to ensure geographical diversity and to help bring more international business opportunities to the table.
Candidates for these roles will go through a formal application process – in line with our efforts to professionalise and systematise the SIGs. And their goals and responsibilities have been clearly laid out in Mark’s strategy document, so there is full accountability.
“It’s an exciting opportunity for people who want to help generate more business and to shape the future of the network,” says Mark.
To help members systematically generate more business, the leadership team will meet more frequently than before – at least once every other month (“we’ll have online meetings,” Mark mentions).
Because of this the leadership team won’t need a separate meeting at Kreston conferences.
“We’ll have a leadership team responsible for driving the SIG’s agenda with the support of others in their region; everyone will be welcome at conferences,” says Mark. “I think there was a perception in the past that the KIT Group was an elite group – we need to change that.”
Ultimately, he says, he is energised by the task ahead.
“I’m a doer! If you want something done, ask a busy person…”
- Published in Blog
By Liza Robbins.
It’s a Thursday afternoon, and 50 staff members of Van Herwijnen Kreston in Holland are meeting online.
But they’re not there to discuss clients or discuss the status of various assignments…
…They’re in a “virtual pub”.
Partner Martin Hommersom – who is also one of Kreston’s directors – has prepared a pub quiz, and sent everyone a small packet of beer and chips (French fries).
“An hour-and-a-half later, everyone was still socialising together in the digital pub,” he told me afterwards. “It was incredible.”
Their experience illustrates one of the key challenges of the Coronavirus crisis. As we move towards remote working, the way you manage your team is going to have to change as well.
This was one of the key themes that emerged from my discussions with four Kreston directors from all over the world, about the long-term impact of COVID-19 on our industry.
“When people are working from home rather than from the office, you need to invest in order to build good teams – It’s part of ‘Knowing people, knowing you!’” says Martin. “You can’t speak to each other casually or drink coffee together, so how do you build those connections? Coronavirus is a management challenge.”
His firm has experimented with the “virtual pub”, and I’ve heard of many other firms that are encouraging staff to meet daily online, setting online challenges and competitions for their team, and trying to think “outside the box” in order to encourage interpersonal interaction while remote working.
But it’s not just a challenge of socialisation – but of how to work effectively together, while physically apart.
“I’ve been checking in with a lot of my contemporaries, and have noticed that the people who have adapted well to this way of working are much more organised,” says Eustis Corrigan, senior managing director at CBIZ & MHM based in Memphis, Tennessee. “You have to be pretty efficient to work this way.”
Counter-intuitively, he has noticed that some of the biggest “personalities” in the office – and the most prominent leaders – are finding it hardest to adapt, because the new conditions do not suit their leadership style.
For firms, this means adjusting workflows to allow for remote working and interactions with clients when you cannot meet them face-to-face.
But above all, it means giving staff members a lot more support getting organised.
“20-30% of employees feel lost in this new way of working, and they need a lot more structure, hand-holding and instructions than previously,” says Eustis.
Many also need training in how to use the technology which is now becoming normalised.
“Not only are we holding more meetings online, but our working methods are changing, and we are using electronic methods to audit and go into our clients’ systems,” says Edmond Chan, partner at Kreston CAC in Hong Kong. “You cannot assume staff have those skills – we need to train both our staff and ourselves to be more familiar with this technology.”
Looking to the future, this may affect your hiring practices.
“You’re going to have to hire self-starters, who are going to be more organised and more productive,” says Eustis. “You’ll also need strong communicators, because that is very important when people are increasingly on email or meeting virtually.
“This can be a challenge to identify, especially at the entry-level.”
And the structure of your team may change, too.
As I mentioned last week, some firms may experiment with outsourcing – giving them maximum flexibility with their workforce in case of a resurgence of the virus, or economic distress.
Others may consider consolidating teams from different offices, either permanently or on a project-by-project basis, as this is both easier when remote working is the norm and helps manage costs.
All this, of course, will generate its own managerial challenges, to keep your teams organised, motivated and cohesive.
Of course, we’ll be here for our Kreston members, to give you any support and help you need thinking through these issues – so please do get in touch.
- Published in Blog
By Liza Robbins.
It’s December 21, 2021.
It’s nearly two years since the Coronavirus crisis took the world by storm…
How has the accounting industry changed in the interim? And how has your firm adapted to the new realities?
It’s hard to predict what the future holds…
…But today we’re going to give it a try!
You see, being able to identify emerging trends in the industry and prepare for them is critical if we’re going to keep up, stay competitive – and forge ahead.
That’s why I consulted four of Kreston’s directors across four continents, to find out how they thought COVID-19 would impact the way we work, long-term.
Despite the geographical spread, there was broad agreement on one thing: We are going to end up with much leaner, more efficient firms.
“Coronavirus has shown everyone that it is possible to do a lot of work virtually, saving both time and money,” says Francisco Bracamonte of Kreston BSG in Mexico, speaking from home over Zoom.
“Clients are getting used to it and will want to continue working that way in the future, both because it’s more convenient and because the economic conditions will force them to look for cost savings.
“Firms that don’t use electronic tools in the long-term will be less competitive and less attractive to clients.”
His firm has already started reviewing their processes to see whether there are other ways in which they can become more efficient. For example, he says they have been reluctant to use outsourcing in the past, but are now looking at the possibility in case there is a second wave of Coronavirus, because it will give them more flexibility.
“In times of crisis, we’ve learned that you need to be able to respond quickly.”
He also notes that because of the increase in remote working, firms in the future might even be able to give up some office space, cutting costs further.
This is a process that has already begun in Memphis, Tennessee, where Eustis Corrigan is senior managing director at CBIZ & MHM.
“We have a floor-and-a-third in our building, but now we’re re-engineering our thinking to address how much space is really needed if we were to allow more remote workers?” he says.
And it’s not just because Coronavirus has forced people to work remotely.
“Accounting firms can typically be very siloed in nature, between tax, audit, advisory and different offices. The remote working framework is helping break down those barriers, and long-term, it won’t really matter where people are located.
“With Microsoft Teams, for instance, my Memphis team can be accessible for a face-to-face discussion if any of our colleagues need help…
“Location doesn’t matter any more.”
Not only is this good for firms, but it will be good for clients too: “They can have more people working in the field who can be accessible if needed,” says Eustis.
Martin Hommersom, Partner at Van Herwijnen Kreston in Holland, predicts another type of cooperation increasing – amongst members of networks like Kreston.
He says that consultants who would normally have travelled overseas to see international clients will find this more difficult, because of Coronavirus travel restrictions.
“It’s not practical to travel elsewhere if you have to wait 14 days in quarantine,” he says – although people may be reluctant to travel right now even without quarantine.
“We’re going to need partners in other countries to act on our behalf.”
In fact, many of the trends predicted by the directors are already well underway before Coronavirus hit – for example, a move towards advisory services and increased adoption of IT.
But Coronavirus has forced all of this to happen faster, as firms move online and as clients need more advice about how to survive the current economic pressures.
This does not mean that the transition will necessary be smooth.
“A lot of the software we use is expensive and there’s not enough of it,” says Edmond Chan, partner at Kreston CAC in Hong Kong – where his team are already mostly back in the office, although social distancing measures remain in place.
“Audit needs to catch up with a lot of these IT changes.
“There is a serious challenge for small and medium-sized firms without the resources to create their own software, who have to rely on the market. Some firms will get left behind, or may have to change their focus” to other areas where electronic or online work is less crucial.
And not all firms are going to survive at all.
“Firms that cannot adapt to the new conditions may find it more difficult to grow, and so there might be some consolidation in the accounting industry, particularly amongst lower to mid-tier firms,” says Eustis.
Of course, this presents opportunities as well, because some good firms may be available for acquisition. And some clients may be looking for new accountants…
Looking at these predictions, I am optimistic that with all the hardship and turmoil of the Coronavirus crisis, our firms have a bright future.
But you must be agile enough to adjust to the new conditions – doing what’s necessary to operate in a leaner way, adapt to the needs of the marketplace, rethink the structures underpinning your business and take advantage of the opportunities that this crisis throws up.
There are also many implications for the way you manage your teams. I discussed that with our directors as well, and will share their thoughts on this next week – so watch out for that blog post!
- Published in Blog
By Liza Robbins.
The Auditor General in Zimbabwe recently requested tenders from six accountancy firms.
Kreston Zimbabwe won it.
The secret to their success was both more simple and more complex than you might imagine.
“We won it because we were the only one to meet the deadline,” managing partner Modern Mutumwa told me cheerfully.
But this is no easy victory – being meticulous in your standards never is.
Even more so in the conditions under which Kreston Zimbabwe must operate.
As Modern put it to me, “In a chaotic environment, quality and efficiency wins.”
I was speaking to him, because I hoped to get some insight into how firms can thrive in difficult external circumstances.
Right now, almost every accountancy firm in the world is feeling the pressure of COVID-19. Not only are many economies under severe pressure, but our way of work and indeed our very way of life is threatened too.
I know that many firms have concluded that it is probably impossible to pick up new clients amid such uncertainty, and that the best they can do right now is to stand still.
But while this is undoubtedly true for some, Kreston Zimbabwe can inspire hope, because it shows how it can be possible to grow even in the most adverse conditions.
Zimbabwe is in chronic distress. Its GDP is just $29 billion (compared to $21 trillion in the US ). Lenders like the IMF and World Bank stopped lending it money more than 20 years ago after the country defaulted on its debts, leading the government to print money to cover its deficit. In March, annual inflation soared above 650% .
Most of this, of course, is driven by an ongoing tumultuous political situation. And the country is regularly paralysed by demonstrations and strikes.
Still, Modern founded Kreston Zimbabwe (then MJV Chartered Accountants) with 3 partners in 2014 – immediately making it substantial in local terms. He had been working for EY, and had spotted a gap in the market – one many of us will find familiar.
“I saw that the big firms were neglecting smaller clients,” he says. “When things got tough, they shed staff and shed smaller services in order to focus on larger clients and higher revenue-generating services. That meant that there were medium-sized entities looking for accountants, who couldn’t afford the bigger firms anyway….”
They started modestly, offering secretarial services and small audits while building up capacity. But soon they began to making a name, attracting SMEs and winning small tenders.
Modern’s strategy for growth was simple.
“We didn’t want to do what everyone else was doing,” he says. “We want to pave our own path.”
Again and again, they sought opportunities that others were not exploiting.
So, for example, they noticed that there was a market for corporate restructuring for distressed companies, which the larger firms were not interested in serving.
“This proved to be key because in our economy, there are many companies applying for liquidation and judicial management,” says Modern. “There are many opportunities even in a distressed economy….”
They have generally avoided the sectors that their rivals focus on, trying to find areas which were less well serviced in their country, like insurance and pension funds.
And they are flexible with their clients, sometimes working with companies other firms might not consider worthwhile.
“We want to grow with our clients,” Modern says. “So at times we might offer clients a service without being paid too much, or even if they’re small and struggling, if we see potential in them to grow.”
Applying for tenders through the Auditor General has also been a route to new business, as larger accountancy firms are not eligible for certain tenders.
But this has all been more systematic – and organised – than it may sound.
Unlike many of its rivals, Kreston Zimbabwe has created a department with senior staff, which handles business development, including all tenders and proposals.
“We noticed that if you leave it to the partners, in the end they’ll fail to reserve time to win clients. It gets lost amongst their other work,” says Modern. “Having people dedicated to business development gives us a big advantage.”
And they’re ambitious, as seen by their decision to join Kreston last May, in order to pursue international business – another potential gap in the market.
Ultimately, Modern is stoic about working in a distressed economy, saying that real disruption has been limited to a “week here or there”, and that “we can always do the work.”
The biggest disruption to his business, he says, has been COVID-19, which has been declared a national disaster.
But it’s clear that working in a country where disruption is routine has made Kreston Zimbabwe resilient, because they have been preparing staff to work from home due to Coronavirus since as far back as December.
Risk management cannot be left to chance once you have experienced real disaster.
All this shows what an entrepreneurial, agile approach can do even in the most difficult of circumstances.
An inspiration to us all!
- Published in Blog
By Liza Robbins.
If you were a carpenter frustrated because your team didn’t want to wear safety masks, where might you go for advice?
Other carpenters? Industry experts?
A famous Harvard study shows you would be much better off consulting roofers and in-line-skaters. Although they are substantially different fields, all three need workers (or in the case of in-line skaters, competitors) to wear uncomfortable safety equipment.
“Over the course of years of studying innovation,” the researchers concluded, “we’ve found that there’s great power in bringing together people who work in fields that are different from one another yet that are analogous on a deep structural level.”
That’s why today I want to tell you about Robert Taylor, founder of 360 Business Law, an innovative law firm with over 200 lawyers covering 50 countries.
You see, as the Coronavirus crisis continues globally, the market we operate in is going to evolve – and we are all going to be under pressure to adjust the way we work.
There is also going to be no better chance for us – and for our competitors – to innovate than right now, when the old ways of doing things are crumbling.
So whether we see it as a threat or an opportunity (and to be clear, here at Kreston we see it as the latter) – change is coming.
And Robert’s experience disrupting a different, but in many ways analogous industry, holds many lessons for us in accountancy, both in terms of what we can be doing – and what we can reasonably expect competitors to do, too.
Robert’s law firm has introduced a completely new model of operating in the law industry.
His firm, set up 6 years ago, is mostly virtual.
They have a small office in Surrey, and a small team covering HR, admin, marketing, finance and so on. But all the solicitors, barristers and overseas attorneys are consultants, working from their own homes.
Having so little physical infrastructure has allowed 360 Business Law to drastically reduce its overheads – making it much more competitive. It has also been able to introduce radical new service packages, for example allowing clients to subscribe to certain services for a set fee.
This is an enormous departure from a traditional firm, which would have large, often expensive offices and charge hourly (and often very steep) fees.
Robert spotted the gap in the market when the British government introduced new legislation in 2007, meant to deregulate the legal profession and bring in new competition.
“I wanted to take advantage of this act and create a much more commercially, client-focused business than existed at the time,” he told me.
The reaction from the industry was overwhelmingly sceptical.
“They thought we were a bunch of fools and that we’d never survive – that we can’t break the old model,” he says.
Clients, however, loved both the lower fees and their predictability. And they also loved the quality of the work.
Over time, as they became more established, they were able to attract the very best talent, so the legal services clients received were of the same standard they would receive from ‘magic circle’ firms – albeit without the frills (“We don’t offer beautiful meeting rooms or biscuits,” says Robert).
Clients also appreciated a simple service model. Everyone communicates via the same email address, and is billed centrally no matter where they are accessing services. The firm also developed its own IT infrastructure to streamline delivery of projects, and further lower costs.
With time, the quality of clients improved. Nowadays the firm – which was named a Times Top 200 firm 2020 in the UK – regularly attracts FTSE-250 and Nasdaq-listed clients.
Looking ahead, he says, there will always be a market for the largest, traditional legal firms, but smaller, high street firms are under pressure, and “Coronavirus will cripple the lower end of the market.”
Agile firms like Robert’s will be in prime position to take much of that business.
“The magic circle firms in the UK are all busy furloughing staff, changing partnership structures and removing profit schemes in order to cope,” he says. “It’s hit them hard, because they are still encumbered with enormous structures which are eating their cash reserves.
“We became fully virtual within an hour-and-a-half, and don’t have any of those costs.”
So what can we learn in our own industry?
Robert admits that his model is not easily replicable for existing firms – it’s much easier to build from scratch.
Existing firms, however, can do a lot more to reduce their overheads and infrastructure costs, “and bring it down to a far more IT-based service, where people can work from home and cut down on travel.
“You can focus on your essential work – the accountancy and consultancy services – rather than the frills.”
If you don’t, others doubtless will – especially given the normalisation of remote working – – so you must figure out how to compete against them.
Ultimately, implementing a different model (whether it is this one, or another) requires courage and vision.
But it would be a mistake to imagine that the traditional accounting firm model is impossible to break.
“They laughed at us at first,” Robert concludes, “But now we’re impossible to ignore.”
- Published in Blog
By Liza Robbins.
Friends who use Facebook – I don’t! – mentioned to me that their experience has changed considerably over the last few weeks.
Earlier in the year, they were targeted by ads for a variety of businesses – from photo printing and gardening services right through to magazine subscriptions and even accountants.
Almost every single ad they’re served is for an online course (or so it feels).
All those small businesses, like the gardeners and yoga teachers and family photographers who can no longer meet clients in person, have shifted their businesses online. Now, instead of “doing”, they’re teaching.
There are millions of grateful viewers (many of them paying customers). Many of us have more time on our hands, and are spending some of it attending useful webinars and completing online training.
Our clients are of course in the same boat. And so are many of our employees, who no longer have a commute.
So how can our firms take advantage of this online learning trend?
To find out, I spoke to Phil Zaman, Director of Learning and Development at CBIZ & MHM in the United States.
He leads a team of 10 people who develop content on leadership and business development, manage CBIZ’s learning management system, help employees track their Continuing Education requirements, produce webinars on technical matters, and – in better times – plan and execute in-person conferences.
It’s quite the operation!
In the past few weeks, the team has seen an increase in online learning both amongst employees and clients, he told me. But the subject matter they’re interested in has changed considerably.
“Right now, people are primarily interested in content around the Coronavirus,” he said – not surprisingly!
“Internally people are consuming content around changes in the law, educating themselves so they can help clients. There is also a lot of content around how to work remotely and manage remote teams.
“And we’re also doing a lot of client-facing webinars around how to apply for relief funding, managing risk, cash flow, and what to do with your employees during this time.”
He recommends that other Kreston firms help their employees with similar content, but recognises that many firms just don’t have the bandwidth to produce original material right now.
“If you have the capacity, curate the material for them instead,” he says. “It makes it more efficient for the end-user if they can be directed to good sources, and you can be more confident they’re getting reliable information.
“At minimum, put together a list of websites which are reputable – we have 4 ‘go-to’s’, so it doesn’t have to be a lengthy list!”
A good place to start? We’ve produced a list of what other Kreston firms have produced around Coronavirus, and also have a closed LinkedIn group where firms share COVID-19-related content. If you’re a member of a Kreston firm, ask us for access.
To promote your content effectively, don’t just rely on one channel. Choose several – those that will have the widest reach – of course being mindful of the need not to overwhelm people.
“We typically have a person in each office or service line who champions learning and development, and pushes the content in their local office,” adds Phil. “People will pay more attention to that.”
When you produce your own content online, one challenge can be to keep your audience engaged. It’s too easy to leave a course running in the background while you check your email.
“We use technology to keep people involved, for example using polling questions and chat features where we ask people to submit questions,” he says. “Some platforms have breakout rooms where you can have more intimate discussions.
“Above all, you have to re-enforce the content, encouraging people to have conversations with their colleagues or supervisors about what they learned. That’s what makes it really sink in.”
How you frame the learning opportunity is also key. You want to avoid a situation where people take courses merely in order to satisfy continuing education requirements, without properly engaging.
“We’ve been working on a shift from a ‘continuing professional education’ culture to a learning culture,” says Phil. “ We don’t talk about CPE anymore but about learning that just happens to qualify, and we provide plenty of excellent learning opportunities which don’t qualify at all,” he says.
Ultimately, this is important to get right because the need for online education is only going to grow.
Phil predicts that we’ll see a long-term shift towards fewer ‘live’ training events – not only because of Coronavirus directly, but because the business case for them will become more difficult, as people get used to learning online.
“We’re being forced into a situation where we have to innovate how we do learning and development, and really stretch our muscles to figure out how to deliver content effectively.”
That is a global challenge, but I have no doubt that Phil and his team will be at the forefront.
And so should Kreston firms everywhere, because this is the way forward both for our employees and our clients.
- Published in Blog
By Liza Robbins.
January 2020 was less than five months ago.
But it feels like a different lifetime, doesn’t it?
What a different world we lived in then.
That’s why I was so taken back when I recently re-read the very first email I sent out this year…
It resonated in ways I could never have imagined or expected, just five months later.
Back then, I wanted to explore how people find meaning in their work.
I firmly believe that companies with a strong purpose find it easier to attract and retain clients and staff, and to grow faster.
So I wrote a series of emails about how we, at Kreston, can do more to bring purpose and meaning into our firms, and communicate that to all stakeholders.
I started off by pointing out that while accountants are sometimes stereotyped as boring bean-counters, the work we do is of immense value….
I won’t try to paraphrase myself – Here’s what I wrote:
“The truth is that the role we play is essential to civil society.
In fact, it underpins society!
Without good financial systems, society cannot function smoothly, just as it cannot function without a good legal system.
And without the kind of checks-and-balances we provide for the financial system as auditors, accountants and tax advisors, people will not be able to have confidence in society, either.
It’s hard to see how essential that confidence is until things go wrong.”
Well, it’s fair to say that things have gone wrong, thanks to the Coronavirus crisis…
…And it’s clearer than ever just how essential our role is.
In many countries, accountants have been classed as indispensable, key workers, because the smooth functioning of the economy – and by extension, society – depends on what we do.
Accountancy firms have been absolutely instrumental in helping companies access emergency funding from governments, across the globe.
That is not just a technical issue. Being able to access these funds will allow businesses to survive, will maintained livelihoods, and ensure that companies and people can pay their bills…
It’s not saving people’s lives physically, but I do think that we will save lives in the broader sense.
We’ve helped companies file their accounts and do their taxes under almost unimaginable conditions…
…Not only helping businesses to continue to function, but ensuring that people can still trust that there is oversight of their financial affairs.
During a worldwide crisis like this, when almost everything about the way we live has been turned upside down and many people are in acute financial distress, it’s crucial to maintain confidence in our financial systems.
Otherwise, people will not be willing to spend their money or trust the banks, and it could even lead to social unrest.
Our work has helped avert all that.
Finally, our firms have also given companies invaluable consultancy and advice around how to survive this business crisis – and will doubtless continue to do more of this, as lockdowns and quarantines start to lift.
Getting businesses back on their feet again will be key to restoring a sense of normality in these abnormal times, and averting economic devastation.
The bottom line is that is that the role we’re playing during the COVID-19 crisis is of national and international importance.
And I think that our clients, who depend on us intensely during this period, recognise that and will remember our contribution for years to come.
So while of course times are tough for many accountancy firms right now, in the long-term, we will emerge with lots of goodwill and gratitude, a deeper understanding of the immense value we provide and a lot more respect to our profession.
Given the state of the world right now, I recognise that’s cold comfort.
But still, we can be very, very proud of what we do.
- Published in Blog
By Liza Robbins.
It was 1665, and the Great Plague of London was in full force.
Isaac Newton, then a 23-year-old student at Cambridge University, escaped to his family farm, to relative safety.
The isolated environment allowed him to continue studying and experimenting in peace and quiet…
By the time he emerged from his “lockdown” or quarantine, he had invented early calculus, and made significant progress understanding both the laws of optics and gravity.
In fact, this period of his life was so productive, it later became known as his annus mirabilis – his “year of wonders”.
Fast forward 335 years…
…And I have to wonder whether there are opportunities for us, too, to follow Newton’s example, and emerge from our year of horrors with some ‘wins’ under our belt.
I’m not suggesting we’re going to discover new laws of physics, or even invent a new way of doing business…
And of course, it goes without saying that for many people and businesses, simply surviving this crisis is the only win that is necessary.
But where possible, surely we can use some of this time productively, to strengthen ourselves and our firms long-term.
There are endless ways in which this can be done – I will leave it to you to find the one that suits you…
…But in the meanwhile, here are my 4 suggestions:
- Take a course. Since most of us are working from home, we are saving enormous amounts of time on our commute to work.
Use that time to enrich your knowledge and give yourself new skills, by taking a course.
Earlier this year, the Kreston team published our training brochure for 2020, detailing all the webinars, online courses and films we’re going to be releasing this year, options for bespoke training, and more. And it’s updated every month!
You – and members of your team – can use them for self-study, or as part of group Continuing Professional Development activities. Many of the resources are free-of-charge.
You can also access many online courses delivered by partners such as AICPA and CPA.com, at a special discounted rate we have negotiated for you.
Email me for a copy of the brochure.
Or how about using this time to take a course in a completely different area – for example, completing one of Google’s fantastic courses in digital marketing, public speaking, communication, negotiation, time management and many other topics?
These can give you valuable skills to advance your career and broaden your opportunities – explore Google’s courses here.
- Network with other Kreston firms. Another way to use that time you’re saving on commuting each day?
Call a colleague in another Kreston firm somewhere else in the world, and strengthen your connection.
The closer we are, the better we know each other, the more we talk to each other, the stronger we will be as a network…
The better you will be able to serve your clients…
And the more business opportunities you will uncover for your firm.
It’s somewhat ironic, but being stuck at home is the perfect time to network. So consider making those calls….
- Record webinars for your clients. This is also the perfect time to deliver extra value for your clients. Just like you’re using this time to learn more skills, so are they!
So why shouldn’t they learn from you?
Record some webinars or videos for them around financial concepts, financial management, tell them about the biggest mistakes you see companies making again and again, or even give them some education around personal finance.
By offering them free, useful content, you establish yourself as a leader and show them that you care, in good times – and in bad.
And who knows what business opportunities may emerge as a result?
- Innovate! As long as we’re working from home, our normal processes and habits will be disrupted. It’s the perfect time to look at the way you usually work and consider whether there is any way to optimise it.
For example, now that you’ve become used to conducting meetings over Microsoft Teams or Zoom, are there any improvements you can make to the way your meetings normally run?
Now that you’ve been working at home for a while, are there any new initiatives you can take to keep your team connected?
Or is there anything you’ve learned during this time, that could translate into a better service for your clients?
Change is being forced on us right now, but that’s a chance to look at everything we do with new eyes and an open mind.
We’re already adapting enormously, so why not take this opportunity to implement other changes you may have been considering for a while… Or to challenge clunky ways of working, which may have become ingrained?
As Newton discovered, there is opportunity in isolation. Let’s seize it.
- Published in Blog
By Liza Robbins.
It was the recession of 1991.
In America, McDonald’s saw its sales decline by 28%.
Meanwhile, Pizza Hut sales grew by 61% – and Taco Bell sales grew by 40%.
Can you guess why McDonald’s lost ground – while its two rivals flourished?
It wasn’t that Americans suddenly decided they preferred pizzas and Mexican food to Big Macs…
The answer is far simpler.
McDonald’s dropped its advertising and promotion budget because of the downturn…
…And Pizza Hut and Taco Bell, taking advantage, decided to significantly increase theirs.
I think there’s a lot we can learn from this – and from the hundreds of other examples and studies, spanning more than 100 years, that tell a similar story.
When times are tough, you should think twice before you stop marketing, or significantly trim your marketing budget.
Now, I know that’s counter-intuitive.
At times like this, you are probably eager to cut costs. And marketing is often one of the very first expenses to go.
Plus, we’re not selling pizzas….
…and none of those companies were trying to sell during a lockdown!
But there are good reasons why even today, during the Coronavirus crisis, you should continue marketing if at all possible. (To be clear, if you are quite literally fighting for your firm’s survival, your priorities and options may be very different, and this advice would not necessarily apply.)
First, this is the precise point at which many of your competitors will cut their marketing.
As Pizza Hut and Taco Bell discovered, this gives you an opportunity to capture your target market’s attention – and their business! When they’re not hearing from quite as many other firms, you can stand out.
Second, advertising costs may very well drop during this period, particularly on social media, because again there is less competition. This is already happening on Facebook, and is doubtless happening on other platforms as well.
Third, because during any kind of downturn you need new clients – and marketing is your best tool to get them. Why, at the very moment when you need your best weapons, would you drop them?
And last, but most importantly, because there are opportunities to be had.
I know that many people believe that in current circumstances, no one is going to switch their accountant.
But that’s not necessarily true.
Let me give you an example….
Just last week, one of our Cyprus firms, Kreston Ioannou & Theodoulou, won three new clients!
The way they did it was simple. They published frequent information about their government’s initiatives to help companies through Coronavirus.
Several companies asked them for further explanation, which they provided. And then, when these companies asked them for the bill, they said there wasn’t one! The service was free-of-charge.
Impressed by their helpfulness and initiatives, three of these companies asked them to start handling their accounts.
As the Cyprus example shows, during this very difficult period you need to change your marketing messages and focus.
Consider carefully what issues are likely to be most resonant for your target market while the Coronavirus crisis is ongoing – whether that is accessing financial help from the government, managing cashflow, recovering from crisis and so on – and focus on these.
Or you could style yourself as specialist Coronavirus advisors for a particular sector…
Be relentlessly helpful, because your potential clients are struggling with enormous levels of uncertainty right now, and are looking for leadership.
Either way, heed the popular saying – “When times are good you should advertise. When times are bad you must advertise.”
- Published in Blog
By Liza Robbins.
Is your firm ready for the Coronavirus?
The last few months have exposed just how vulnerable our economy and our businesses are, in the face of this catastrophic, unforeseen event.
We have already seen some businesses endangered overnight, as their clientele have disappeared or their supply chains have collapsed. Others are watching their clients and suppliers struggle, knowing that they will soon feel the knock-on effect.
Make no mistake: The human cost is tremendous. Both employees and employers are at risk of losing their livelihoods out of the blue, and many will struggle to recover from this blow.
This is a risk we, in the accounting industry, need to take very seriously as well.
That’s why I picked up the phone to speak to David Rosenthal, an associate at Jeremy Hyman Associates, who specialises in business continuity here in the UK.
He told me that it was not uncommon for businesses to be caught unprepared by serious events which threaten their operations.
“Most businesses will have elements of a business continuity plan, but it’s usually not up-to-date, current or effective.
“It’s a question of priorities – most businesses don’t pay this enough attention until they face a disaster, by which point it can be too late.”
He pointed out that while these events are rare, they are hardly uncommon.
In addition to the Coronavirus, there are numerous examples of businesses affected by cyberattacks, critical IT failures, local terror attacks, natural disasters affecting their supply chains and so on.
So you need an emergency plan.
Step 1, he says, is to put together a disaster recovery team.
“Irrespective of what needs to be done, you need to identify the people responsible for putting together the plan, and executing it.”
Their first job is to assess the risks to your organisation, whether these involve tech (for example, your servers go down and you can’t access data), your people being unable to reach the office, economic disaster and so on.
Then they can put together their plans.
David recommends working out what threatens the very survival of your business, especially in the first 2-3 days, and mitigating those risks.
Cashflow and payroll are often key.
“If you get your bills out 48 hours late your company will survive, but if you pay your staff 48 hours late, your staff may experience serious issues around paying their rent or mortgages, and that could be a very significant issue for you.
“Similarly, if you don’t take care of cashflow, that could affect your entire supply chain and survivability.”
You must also consider what documents and resources you might need to access in the immediate aftermath of a disaster.
For example, he asks, “Do you have a list of all your employees and clients and their contact details? How about passwords to log into your systems remotely? Do you have access to emergency funding to pay your staff, if for any reason your payroll people are out of action? And what about access to your clients’ records?”
The plan must specify how often you are going to backup these critical documents or resources, and where they are going to be stored, in case your main site is inaccessible.
“You need a backup site that is far removed from your primary site,” he notes, adding that after 9/11, Lehman Brothers’ backup site was within 1 km of the Twin Towers, rendering it effectively useless.
Finally, your Disaster Recovery Plan must be continually tested for effectiveness and refined.
“This is where most companies fall, irrespective of their size,” says David. “People leave, risk profiles change, and so do your services and priorities. The recovery plan that was right 18 months ago is probably out-of-date today.”
As examples of best practice, he cites Societe General – where he was formerly COO – which updated its staff’s contact details every quarter, and Merrill Lynch in London, which sends staff to work at its “emergency” site every quarter, to make sure that they can operate from there smoothly.
“There are no end of cases where companies set up IT systems so their staff can work from home in an emergency, but when it comes to it no one has the right logins or the IT guys just aren’t available,” he says.
The biggest mistake companies make, he adds, is to take “a naïve approach to risk – setting out solutions which are one-size-fits-all.”
For example, they might prioritise having senior people available, while a PA, admin or HR staff might be more valuable in an emergency. Or they send their entire teams to one alternate location, whereas in the case of a virus, teams should really be split or work from home.
Ultimately, he says, if you do not take these actions you are risking your future, your relationship with your clients and your reputation – and potentially failing your employees, to whom you have a primary responsibility.
When it comes to accounting firms, he adds, “You talk to your clients about managing risk, but how can you talk about this authoritatively if you don’t manage your own risk?”
I hope that when the immediate pressures of the Coronavirus emergency are over, we will all take what has happened as a prompt to put in place a serious, effective disaster recovery plan.
Our futures depend on it.
I am free to talk to any of our Kreston members, should you wish to discuss this further. In this situation it really is important that we all keep in touch and support each other.
- Published in Blog
By Liza Robbins.
Last month, Marie-Laure Delarue became EY’s first Global Vice Chair – Assurance.
Her appointment brought the share of women on EY’s most senior management body to over 37%.
The announcement was made with great fanfare, and the appointment was celebrated as great progress for women…
…But the truth is, it left me underwhelmed.
That this is still seen as a significant milestone in 2020 shows just how slowly our profession is developing, when it comes to women’s issues.
But was this perception widely shared? How do other women in the industry see the progress we’ve made, the challenges we face, and the steps we still need to take to support women in accountancy?
I set out to find out.
In honour of International Women’s Day, which we celebrate this Sunday, I spoke to three notable women on our Future Leaders programme to get their views. The discussion which ensued was, by turns, inspiring, challenging and thought-provoking!
There seemed to be across-the-board agreement that the industry is still male-dominated, particularly at the top, and that it is important to have more women in positions of influence – although they were not insistent on a 50/50 ratio.
However, there was a nuanced understanding of what caused the imbalance.
The women I spoke to did not blame discrimination or sexism, and (happily) felt that there were genuinely equal opportunities in their firm.
Instead, they said, some women simply did not want to reach “the top” professionally, because they wanted a good work / life balance which would leave them more time to spend with their families.
“I don’t think that gender stands in the way for us,” says Jennifer van den Berg, tax manager at Kreston VDN in Belgium. “There are lots of opportunities, but you have to grasp them and aim for them.”
Does this mean that there is nothing more for firms to do, to help women achieve in the workplace? No.
The women seemed to feel that, all too often, firms still discounted women who wanted an active family life. They want firms to redefine what is considered “normal” in this context, and do more to support women so they did not have to choose between work and family quite as often…
“When clients tell us they can’t make certain meeting times we switch things around for them. We need to practice what we preach, and treat our own staff the same way,” says Jo White, director of tax advisory at Kreston Reeves in the UK.
Everyone recognised that this process was already well underway – with flexible working cited as one of the most significant advances for women in recent years. But more needed to be done to make this an accepted option.
“It’s not enough to have an official policy if you get ‘that look’ when you leave the office early,” says Jo White. “We need to have more men using flexible working to normalise it. It shouldn’t matter when or where you work, as long as you get the job done.”
Of course they are right – flexible working benefits everyone, dads as well as mums, single people and anyone with family responsibilities – and should be regarded as a human issue rather than a gender issue.
Another factor sometimes holding back women is their own lack of self-confidence, says Juanita Cid, Salary Partner at Kreston Lentink Audit BV in the Netherlands.
“I frequently see men being more assertive – about their own needs and goals, standing up for themselves, and about offering up their own opinions in meetings.”
“Women often feel they need to prove themselves more, and sit in the shadows because they don’t feel confident enough to be bullish,” agrees Jo White. “The men, by contrast, just push through.”
Assertiveness, however, is a skill that can be learned, and the women were eager to see firms offering more “soft skills” training to all staff – “resilience and confidence, which you don’t learn in accountancy exams,” says Jo White.
One way to learn soft skills is through a mentoring programme. Interestingly, the women thought it was important not just to be assigned female mentors, but male mentors as well.
“Wherever they are in their career, they have done it in a different way. I’d like to understand more about what drives them and how they achieve day-to-day,” says Jo White.
Ultimately – and I suspect this is a generational thing – it was striking how resistant these successful women were to being pigeon-holed through the prism of gender.
“We need to stop thinking in boxes like this – that’s the problem!” says Jennifer van den Berg. “We can’t think that men do X, women do Y – it depends on the person.”
Like the others, she did not want to see initiatives in the workplace reserved for women only, since they could help everyone.
Most of all, they wanted women to stop being defined – and treated – as “other” or different.
“We need to change what’s perceived as normal,” says Juanita Cid. “Women can approach things one way, men another, and we need to value both and be more accepting of different ways of doing things.”
“I don’t like dwelling on the fact that there is a massive issue, like women are different,” agrees Jo White. “I go to women’s business awards, but sit there thinking, why do we need it? We should be celebrating women in the context of general success, not just because we’re women.
“In 10-15 years’ time, I don’t want to have these conversations any more, because hopefully there won’t be a massive discrepancy between men and women.”
I suspect this will happen, because while it was obvious to women of my generation that we were going to have to fight tooth-and-nail for opportunities, many younger women simply take it for granted that they are equal. They have grown up in a different world!
In other words, may the day soon come when International Women’s Day is redundant…
…And in the meanwhile, here’s to the wonderful women in Kreston – and to their success.
- Published in Blog
By Liza Robbins.
“Liza, who do we have in the Ukraine?”
Kreston Ioannou & Theodoulou, a firm in Cyprus, had just joined the network.
Co-founder Michael Ioannou was eager to start making connections with other Kreston firms, which was music to my ears.
But even I was taken back when I told him about our Ukrainian firms, and he replied: “Great, I’ll go visit them!”
And he did. He jumped on a plane to meet his new contacts in person.
The result? Just a few months later, Kreston Ioannou & Theodoulou already has three tenders with one of our Ukrainian firms, and they’ve even won one together.
And when I called Michael last week, they were busy preparing for another overseas trip.
“We’re about to go to Dubai, to meet the Kreston firms there,” Michael Ioannou told me.
They have also been to visit two firms in the UK recently, and have other trips already in the diary, as well, including to Kreston firms in Moscow and Italy.
Clearly, the Ukraine visit was not a one-off!
Rather, these face-to-face talks are part of an exceptional way of doing business, from which every Kreston firm can learn.
“We have a rule that we have to develop personal relationships with every client and associate, including our Kreston associates– not just know them on paper,” Gabriel Ioannou, one of the directors and Michael’s son, says. “It is embedded within the culture of our company.”
That’s why the partners meet with local clients in person two or three times a year, and clients overseas once or twice a year. This is an enormous commitment considering that they serve clients all over Europe and the Middle East!
This practice started when several local companies with the Big 4 complained to them that they felt they weren’t being paid enough attention because they weren’t large enough.
“In Cyprus, the personal touch is key to doing business,” Gabriel says. “We thought that we could do business differently to the Big 4”.
“If you talk to people only rarely, you can easily lose their business because you have no real relationship. But when it’s personal, they’ll tell you when something is wrong so you can rectify it. And it makes it a lot less likely that they will want to switch to another firm.”
Now, of course many accountancy firms – if not most – claim to develop close relationships with their clients, and boast of “exceptional customer service”.
But this is not really attractive to prospects – and not a real differentiator – since almost everyone makes the same claims.
Kreston Ioannou & Theodoulou have done the virtually impossible, and managed to turn customer service into a true competitive advantage.
One of the keys to making the face-to-face meetings work, they say, is to talk about more than just business.
“We might ask about your wife or husband, your kids, sports,” says Gabriel. “This could be a substantial part of the conversation, because the better someone knows you as a person, the easier it is for them to refer work to you.”
(Clearly, Kreston’s belief in know, like and trust resonates deeply with this firm!)
A visit to a client or associate is also an opportunity to get new referrals. Before the visit, they ask clients or associates to invite some of their own associates and clients to meet them.
They research the potential client beforehand, and provide as much value as possible in advance – all without charge.
“We help the potential client understand what they need and whether and how Cyprus will be beneficial to their business. We give them potential solutions in a friendly discussion,” says Michael.
“Of course they can try and implement them with someone else, which might or might not work, but eight times out of 10 they come to us. Only then do we start charging for our work.”
To make client service even more personal, they employ staff who speak some of the most common languages spoken by their clients, such as Italian and Russian.
The Italian-speaking staff member will accompany the partners on their upcoming visit to Milan and the Russian-speaking staff member to Moscow.
“Clients feel more comfortable when you speak their language,” says Michael.
And they call clients a couple of times a year simply to keep up the relationship, for example on their birthday.
All this has paid off handsomely.
The firm, which has been around since the early 1990s, has grown from 10 people in 2003 to nearly 70 today, almost all organically.
“We regard our flights and hotel stays as our main marketing cost,” Michael told me. “We generate a lot of referrals both locally and everywhere we work, because the people we know all think of us when they think of Cyprus.”
And they apply this powerful personal touch not just to clients, but to local banks and other associates with whom they deal with regularly – and now, to Kreston firms.
When they joined the network late last year they discussed with me which firms might be potential business partners for them, and now they are systematically visiting them. They will also be sending a team of delegates to the Madrid conference, so they can meet as many Kreston colleagues as possible.
It’s a wonderfully effective approach which has already generated several business opportunities and at least one new client!
And I know from my own experience, criss-crossing the globe over the past 18 months or so to meet my Kreston colleagues in person, just how important the personal touch is in building long-term, valuable relationships.
So could you prioritise holding more face-to-face meetings with prospects and clients?
Or could you meet people over video conference rather than sending an email or making a phone call?
The personal touch will always pay off.
- Published in Blog
By Liza Robbins.
Two Kreston firms…
At opposite ends of the European continent…
Both looking to uncover * why * they exist….
Both aiming to inject a deep sense of purpose into what they do.
Over the past two weeks, I’ve been telling you their stories.
Bishop Fleming concluded that its ambition was to become “the most rewarding accounting firm in the UK for our clients, our people and our communities.” (Read more here.)
Meanwhile, Exco Poland decided to build a strong Corporate Social Responsibility (CSR) programme, working on environmental matters, sports and wellness, family, and community solidarity. (Read more here.)
As you can see, they came up with different answers.
But speaking to the people involved, I couldn’t help but notice that they went through similar journeys to get there!
There were several steps they both took, which ensured this was not an exercise in navel-gazing…
…but a practical initiative which truly revolutionised their firms.
So if you, too, want to give your firm a stronger sense of purpose, here are the top 6 lessons to learn from their experience:
1. Involve your staff.
In both cases, the initiative and initial direction came from the top.
But both firms included their entire staff in the process, including consulting them on the values that were important to them, and ensuring that the final vision statements were well-understood and accepted.
“We didn’t want to dilute the statement of our values by doing it by committee, so we provided a clear direction,” says Andrew Sandiford of Bishop Fleming.
“But we wanted to road-test what we came up with and take feedback on board.”
“We needed to make sure everyone agreed on the direction we were taking and had a genuine interest in what we were doing – or it just wouldn’t happen,” adds Laurent Le Pajolec of Exco Poland.
Bottom line: If you want your vision to be implemented, your staff must embrace it. When they are involved in formulating it, it becomes their vision, too.
2. Values are not enough – you need actions.
The final documents produced by Bishop Fleming and Exco Poland included specific measures necessary to support the values they came up with.
“There’s a big trend of having values which no one respects,” says Laurent. “We keep our word, so for each value, we developed a plan of action.
“This allowed us to start the process quickly and to prioritise what to do first.”
They even appointed a staff member responsible for implementing their CSR programme.
Bottom line: To embed your values in your firm, you need a plan right from the start. Simply declaring that “these are our values” won’t change a thing.
3. Consider getting outside input.
Bishop Fleming found that their purpose statement wasn’t easily understood by staff, so they brought in an external consultancy to help find the right words.
“Don’t expect a consultancy to decide who you are, but they can help you articulate it,” says Andrew.
While Exco Poland handled the process by themselves, they found inspiration for at least one of their sports initiatives from Exco France.
Bottom line: Uncovering your “why” is not simple, but others have been there before you, including other Kreston firms. The right external consultants can also help facilitate the discussion. Consider using their support.
4. Don’t rush it.
Both Bishop Fleming and Exco Poland took over six months to complete this process.There were lots of steps, including conducting research, holding workshops, testing whether their vision was widely understood, formulating a plan of action, and so on.“I didn’t anticipate how long it would take, but it meant a better result,” says Andrew. Bottom line: This is not the kind of exercise you can do meaningfully in just a session or two. If you want your * why * to transform your firm, be thorough!
5. Communicate your values to your clients.
Exco Poland is working on a formal comms plan to tell clients and new employees about their CSR programme.
“In many cases, winning work depends on clients seeing we are a responsible company,” says Laurent.
Meanwhile, Bishop Fleming talks about its values to clients at every opportunity.
“This is a ‘people business’, and having a clearly understood set of values gives them an indication of the kind of people we are,” Andrew told me.
Bottom line: Be diligent about communicating what you stand for, because this can revolutionise your lead-generation and client relationships.
6. The time to do this is now!
When I asked both leaders what they would have done differently, they were unanimous: They would have started earlier!
“Younger staff want to work for companies which have great values and act on them, and the companies we want for clients want the same thing,” says Laurent. “The big mistake was to wait so long to do this…”
Andrew’s advice for other Kreston firms is simple: “Just get on and do it.”
I encourage you to take them at their word!
- Published in Blog
By Liza Robbins.
If you walk into Exco Poland this week, you’ll find a colourful scene.
The firm has literally just finished decorating its offices with flowers and plants.
“When we moved into our lovely new office, which was open space, we started to have more people with headaches and stress,” General Manager Laurent Le Pajolec told me. “We realised we needed to take steps to improve the office environment. Providing more greenery is part of that.”
The team at Exco Poland can expect many more changes in the coming months, because the flowers are just a small part of a wonderful new scheme to infuse Exco Poland with a sense of purpose and mission.
It began well over a year ago, when Laurent realised that the firm was at a disadvantage, because they did not have a CSR (Corporate Social Responsibility) programme.
“We have lots of younger employees, and we know that they want to work for a company where they are not just doing a job, but where they can change the world,” he explained to me. “They’re looking for companies which engage them and which behave responsibly.”
At the same time, he could see that their clients all had CSR programmes, and it was becoming expected for a company their size.
“If we don’t want to fight only on price, we have to show that we are up-to-date and relevant in areas like CSR, GDPR and security.”
They embarked on an extensive consultation exercise with employees, to help decide which values were important to them and which causes they were going to promote.
Ensuring that the entire team was on board, and getting their buy-in right from the start was crucial for the programme’s success.
“We needed to make sure that everyone understood and had input into what we were trying to do, or it won’t happen,” says Laurent.
Eventually, they settled on four core values on which they wished to focus: Sport and health / Wellness; The environment; Family; and community solidarity.
To make sure that the list was implemented, they appointed a full-time staff member who would be responsible for CSR, because they recognised that busy staff members would struggle to get this launched.
They ensured that there was a comprehensive list of actions to follow – not just a general statement of values.
And they decided to start with small initiatives, building up the scale of their activities as they went along.
Hence, the flowers. But in the six months since the scheme launched, there has been a whirlwind of activity and of inspiring initiatives.
For example, they were put in touch with an organisation helping children in hospital, whose accounts were a mess, and helped them sort it out pro bono. Later, two staff members volunteered to visit the sick children, building the relationship further.
There is already an ambitious plan afoot to help young sportspeople find part-time work in business, so they have a reliable income while training.
They organised a competition to see which team could take the most steps in a week, as well as running sessions (“We got the idea from Exco France,” says Laurent, “and it drove some people to take up sport for the first time. We’re always sitting in the office – this reduced stress!”).
And they have already started measuring their carbon emissions, so they can figure out what they need to do to reduce emissions, and how many trees they need to plant in order to offset their remaining emissions.
The bold aim? To become the first accounting firm in Poland with zero carbon emissions.
And the impact?
Laurent says that the consultation exercise was useful in and of itself, because it forced a valuable discussion about the firm’s aims and values, and also required a strong focus on communication.
Since the programme was launched, “we’ve seen an improvement in the atmosphere, staff are more engaged and people in different teams and offices are better integrated, because they work together on volunteering projects.”
They are developing KPIs so they can accurately measure the difference the programme is making on recruitment and retention of staff.
Meanwhile, the firm has started talking about the initiatives publicly, and Laurent says that clients have noticed – and love it.
“They can see that we’re a responsible company.”
When I asked him what he might do differently next time, he says only, “I would have done it earlier! The big mistake was to wait so long…..”
- Published in Blog
By Liza Robbins.
“People used to be focused on doing their job. But now they see things differently. They’re here to support the firm so that it’s a rewarding place.”
Imagine having staff so engaged and so invested in what you do!
I bet that most organisations would love to have a workforce like that…
…and would give anything to discover how to create one.
So today I’m going to reveal the secret to you.
It goes back to the mission I set you in my last blog post: To develop a really strong sense of purpose for your firm – a really strong sense of * why * you exist.
Let’s take a step back.
The quote I opened with comes from Andrew Sandiford of Bishop Fleming, one of Kreston’s UK firms.
Two years ago, when he became managing partner, he decided to take a fresh look at what his firm stood for and was all about.
“We had been hugely successful, but we’d achieved everything we could with our old model,” he told me recently. “It was time to renew the way we worked.”
Technically the firm already had a vision statement, which was to be in the top 30 UK firms.
“But we realised that doesn’t mean a great deal, it’s just a bland statement saying we want to grow. There was no articulation of why….”
“In fact,” adds Andrew, “I found 25 different statements of our core values – there was complete confusion about what we stood for.”
So Andrew gathered the partners to discuss what was important to them.
“We identified some key themes about being relationship-led and the power of experience over knowledge. We tried to get away from clichés like ‘value added’ and go deeper, to uncover what that really meant to us.”
Eventually, the Bishop Fleming leadership settled on a vision, but instead of publishing it far and wide, they “spent six months trying out the ideas, to test if they made sense.”
It was lucky they did, because they discovered that the values they had articulated were not easily understood.
“We had tried to encapsulate our thoughts in nice, snappy language, but it didn’t work. It sounded like a bunch of accountants trying to be creative!” laughs Andrew.
As a result they brought in a firm of external consultants, who ran focus groups with staff to make sure that everyone understood the vision in the same way.
So, for example, they had previously talked about achieving “a one-firm culture”, but they discovered that this meant something different to each staff member.
Eventually, they formulated their new vision – or rather, as they prefer to call it, their ambition (“because that is real language people can understand, not management-speak,” says Andrew):
To be the most rewarding accounting firm in the UK for our clients, our people and our communities.
This is supported by a detailed explanation of what “rewarding” means to them, the 5 values underpinning this statement and a short list of behaviours necessary to realise this “ambition”.
“The question was, how do we make this real?” says Andrew. “We knew that having a fancy statement wouldn’t mean anything unless we walked the walk.”
The key, he says, is to “test everything we do by bringing it back to our ambition, whether that’s pitching for a new client or hiring a new member of staff. If it doesn’t help us become the most rewarding firm, we shouldn’t be doing it.”
The firm encourages staff members to call out behaviour that does not fit in with their new values, and refers to the values at every opportunity – during workshops, in press releases, in training and in Andrew’s weekly blog.
And now we come to the impact – which has been far-reaching.
First, says Andrew, it has helped the firm behave with more consistency, because everyone clearly understands the firm’s goals and expectations.
Second, it has changed the company’s management style – empowering staff.
A few years ago, says Andrew, the company had lots of rules.
“But because our values are now so clear, we don’t have to tell people exactly how to do everything. They can judge for themselves whether their actions support our values and they’ve become more creative and entrepreneurial.”
“People used to be focused on doing their job. But now they see things differently. They’re here to support the firm so that it’s a rewarding place.”
And clients have loved the change, too.
“It gives you something to talk about other than ‘just’ accounts. Prospective clients want to talk about the kind of people we are and having a clear set of values makes it easier for them to decide whether they’ll get on with us.”
The bottom line is that a clear sense of purpose transforms firms – and I’m going to give you a second Kreston example next week, so watch out for that blog post!
- Published in Blog
By Liza Robbins.
What makes Apple products so compelling and so popular?
After all, they’re just computers, phones and smartwatches…
Yes, they’re stylish – but there are other companies producing attractive computers and phones and smartwatches.
And yes, they work well – but so does the tech produced by many of their competitors.
There’s one way in which Apple products stand out, though.
When their rivals talk about their products, they tend to describe what they do and how they do it. (“We make great computers, which are very user-friendly and well-designed.”)
But Apple talks about itself differently….
Its messaging focuses on why it creates its products.
Again and again, we hear that Apple always aims to challenge the status quo and – as its slogan puts it – to “Think different”.
That’s the reason its products are so user-friendly and beautifully designed….
…But that’s not really what customers are buying (or what motivates staff).
They’re buying into a vision, an attitude and a mission statement – which is far more inspiring!
As Simon Sinek, whose TED talk on this subject went viral several years ago, says: “People don’t buy what you do, they buy why you do it.”
Read that sentence again, because it’s key!
Every great leader and every great company, he says, starts with a strong sense of “why”, and communicates that both to customers and to employees.
Only afterwards does it get into the relatively dry details of “what” it does and “how”, because while they are important, they are never as emotionally compelling as “why”.
If you have never watched Sinek’s TED talk – which has over 47 million views – you should check it out here.
But before you head over to watch his talk, let’s apply his idea to what we do.
Last week, I gave you a deep, compelling reason why we are auditors: We help society function smoothly by creating trust in businesses, financial institutions and financial transactions.
What about your firm?
Why does your firm exist?
What is the inspiring vision, which clients and staff will want to be part of and buy into…
…And which will make your firm the obvious choice, even if what you do is actually not that different to your competitors?
Finding a good answer is not always easy.
Following Sinek’s process, you should think about the origins of your firm, the defining moments in your history, the most significant moments of impact you have had on your clients, the people who have influenced you, your highs and your lows…
…And try and find connections.
“As the process unfolds, one or two of those nuggets will seem to shine brighter than all the others,” he writes in Find Your Why, the book based on his TED talk.
“They will feel bigger, more important. They will shine so brightly that you’ll point to them and say, ‘That’s me—that’s who I am,’ or ‘That’s us—that’s our team.’”
Finally, you will be able to narrow these themes down to a single statement, summarising how your firm contributes to the life and success of others, and the impact of that contribution.
That vision can revolutionise everything you do.
I mean, who would you rather buy from, and who would you rather work for……
The firm which says it prepares your year-end accounts by reviewing your bookkeeping records?
Or the firm which says it “Empowers CEOs to understand their numbers, so they can grow their business faster and with more confidence” (And one of the ways it does this is by providing excellent year-end accounts)?
And which firm, do you think, will inspire you to come up with better, more innovative ideas about how to serve your clients? Which will have the more engaged, enthusiastic staff?
The one with the clear mission, obviously.
But of course, empowering CEOS is just one of infinite possible “whys” for your firm.
Early in 2020, make it a priority to gather your team together – and find your “why”.
- Published in Blog
By Liza Robbins.
It’s that time of the year when people are thinking about the passage of time…
Looking back on the year that has just ended, and asking ourselves what worked for us, what made us happy, what has been fulfilling in our lives…
…And looking ahead to 2020 and beyond, planning what we want to do better, what we want to achieve and what changes we want to make.
For many, this will involve spending more time with friends and family, taking on new hobbies we are passionate about and pursuing projects we feel will be worthwhile.
In short, we’ll be looking for ways to add meaning to our lives.
It’s only natural, because most people want to live in a way which is significant and purposeful.
The same is true in business.
Yes, for some people profit will always come first. But most of us care about building a decent society and want the way they earn a living to have a positive impact.
Successive surveys have shown that Millennials choose working for purpose rather than paycheck, but I think that the need for meaning in the workplace cuts across all generations.
So this is a good time to talk about the meaning of our work.
We all know the stereotypes about accountants being dull bean-counters…
But that’s like saying that Michelangelo “just” painted a ceiling.
The truth is that the role we play is essential to civil society.
In fact, it underpins society!
Without good financial systems, society cannot function smoothly, just as it cannot function without a good legal system.
And without the kind of checks-and-balances we provide for the financial system as auditors, accountants and tax advisors, people will not be able to have confidence in society, either.
It’s hard to see how essential that confidence is until things go wrong.
Every Briton remembers the near-collapse of Northern Rock bank in 2008, which heralded the beginning of the financial crisis in the UK.
When people thought that their savings might be at risk, panic broke out, and long lines formed outside every branch, consisting of people desperate to withdraw all their money.
It was the first run on a British bank in 150 years, showing how quickly trust can erode in core financial institutions when people feel they are not being properly run or supervised.
And in every country, people need to trust that businesses and other institutions are having their finances properly monitored and that their financial interactions are above-board, in order to invest, save and spend their own money with confidence.
They couldn’t do this without us, and we should take enormous pride in that.
In fact, we should do our utmost to instil this sense of purpose in our teams, because everyone works better when they are doing work they feel has broader importance.
Giving our staff a compelling reason for why they do what they do will make them far more engaged and motivated.
And when our clients pick up on this, not only will they will they value our work more highly, they will enjoy working with us more.
Over the next few weeks, I’m going to explore more deeply how we can give our companies a deep sense of meaning, and the various ways we can use this to push ourselves, our teams, our clients and our firms forward.
- Published in Blog
By Liza Robbins.
We’re coming towards the end of the year…
So just before we move on to new topics and new learnings, I’d like to take a moment to look back on some of the most popular pieces we’ve published over 2019…
…As well as a few of my personal favourites.
They are mostly case studies of Kreston firms doing wonderful work, and insights I’ve gleaned or come to in conversation with you, our Kreston members. There is so much to learn from each other!
Please do check out these articles (especially – but not just – if you missed them first time round).
I hope they will provide inspiration well into 2020:
>> How to get your succession planning right:
If you want to retire one day, you need to have a good plan in place to transition from your own leadership to the next generation.
Without that, not only will your firm struggle when you’re gone… But your own retirement plans and your legacy might be in jeopardy.
Unfortunately, too many firms leave this too late – or don’t plan for succession at all.
We tackled this from several different angles…
Check out my piece on Why succession planning is crucial for your firm’s future, then read 3 Tips to Improve Your Succession Planning, 3 Ways to Nurture Your Future Leaders and finally, A Radical Solution to Succession Issues.
This could be a good thing to address in 2020!
>> How to generate more business for your firm. Kreston GCG in the Ukraine has grown by 50%, on average, every year for the past 3 years – by creating a reliable, repeatable system to bring in new work. Find out what’s involved here….
…Then discover how Kreston Menon became a superbrand (quite literally), how to use networking more efficiently to drum up new business, and even, how to salvage the situation when a prospect says ‘no’!
>> The women’s programme that generated millions for one Kreston firm.
This is one of the most impressive initiatives run by any Kreston firm!
CBIZ Women’s Advantage has not only helped thousands of women gain valuable business skills, prepare for advancement and bring in millions in new business, it has given CBIZ itself a competitive advantage.
Discover what the programme involves – and why and how you can create your own version – here.
>> Why you should offer cybersecurity services to your clients.
You should continually be looking for new sources of revenue, and cybersecurity services are an up-and-coming opportunity for accounting firms.
Luckily, it’s one that Kreston firms can offer easily – discover more here.
>> How to show your prospects that you deliver quality.
We know that we deliver superior services…
The problem is that every accounting firm on the planet claims that quality is a priority, so if you talk about quality in your marketing, not only does it not differentiate you – it makes you sound just like everyone else!
So how do you use the quality of your services to win new business?
That’s it for me this year!
I’m looking forward to sharing many more insights, ideas and case studies with you in 2020 – please let me know if there are any topics you’d like me to broach.
In the meanwhile, thank you again for being one of my readers, and wishing you a happy, successful and prosperous year ahead!
- Published in Blog
By Liza Robbins.
Do you know the 2nd quickest way for your firm to grow?
I know, I know.
It sounds like a trick question.
But there’s a real answer.
The 2nd quickest way for your firm to grow is to get more business referred to you from other Kreston firms.
Their clients should be relatively easy and quick to sell to.
Because they already do business with one of your “sister companies”, they already feel like they know you and trust you. They have already “bought in” to the Kreston brand, and have a good experience with it.
If only we could all refer business to each other more frequently, we would all grow so much faster!
Because I know this is often easier said than done, here’s a recent example which I found very inspiring.
About six months ago, Kreston firm Duncan & Toplis in the UK took on a new client. SmartMT provides consultancy services and software in the engineering sector, and was looking for tax advisory services locally.
But when Mark Taylor, head of tax advisory services, asked about SMT’s international group, he discovered that it was growing fast overseas and had many subsidiaries abroad.
He immediately told them about the international Kreston network, and discovered that they were very keen on using it.
Within days, he had connected them with Kreston firms in India, the US, Korea, Japan and China – all of whom gained a new client as a result of Duncan & Toplis’s initiative.
That is the power of an international network.
Working together, we can all win.
There is much we can learn from this about how to refer business more efficiently – so I caught up with Mark Taylor, to get his insights.
It is crucial that you go into every potential new client relationship with “Kreston at the front of your mind,” he told me.
“Prospective clients are probably a lot more excited than you might think about learning about our offering around the world. And if it’s not something they’re interested in, you haven’t lost anything.”
He suggests looking for “hooks” in the conversation that allow you to talk about Kreston’s international network.
To make the referral work, though, takes a lot more than simply raising the idea.
“Speed is of the essence,” Mark told me. “As soon they bought into the idea, we made it happen.”
He put SMT in touch with the right people in the Kreston firms the very same day the idea was floated.
“You need to make sure you have a really good network, yourself, amongst other Kreston firms, to make these connections quickly,” Mark says.
And when another Kreston firm approaches you with a potential referral, you have to act on it immediately, as well.
“Members have to be very responsive,” he says. “Our client was impressed that it happened so quickly – it re-enforced to them that this is a strong network and that working with us is a good thing.”
There is no question that the client has gained, by becoming an international Kreston client. The network has been strengthened. And so has Duncan & Toplis, by making the introductions.
“It cemented our position with the client,” says Mark. “We added value and proved we can do what we say we can.”
I’m sure that by now you’re wondering why this is only the second quickest way to generate new business…. And what #1 is!
And the answer is that the very quickest way to grow your firm is to get more business out of your own clients.
You see, most firms put enormous effort into chasing brand-new leads.
But these can be costly and time-consuming to reach and follow up.
Your own clients, by contrast, already know, like and trust you. And they’ve already proven that they’re willing to spend money with you.
They are much easier to convert – and so, when you think of developing new business, the should be your #1 target.
- Published in Blog
By Liza Robbins.
Once a month, if you walk into the WeWork LaFayette offices in Paris, you’ll see a familiar sight.
You’ll be greeted by a banner featuring Kreston’s logo, as well as the logo of Exco Nexiom, one of our French firms.
And behind a glass wall, you’ll notice Djamila Bendellali, partner at Exco Nexiom, as well as one or two other directors.
They’re there to offer their free advice to local entrepreneurs working in the building – people setting up their own companies, owners of small firms with just a few employees… plus a few budding businesspeople whose rapidly-growing empires are turning over significant sums.
Many accounting firms would ignore the people in the first two categories, because they do not currently have much money to spend on our services.
Djamila has a different approach:
“Today’s entrepreneurs are tomorrow’s CEOs of a good company – so don’t look down on them!”
At our recent conference in India, she told delegates how she built trust and long-term relationships with these entrepreneurs. Her session was so valuable that I caught up with her afterwards, so I could share some of her insights with you too.
Djamila, who is in charge of start-ups at Exco Nexiom, told me that starting to build up relationships with entrepreneurs when they are very early in their journey is a strategy that has paid off.
“Many of our clients used our services or had contact with us when they were solopreneurs, and then came back to us when they had built up a much larger company,” she said.
By talking to them before any other accountancy firm takes them seriously, you bring them into your network very early – essentially bypassing the competition.
Her strategy to capture their attention – and eventually, their business – is to deliver “value in advance”.
So, each month, Exco directors offer a 2-hour “financial clinic”, where they give entrepreneurs completely free advice on taxes, payroll, how to set up a company – literally anything within their accounting expertise.
“They usually have very precise questions,” she says. “We try to understand what they’re trying to build and show them the best way to do it. They like the fact we understand that they are looking for growth.”
Locating these sessions at WeWork – the same shared office space where Kreston Intl is headquartered in London – was a strategic choice.
“When WeWork opened in France, we knew that their offices would be full of entrepreneurs and saw the opportunity to meet them there,” Djamila told me. “You have to go where the entrepreneurs are.”
No one is turned away from getting free consultancy – although often, at the end of the session, the Exco representatives tell the entrepreneurs honestly that they can’t help them… At least not yet.
No matter – because they have delivered value, they have created a bond.
In addition to meeting people 1-to-1, the sessions create a wider visibility for Exco, as they are advertised on WeWork’s app and in the building during the day.
They also hold regular “lunch and learn” sessions in the building, where they present on financial topics which will be of interest to entrepreneurs.
“We always hold these events where we’ll be seen, so people know we’re there. We have our pictures displayed prominently in the entrance, as well as Kreston and Exco’s names.
“That alone prompts conversations – people asking who we are and how we can help them.
“The challenge is to make accountancy interesting! We try to show how we deliver value rather than focusing on anything too technical, and that makes people want to work with us.”
Running these sessions is a small investment on their part, and just a tiny part of their overall marketing strategy – but there some larger lessons we can all learn from this approach.
First, building up a good sales pipeline is not something that happens overnight.
To develop a steady stream of clients, you have to think long-term – because the marketing and sales work you do today may take months, if not years, to pay off.
As the saying goes, the best time to plant a tree was 20 years ago….
…And so if you want to grow in 2020, 2022, 2025, 2030, you need to get your marketing in gear right now.
Second, we have to open our minds to seeing opportunities where others do not.
Djamila is looking at these small business owners – many of them solopreneurs – and seeing their potential 2, 5, even 10 years down the line, while many other firms ignore them.
That strategy may take a while to pay off – but when it does, it will give Exco a competitive advantage.
Lastly, there is the value of the “soft sell”. The sessions Exco provides do not promote their services very directly and aggressively. But that does not mean that they are not selling!
Showing people how you can help them – by providing “value in advance” – is a powerful sales method, because they get a taste of what you can do whilst building the relationship.
- Published in Blog
By Liza Robbins.
Rich Howard had a client doing business in 5 countries.
Because he had visited several of the Kreston firms in each of those countries, he was able to introduce his client to the local firms quickly and coordinate the delivery of the global services more efficiently than the client’s prior Big 4 provider.
“The client was able to benefit from their local knowledge and they loved the fact that I could help them do business everywhere,” Rich, who is a MHM Shareholder and CBIZ Director in Southern California, told me.
For Rich, this epitomises what’s special about the Kreston network.
“It’s all about the relationships we can create – between our members, and with our clients – and the additional value we can create as a result.”
And over the next few years, he’s going to be working to help Kreston firms deliver more of that.
You see, this September Rich became our brand-new Chair.
You may already know him, because he has been a member of the board since 2014.
Or perhaps you heard him speak at one of our recent world or regional conferences…
….Or even welcomed him to your office – Rich has been to 57 countries and makes a point of visiting Kreston firms wherever he goes!
But either way, you can expect to see a lot more of him in the future.
“I’ve been involved in Kreston since 2005, and I’ve loved watching it go through quite a journey,” he told me during a quiet moment in Delhi.
“Kreston started as an association, evolved into a network, and over the last few years, we’ve built an impressive footprint all over the world. We’re now present in over 125 countries with over 200 member firms.
“The next step is to try and use those relationships to create even more value and business for members and clients.”
His priority over his term is to “continue developing opportunities and building infrastructure that make it easier for people to do business together. We need to create more transparency about the opportunities all over the world, showcase the success stories and give our members new ideas on how they can develop new business.”
This work has already started, with the development of the Klick replacement and referral system, which will allow members everywhere to see more easily what’s happening elsewhere in the network, “and get excited about what’s possible and want to get involved.”
Another example of how we’re going to become much more commercially focused? – The evolving format of our conferences.
“We used to have regional conferences that would meet at different times and they attracted different audiences. Unless those people came to the world conference, they’d never meet each other!
“Now in future years, we’re combining some of these events so you’ll have a chance to meet new people, build new relationships and yet still receive the technical and business value you’ve come to expect and enjoy.”
The fact that Kreston’s members know each other personally and socialise is a key advantage we have over the Big 4 and other networks, because it makes it easier to pass business to each other, he says.
“In some cases, other networks just email information and requests to each other, back-and-forth, without ever having a conversation or relationship,” says Rich, who was a partner at Arthur Andersen before joining MHM and CBIZ in 2002.
“We go to conferences together and meet each other so we can bring a personal connection to our clients when we make introductions or referrals – which compares very favourably with the competition in the way we operate.”
One of the key challenges over the next few years will be to shift from a focus on compliance services, such as audit and tax, to advisory.
“It’s hard, because these are different skill sets,” he notes.
“At Kreston, we’ll look for ways to help our members add more value to their clients’ relationships and solve problems they’ve never solved before – whether that’s involving other partners such as non-accounting firms, or maybe helping firms develop other services such as wealth management or M&A expertise.”
He acknowledges that Kreston firms do not have the same financial resources as the Big 4 to invest in emerging technologies and AI.
But he says that we can ensure that we don’t fall behind “by staying abreast of the advances in technology, implementing pilot programmes to evaluate new tools and adopting new products at the right time – without incurring the high cost of investing in the front-end development and absorbing the failures.”
We can also be more of an advisor on the forefront of helping clients identify, address and manage both the opportunities and risks involved.
In many ways, he adds, our size gives us a competitive advantage in a rapidly evolving industry.
“We are much more agile in the way we are able to create change. With a relatively small international office, we can make changes quickly, whereas larger organisations find this difficult.”
Looking ahead, he is excited about Kreston’s future. “We’re taking the organisation to the next chapter of its evolution!”
Personally, I’m excited to be on this journey as well – and hope you are too!
- Published in Blog
By Liza Robbins.
“This programme was one of the reasons I sold my firm to you.”
“I was able to get a $50,000 client because of this programme.”
“I made my decision to work at your firm, because of this programme.”
Wouldn’t you a like a programme like that, in your firm?
These are all real quotes, by the way. And they’re all about one programme – CBIZ Women’s Advantage (CWA), which is designed to attract, retain and engage talented women at CBIZ, Kreston’s American firm.
This programme (technically program, because it’s American!) is an enormous success story.
Not only has it helped thousands of women gain valuable business skills, prepare for advancement and bring in new business, it has helped give CBIZ itself a competitive advantage.
If you’re attending our world conference in Delhi, you’ll hear about CBIZ Women’s Advantage in the presentation by Kathy Rhodes.
But the programme is so valuable that I believe everyone should know about it – so I caught up with national leader Lori Novickis, so I could tell you about it, too.
The programme has three components.
First, it helps women with professional development, by running networking circles for women at different stages of their careers.
Participants work through a set curriculum together.
In addition to building skills, “this allows people from different sides of the business to work together and get to know each other,” says Lori, “leading directly to business opportunities.”
But it’s not all formal programming.
CBIZ Women’s Advantage’s book club, which focuses mostly on professional development books, has been a big hit, with 900 participants to date.
“This was the biggest surprise to me!” Lori told me. “Whether or not you like the book, it allows you to have different types of conversations with colleagues, and to create connections that might not otherwise happen.”
Second, CBIZ Women’s Advantage encourages community involvement. It has partnered with Dress for Success International, a not-for-profit that provides business attire and training for women looking to get back into the workplace.
“Their goals aligned with CWA’s goals of helping women succeed in business,” notes Lori.
But while initially the aim was simply to give back, the philanthropic work has given CBIZ’s women enormous opportunities for professional development.
“We’ve raised over $0.5 million, so women have gained fundraising and project management skills, and become more visible within the firm. A dozen individuals have served on Dress for Success boards, developing their leadership skills.
“Plus, you get camaraderie and networking by running the fundraising campaigns.
“It’s notable how much community involvement drove the other pieces.”
Finally, there is a business development component, where programme participants refer more business to each other and hold networking events to meet new prospects.
This is one of the keys to the programme’s success, says Lori: “Everything we do is aligned with the company’s business goals.”
And it has impacted the business in a big way.
Since its launch in 2007, CWA has provided professional development to the equivalent of nearly half of CBIZ’s current workforce, and brought in millions of dollars in revenue to the firm.
And it has become a part of CBIZ culture, helping to advance the company’s flexible work arrangement and Parent Program that benefits ALL its employees, regardless of gender.
To set up a similar programme, Lori says that support from the top is key – but that it takes passionate individuals at the grassroots level to make it a success.
It is also important that you determine exactly what you want to achieve, and that you make a good business case for running the programme.
“There’s always a compelling case for it,” Lori argues. “More than 50% of your workforce might be women, but if they’re less than half your leadership you need to address that.
“People want to work for a company that has equal opportunity and fairness, work-life flexibility and a safe and respectful workplace. There are also many potential clients who want to work with firms who support diversity.”
CBIZ is an acquisitive company, and Lori says that business owners frequently cite CBIZ Women’s Advantage as a key reason they choose to sell to CBIZ.
“Obviously their main objective is to better serve their clients with the national expertise and resources that come with joining CBIZ.
“But they also want to take care of their staff, and to provide them with additional professional development opportunities.”
A decade ago this was a “nice to have”. Nowadays, she concludes, a programme supporting your female talent is a “must have” to keep your firm competitive.
- Published in Blog
By Liza Robbins.
When something isn’t running smoothly in your business, you might look in different directions for a solution.
Depending on the problem, you might research technologies that might be applied to resolve the issue.
Maybe you look at your business systems and processes to try and spot what’s going wrong.
Perhaps you even examine your whole business model.
But what if I told you that all these are red herrings….
…And that ultimately, most problems in your business have the exact same cause?
That’s what the keynote speaker at our India conference later this month argues.
That’s right – Most business problems are really people problems, says acclaimed author, activist and business consultant Shiv Khera.
Get rid of the latter, and you’ll also solve the former!
What he means is that you have to understand the human attitudes behind the issues, and inspire people’s trust and motivation to generate improvement.
For example, let’s say you’re struggling to raise your sales team’s performance levels and increase their output.
A new project management app hasn’t helped, and neither has offering a bonus for hitting targets… so what’s next?
In this situation, an inexperienced leader might conclude that the problem is a hopeless team: “They don’t seem to want to work together… they avoid taking responsibility… I’ve tried everything I can think of, but they don’t change!”
Don’t jump to that conclusion too quickly, because chances are that there are deeper reasons why your team isn’t producing the results you need….
Perhaps there are personality conflicts and they don’t work well together. Maybe they do not believe in the work they’re doing (because no one’s shown them how much they contribute to the firm’s overall success). Or perhaps their manager is not giving them any autonomy, squashing their motivation.
When you understand the underlying human dynamics, you’ll understand the real reasons they behave as they do – and then you can help them change.
You see, tools and incentives work best when your team is not only capable of performing well, but also mobilised to succeed.
If the root cause of your team’s issues is interpersonal, then you need to tackle it at that level – otherwise nothing else you do will help much at all!
Here’s another example.
If your team spans multiple age groups, you may find that the millennials’ feet-on-desk, casual attitude irritates the more formal older staff, who find it disrespectful…
…And the millennials resent the way older staff expect them to be at their desks 9-5, and never notice when they work from the local coffee shop, at home on weekends or late through the night.
Individual differences in style can create deep division between your team members, impacting their output and the quality of everyone’s work…
…But if you don’t understand what’s really going on between them, you will struggle in vain to improve their work.
As a leader, your technical skill in accountancy is not enough to build a good business.
You also need ‘soft people skills’, that is, the ability to understand and motivate the people working for you.
That’s how you generate a shift in their attitudes — by building understanding, empathy, and trust within the team.
And figuring out how to resolve those interpersonal tensions is the key to facilitating easy collaboration and productivity.
I suspect that Shiv Khera will have more to say on this in Delhi, where he’ll talk about how to create high-impact leadership by building a culture of trust and accountability.
I’m looking forward to his insights – and if you’re going to be at our world conference, I hope you’re as excited as we are for all the fantastic sessions we have planned!
- Published in Blog
On May 19, 2019, the Swiss Corporate Tax Reform was approved in a popular vote. Most of the new measures are expected to become already effective as of January 1, 2020.
The reform brings an unprecedented change to the Swiss corporate tax landscape. Nearly all companies are affected by the most significant overhaul of the Swiss tax system in decades. The implementation period is short, which is why the implications of the reform need to be analysed urgently now.
- Many cantons will further reduce their corporate tax rates – cantonal tax rate incl. the Federal tax is between 12% and 14%, some of the canton do have higher taxes
- Tax neutral step-up in basis for new activities in Switzerland and for a transition period for the companies they had a tax privilege
- The existing privileged tax status (holding, domiciliary and mixed companies) will be replaced by new preferential tax rules, which are fully in line with OECD standards. The new rules inter alia include:
- R&D super-deduction
- Notional Interest Deduction
Reduction of corporate tax rates:
Lower income tax burden for a wide array of businesses without the need to meet special requirements (in addition to participation relief, which continues to exist and exempts dividends and capital gains derived from qualifying participations). The reduction of cantonal income tax rates is not directly covered by the Tax reform, but is necessary to remain attractive for companies that did benefit from a preferential tax regime.
Companies benefiting from a preferential tax regime are generally subject to a lower capital tax rate. To compensate for the loss of this tax advantage, the cantons may reduce the capital tax rate on equity relating to patents and comparable rights, qualifying participations, and intra-group loans.
Based on the official announcements of the cantonal governments, it is anticipated that most Swiss cantons will provide for attractive tax rates of 12% to 14% applicable to the pre-tax income (including federal income tax).
In connection with the new tax relief tax rate of about 10% can be reachable.
Tax neutral step-up of tax basis upon relocation to Switzerland
Enterprises moving assets, functions, business operations, permanent establishments, or their registered office or place of effective management to Switzerland may reevaluate all assets (other than participations of at least 10%) newly becoming subject to taxation in Switzerland at fair value. This step results in an income tax neutral step-up of the tax basis. In the years following this income tax neutral asset step-up, the assets can be amortised tax effectively and thereby reduce the taxable income.
Upon transition from the preferential tax regimes to ordinary taxation, the two rate model is applied. Profits attributable to the realisation of built-in gains generated under the preferential regimes, are subject to a reduced tax rate. The cantons can determine the reduced tax rate at their own discretion. The two rate model ensures a competitive income tax burden over the five-year transition period.
Based on currently applicable practices, a lot of the cantons offer already today the option of a tax-neutral disclosure of hidden reserves in case of a transition from preferential regimes to ordinary taxation under the current law (“old law step-up”).
The subsequent amortisation of the stepped-up goodwill and built-in gains results in a low tax burden (max. 10 years). The old law step-up is relevant for companies that voluntarily waive the preferential regimes before entry into force of the new tax legislation.
The impact and the alternatives should be analysed in detail.
Abolishment of the existing privileged tax status for holding companies, administrative companies, mixed companies, principal companies, and finance branches. Companies with existing privileged tax status have the following options:
- Tax status change and tax neutral step-up in basis before the new rules become effective followed by amortising the disclosed hidden reserves tax effectively in the following years;
- Request a binding decision on the hidden reserves upon the introduction of the new rules and claim a reduced tax rate on hidden reserves realised within 5 years (in all cantons).
Participation relief continues to exist; especially dividends and capital gains derived from qualifying participations remain exempt from corporate income tax.
A main element of the reform is the introduction of a patent box regime in accordance with OECD standards. The Patent Box income derived from domestic and foreign patents and comparable rights is taxed separately with a maximum reduction of 90%.
The cantons may provide that up to 150% of the expenses for research and development activities in Switzerland can be deducted for cantonal and municipal income tax purposes.
- R&D expenses are taken into account if they were incurred directly by the taxpayer or indirectly by third parties in Switzerland. In the case of own expenditure, the personnel expenditure plus a surcharge of 35% is decisive. In the case of indirect R&D expenditure, 80% of the invoiced costs.
The regime of the Patent box and the R&D super-deduction can be combined.
Notional Interest Deduction
High tax cantons (higher than 18%) have the option to introduce a notional interest deduction on surplus equity. Based on the announced intentions of the cantonal governments to reduce the cantonal tax rates, only the canton of Zurich meets the requirements for the introduction of a notional interest deduction. This is a tax deduction of an arm’s length interest rate on equity exceeding the equity required for the long term business activity.
Cap for tax reliefs of 70%
A company’s maximum cantonal income tax reduction resulting from the patent box, R&D super-deduction, and the notional interest deduction may not exceed 70% in total (i.e., minimum tax burden at cantonal level of 30% of the ordinary tax burden). The cantons may introduce a more restrictive threshold. At the moment it is unclear whether and how the amortisations on disclosed hidden reserves upon a status change under current law will be recognised for the tax relief.
Increase in dividend taxation
For direct federal tax purposes, 70% of the income from qualifying participations (at least 10% investment) is taxed at shareholder´s level and for cantonal and communal tax purposes at least 50% of such income shall be taxable.
The current law stipulates a 60% taxation if the income is derived from private wealth, and a 50% taxation in case of shares held as business asset, in some cantons the taxation is currently lower than 50% (eg. Canton Glarus).
Adjustment of capital tax (optional)
the cantons may reduce the capital tax rate on equity relating to patents and comparable rights, qualifying participations, and intra-group loans.
Reduction of cantonal income tax rates (optional)
The reduction of cantonal income tax rates is not directly covered by the Tax reform, but is necessary to remain attractive.
Based on the official announcements of the cantonal governments, it is anticipated that most Swiss cantons will provide for attractive tax rates of 12% to 14% applicable to the pre-tax income (including federal income tax). Some of the cantons/Communes will be even blow 12%.
Need for action
Every company should now take action and evaluate the impact of the changes to the tax position.
A timely preparation for the tax reform will prevent unwelcome surprises and competitive disadvantages.
The following four questions have to be answered:
- Does the company currently benefit from a preferential taxation at cantonal or federal level?
- Is it an innovation-driven company with patents or patent-like rights?
- Is there an extensive holding structure in place? Does the company have shareholders with qualifying participations and has distributable reserves?
- Is the existing structure still appropriate Is the company predominantly equity-financed and tax resident in a high tax canton (ZH)? Does the company have patents, intra-group loans or qualifying participations?
The tax reform will influence the Swiss tax landscape for the years to come. It is therefore important for companies to prepare for the future now and implement the necessary measures. We will be happy to provide you with further information on the tax reform and to assist you in shaping your future tax position together with you.
Dr. Manuel Vogel, Dipl. tax expert
- Published in Blog
By Kreston CEO, Liza Robbins.
As you know, part of our long-term vision is for all Kreston firms to bear the Kreston name one day.
Not only will this strengthen our brand identity, making us more recognisable, more prominent internationally and therefore more attractive to prospective clients….
…It will have a psychological impact on all our member firms. Sharing a name will help all of us focus on our common destiny, so we can work better together and help each other more efficiently.
Now, if your firm is not branded as “Kreston” already, you might be nervous and even sceptical about a potential name-change.
I get it! It can feel like a big step….
You might be wondering whether it will really make any difference – or might even have negative repercussions.
And you might worry about how difficult such a transition might be.That’s why I’ve asked Kreston Romania to speak about their recent rebranding at our upcoming conference in India…
…And why I’m going to share some key insights right here. (If you’re going to be at the conference, consider it an appetizer to their full presentation!)
You see, when this firm joined Kreston in 2008, it was known as BG Conta – the initials of its founders plus the Romanian word for “accounting”, suggesting a focus on compliance services.
This worked well until three years ago, when the directors decided to add “Kreston” to the firm’s name.
“The founders had retired, and our business was gradually changing,” says tax partner Eduard Pavel. “We used to be very focused on real-estate companies, but the property market was suffering, and we had to focus on new segments. To attract more international business, we needed to reflect a change in our name.”
The change was completed in several smooth steps, so it had minimal impact on business and was barely noticed by the firm’s existing clients.
This was emphatically not the case when the firm rebranded for a second time, last year!
This time, they dropped BG Conta altogether, and became “Kreston Romania”.
“The previous name wasn’t representative anymore, and compliance no longer reflects our main focus,” two of the partners told me.
They were pursuing international business even more aggressively, and were anxious to convey that they were not ‘just’ a local firm, but “part of something bigger and more international.”
To rebrand completely they not only changed their name, but moved to a new, more modern office in a buzzing campus (a bit like Kreston International has done, too….).
This better reflected the cutting-edge image they wish to convey, and also put them in close proximity to hundreds of other exciting companies, many of whom are potential clients.
And they threw a big opening party, broadcasting the change to all their clients and celebrating it on social media.
This time, the world noticed!
“Not only did our clients all contact us to wish us congratulations, but they seemed genuinely excited for us,” says managing partner Carmen Cojocaru. “They liked the fact that we are growing and were going international.”
And the name change has directly attracted new clients.
“We receive many more requests from overseas investors – which was our target,” says Carmen. “It has made us so much more visible and attractive to international clients.”
The directors believe that the name change has also helped them win international tenders, because it gives them more credibility. It has also had a positive impact on staff.
“Our team feels that they are part of something bigger and more important, and when they move on, it sounds better that they come from an international organisation. It matters to them.”
The lesson, say Carmen and Eduard, is two-fold.
First, to grow, it takes more than technical excellence.
“You need to package it well, too. The envelope matters if you want to sell your services.”
Second, “You have to be open to new approaches and to change. You can get comfortable doing things in the same way, but in today’s day-and-age, that will doom your business. If you want your firm to continue, you have to be dynamic.”
And that includes being open even to fundamental changes – like to your name.
Each firm and each country has its own unique challenges, but we are all on a journey with the Kreston brand and look forward to hearing about your future implementation plans, because as our Romanian example shows, you stand to reap the benefits!
- Published in Blog
By Kreston CEO, Liza Robbins.
Let me ask you…
When was the last time you went to a networking event, and ended up with a new client as a result?
If the answer is, “rarely”… you’re not alone.
Networking face-to-face is one of the most effective ways to meet good prospects, build useful relationships and generate more businesses, but it can feel awkward…
…And is often unproductive.
There is enormous pressure to “get through” a large number of people and hand business cards to everyone you meet.
This kind of “speed dating” rarely results in meaningful relationships.
And even if you have the best of intentions, the business cards you collect are usually quickly forgotten and discarded.
If you are an introvert (believe it or not, many successful professionals are!), these meeting can be downright scary.
It can be difficult to approach people you don’t know – especially when they’re in a group conversation. You leave feeling frustrated that you have wasted good opportunities.
So how can you make more of these valuable networking events…
….and ensure that result in new business?
Here’s the most important tip I’ve learned.
People who succeed at networking don’t simply go to events and hope for opportunities to fall into their lap.
They have a strategic plan to succeed.
In fact, the most important thing you can do to make networking a success doesn’t happen in the meeting room. It happens well beforehand – when you plan your strategy.
First, develop clear goals for your networking activities. Do you want to look for new referrers for your firm? Clients for audit or other services? Perhaps even speakers for events you are hosting?
And how many new contacts do you really need?
The clearer you are on who and what you’re looking for, the easier it will be for you to focus on the right people.
Think, too, about how to present yourself to your prospects.
When you are inevitably asked, “What do you do”, what answer will be compelling to your targets?
Of course, who you approach is just as important as what you say and I often see firms getting stuck in a pattern of going to industry events and networking only with their peers (and friends).
While this can be great for branding, peer events aren’t the place to meet new and potentially lucrative prospects.
So make it your mission to go to events that your ideal clients go to.
Before the event, request a list of event attendees and if it’s available, narrow down a list of “must meets”.
Research them, and Google their company’s latest news.
The more you know about a potential prospect’s business, the more you will stand out in conversation and be able to identify where you can deliver the most value.
Last but not least, think strategically about how you will stand out amongst dozens and sometimes hundreds of others.
For an example, at the CBIZ conference earlier this year, I was in a room of around 600 people – almost all American.
But there were two people in Union Jack t-shirts, who had come all the way from the UK. The t-shirts gave people a fun reason to approach them and a natural start to the conversation.
Of course, following up the contacts you make is crucial….
…But since we’re running out of room that will have to wait for my next blog!
- Published in Blog
The UK has recently released the first full year’s figures for the Diverted Profit Tax (DPT) – the so-called ‘Google tax’. HMRC have suggested that the yield from the tax was £281m for the 2016/17 reporting period.
DPT was intended to deal with a number of perceived tax avoidance arrangements. It targeted businesses that either had significant operations in the UK, without creating a permanent establishment, or where there were transactions between connected entities that lacked economic substance but generated tax mismatches (e.g. royalty payments between the UK and a lower tax jurisdiction).
This sounds like a great result for the UK Treasury and for the new legislation. However, on closer examination informed by a little understanding of organisational dynamics and human nature, it might not be the success that HMRC are claiming.
Included in the suggested yield of £281m is a figure of £138m, which is a total drawn from DPT ‘charging notices’. These are notices that require payment of the DPT by the ‘affected’ company. The appeal process is long; so it may be well over a year before these notices are either confirmed, or indeed overturned. As such, the actual increase in tax revenues generated from such notices may be limited. In addition, HMRC have stated that many of the negotiations over the impact of DPT turn into a more involved discussion around transfer pricing. This implies that there may well have been a standard corporation tax liability, with DPT being used as a negotiating lever.
If this is the case, then the extra tax generated may be as little £33m; and that assumes all the notices are upheld. DPT may accelerate the tax charge (as losses cannot be offset in the DPT calculation), but there may not be an overall increase in revenue raised.
The balance of yield claimed is, however, from changes in taxpayer behaviour following the introduction of DPT. HMRC have identified changes in group structures and transfer pricing policies driven by the new law. This is where human nature plays its part.
HMRC say that these changes have been identified by the customer relationship managers dealing with taxpayers. These senior tax inspectors will have been tasked by HMRC senior management to identify eligible cases. HMRC will be keen to present the DPT as a success, and therefore will be actively looking for cases that can be presented as such.
Multinational groups with operations in the UK will need to revisit their arrangements to ensure that they are DPT compliant. More importantly, they must ensure that their arrangements are properly documented from a transfer pricing perspective.
Tax Partner – Kreston Reeves
- Published in Blog
December 2018 saw changes in many tax regulations, to be initiated that month or in January 2019. These included:
- Law on Personal Income Tax (PIT Law) – amended in the domain of tax exemptions (recreation of employees), the rights of the employers of the newly established company to tax exemption, ways of determining and paying income tax on catering services, etc.
- Law on Contributions on Mandatory Social Insurance (CMSI Law) – abolishing the unemployment contribution at the expense of the employer in the amount of 0.75%, as well as a number of other changes.
- Law on Corporate Income Tax (CIT Law) – a new method of calculating the tax depreciation of fixed assets has been established, and new issues have been adopted regarding the recognition of certain revenues and expenditures in the tax balance (expenses for advertisement and propaganda, costs related to research and development [R&D], etc.).
- Law on Tax Procedure and Tax Administration – foresees the establishment of the Directorate for Games of Chance.
Here, we will focus on amendments to the CIT Law that introduce significant tax incentives. The main reason for the amendments is creating more favourable conditions for performing business activities and a better application of the provisions of the CIT Law, where most of the amendments refer to tax incentives intended for knowledge industry and investment in R&D.
The most significant amendments include:
- Change of method for calculation of tax depreciation.
- Suspension of limit for deductibility of marketing expenses, so marketing expenses are now fully deductible.
- Deductibility of R&D
- New tax incentive provides that expenses directly related
to R&D activities performed in the Republic of Serbia are
tax deductible at the double amount of the expenditure.
- New tax incentive provides that expenses directly related
- Special tax treatment of intellectual property (IP) income
- New tax incentive for taxpayers who derive income based on compensation for the use of IP, on condition that the IP is registered.
- Tax credit for investments in startup companies.
- A taxpayer which is not a newly established company performing innovative business activities, and which invests in the share capital of the newly established company performing innovative business activities, has a right to a tax credit in the amount of 30% of such investment.
- Exemption of part of the capital gains derived from disposal of IP developed in Serbia from taxation.
- Disposal of IP is the subject of capital gains tax.
- A new tax incentive has been introduced, which provides that only 20% of capital gains will be included in the tax base if derived from the transfer of full property rights on:
- Registered IP.
- Patents, in accordance with the law governing patents.
- Tax credit for capital gains tax paid abroad.
- A Serbian resident taxpayer who realised capital gains from the sale of assets in foreign country, and paid tax in that country, could decrease the calculated CIT in the Republic of Serbia for the amount of tax paid in that other country.
Jelena Mihic Munjicć
- Published in Blog
The UK has previously set out a number of scenarios which might possibly reduce friction in terms of the customs procedures at Brexit, but any changes to the current customs, VAT and excise systems will only be known following the conclusion of on-going negotiations which, as has been widely reported, are not at an advanced stage.
Although Brexit is expected to happen by 31 January 2020, a transitional period may well be negotiated that will allow time for UK and EU businesses to adjust to any new arrangements and to avoid any ‘cliff-edge’ changes immediately following Brexit.
Though the UK hopes and expects to achieve an agreement with the EU, it is also being prudent in preparing for the possibility of a ‘no deal’ scenario. In the absence of any agreement, the UK would adopt World Trade Organisation (‘WTO’) terms which include imposing customs duty and VAT on imports from the EU and vice versa. No agreement would mean that the concept of an ‘acquisition’ of goods from the EU would be abolished; goods from the EU would be treated as imports from outside the EU and, as such, would be subject to import VAT.
Media reports of the new customs arrangements give the impression that we are approaching a cliff-edge because negotiations with the EU have not yet indicated a likely outcome for the indirect tax system and as such many believe there is the possibility that there will be no system to cope with trade when the UK’s exit arrives.
However, what is not widely reported or acknowledged is that there is already in fact a customs framework in place which had been negotiated over many years and could, we understand, be adopted at Brexit. This is the Union Custom Code (‘UCC’), which became law on 1 May 2016. Exactly what is adopted is of course subject to negotiation, however the UK could agree to remain compliant with the UCC which would be consistent with the planned upgrade, or rather replacement, for the system for controlling imports and exports (CHIEF). The new import system is called the Customs Declarations Service or ‘CDS’, which was scheduled for delivery prior to March 2019 but wil not be fully implemented until 2020. In reality, therefore, the picture is not as gloomy as public reports may illustrate.
Stepping back from the political negotiations and considering what, practically, Brexit may mean for businesses, there will inevitably be changes which need to be anticipated. It is not advisable to wait indefinitely for the details to arrive as this could happen too near to October 2019 to allow sufficient time for planning. Whilst transitional arrangements may alleviate some of the issues that immediately arise at Brexit, they are unlikely to solve all of the problems, which is why we would recommend a review of potential risks to see if contingency plans could be put in place for current supply chain models.
Some of the issues you may wish to consider include:
That span pre and post Brexit periods, so these allow for any necessary revisions including supply chains, routes, and timescales for example. Are there aspects of contracts which may be inappropriate or difficult to achieve? Is there a need to agree revisions so that these can remain valid in the transition to the new system and not give rise to breaches at Brexit?
Investigating alternative supply routes for goods destined for and from the EU
Although the UK is looking to negotiate a deal that minimises disruption, busier ports, such as in the south-east of England, could experience delays following Brexit as many fear the procedures needed to clear exports and imports will not achieve a similar result to the current free flow of EU trade. Will there be additional customs requirements or the inability of the system to cope with the increase in declarations? Should businesses test alternative routes and forwarders, building relationships that stand them in good stead at Brexit should the need arise?
For UK suppliers, is an EU establishment and EU VAT registration number needed?
In certain circumstances businesses and other organisations within the EU demand that an EU VAT number is provided and/or that a supplier has an EU establishment in order for the supplier to be part of a contract/tender, or to avoid the need for multiple registrations for VAT in EU countries. See also comments on ‘distance selling’ below.
The EU operates a ‘distance selling’ regime for businesses which sell goods from one EU country, say the UK, to private individuals and unregistered organisations in other EU member states. The regime allows sales VAT to be paid by the supplier in the country of dispatch of the goods, until the level of sales exceeds the ‘distance selling’ threshold in the country where the customer is based.
This threshold varies depending on the member state but is between €35,000 and €100,000 per annum. As and when the threshold is exceeded a UK supplier, as used in this example, is obliged to register for VAT in the other territory and to charge VAT there instead of the UK. This regime only exists within the EU and will presumably not apply to UK businesses post Brexit.
The implication for UK businesses is that unless they expect private customers to pay Duty and VAT on import into their EU country post Brexit, or unless they wish to register for VAT in every country to which goods are supplied no matter the turnover, they will need to set up a base (and EU registration) in a chosen EU country from which they can trade and benefit from the distance selling regime once more.
For EU suppliers, dealing with the UK
Post Brexit, EU businesses dealing with the UK will also need to think about their trade with the UK. They too will need to establish who will pay the Duty and VAT on import of goods into the UK. Again, unless private customers are expected to pay the taxes in order for goods to be released to them, there will need to be a VAT registration in the UK or arrangement with a UK based distributor possibly to declare the VAT and Duty at import and subsequent VAT on the supply to the customer.
Also, for B2B supplies, which entity will be responsible for the import? The self-accounting (acquisitions) mechanism for VAT on goods received in the UK from the EU will no longer apply and thus it is likely that suppliers will want to act as the importer, requiring a UK VAT registration as the UK has a nil VAT registration threshold for supplies made in the UK, irrespective of the lack of an establishment. The imposition of a VAT charge at import will result in a cash flow disadvantage in that importers, or EU businesses that have registered for VAT in the UK, will have to await the refund of the import VAT from HM Revenue & Customs (HMRC) following submission of their VAT returns.
Interestingly, the Office of Tax Simplification in the UK has just announced, in the first complete review of the VAT system to be completed in the UK since its introduction in 1973, a recommendation that HMRC should consider introducing an electronic system for dealing with import VAT certificates (that allows the import VAT to be claimed back and, we presume, more quickly). Whilst this may alleviate some of the cash flow issues the change is thought to be a few years away.
Selling ‘electronically supplied services’
Currently, the EU operates a ‘mini one stop shop’ (MOSS) regime in which a supplier accounts for VAT due in each EU country on sales of electronically supplied services to EU private customers. The MOSS system avoids the need for a supplier to register in every country to which it supplies e-services. It allows for a single MOSS VAT return filing. This may no longer be applicable for UK businesses post Brexit.
For UK businesses currently supplying e-services to EU private customers (such as automated tutorials, e-magazines/books), in order to avoid the need to register for VAT in each EU country post Brexit, they will need to identify an EU country that they can register in, in order to continue to file MOSS returns. Equally, post Brexit, there will be changes for suppliers remaining within the EU. Those supplying e-services to UK private persons will need to register for VAT in the UK as the UK will presumably no longer fall within the EU MOSS rules.
Major change to B2B rules for supplies of goods within the EU
Finally, as if Brexit was not enough, there is also a major change which has been confirmed recently which will affect the trade, initially just in goods, between EU businesses. These measures will not be applicable to the UK, as a result of Brexit. The changes were first announced by the European Commission in its 2016 VAT Action Plan.
Under the new system (due to take effect around 2022, although quick fixes will be introduced in 2019) VAT will be due by the supplier, but according to the country where the goods are destined. VAT will be charged at the buyer’s local rate, collected by the seller and then remitted to the buyer’s tax authority via the Mini One-Stop-Shop (MOSS) mechanism. In other words VAT in the EU will become a destination based system.
This will solve some of the missing trader fraud issues that exist where currently the system allows goods to circulate within the EU VAT free. There will be simplified procedures for those businesses that qualify as ‘certified taxable persons’ such as the use of the reverse charge mechanism for businesses acquiring goods. The criteria for being a ‘certified’ person are similar to those used to achieve the current customs Authorised Economic Operator (AEO) status, focussed around the compliance record, proof of solvency and controls over the VAT system. Trading without this status certainly appears to be a disadvantage.
Four ‘quick fixes’ to the EU VAT system will be introduced with effect from January 2020:
Simplifications for call-off stock arrangements
• Simplified chain transactions and which supply is linked to the intra-community transport
• Proof of transport required for goods moving between two EU countries (certified persons only)
• Clarification that a VIES system VAT number of the customer is required to achieve exemption/zero-rating on movements of goods
UK businesses may be relieved that these new rules will not apply to their transactions. They will instead have to cope with the inevitable
changes to the VAT system that will begin to arise post Brexit, especially with the recommendations announced by the Office of Tax
Simplification – such as one recommendation to review and amend the exempt, zero-rated and reduced-rated reliefs from VAT in UK law
so that they align with the government’s social, welfare and economic policies.
However, any UK business finding the need for an establishment and registration in the EU post Brexit, for reasons discussed above, will
need to understand how this new system works. Significant changes are ahead; fortunately, the Kreston Network and its indirect taxation
Special Interest Group will be on hand for advice and help with implementation.
- Published in Blog
Why you should offer cybersecurity services to your clients (and an easy way to start)
Cyber security, and the loss of important client data, is a global threat. We caught up with Doron Rozenblum, Managing Partner, Kreston EYR, to find out more about the solution he offers to protect against cyber threats, and how you, as a Kreston firm, can offer this solution to your clients.
Kreston: Before we get into details of your solution, can you touch on what risks companies open themselves up to without cybersecurity?
Doron: Absolutely. Say you receive a spam email and someone clicks the link, that simple action of clicking the link opens your entire system up to hacking.
And with client and other data wiped from your system, you risk being unable to run your company properly until your backup servers kick in – which may take up to several days.
During that time, you, can’t reach client information and your employees can’t access the system – resulting in potentially thousands in lost revenue, huge reduction in productivity, and worst of all a potential loss of trust from clients.
You may even receive a message from the hacker asking for a fee to get your data back. It’s a huge and unwanted disruption to your business.
Kreston: Many companies aren’t alerted to cyber threats until it’s too late. How do you convince companies to invest in cybersecurity before they have experienced a breach or crisis?
Doron: Unfortunately, sometimes it takes a breach to their system to trigger them to invest in cyber security. Others will hear about threats at a conference and this is their trigger. But in this day and age, cybersecurity should be top-of-mind for everyone.
In the US alone¹, over $12bn was lost in 2018 due to email fraud and in 2017, 37% of businesses in Britain experienced a cyber security threat.
With the added regulation around GDPR in Europe, companies must have a cyber security solution in place to keep client data safe, so now it’s not just an option, it’s a MUST.
Kreston: It’s clear this is a big threat – so what’s your your cybersecurity solution?
Doron: We have two key solutions in place… The first is the digital version of a security guard and security cameras. It monitors your system and alerts you to any threats without touching your data or emails. It is simply an alert tool, a first line of defence.
The second solution detects threats (like spam emails with links that, when clicked, will infiltrate your system) and alerts you on what actions to take. As a second line of defence, our security team will also guide you on how to stabilise your system if a breach happens.
Both are simple and easy solutions to deploy and you don’t need any additional systems or software upgrades – best of all, they are fully outsourced solutions.
They can be used by any company in terms of size and industry, and everyone receives the same level of outstanding service.
Kreston: What is unique about your solutions compared to others on the market?
Doron: First, they are low-cost and second, as I mentioned, you don’t need to invest in additional software upgrades.
Other solutions have a long lead time to fix issues, which increases risk. Because we have people monitoring your system 24/7, we see and address issues as they arise. When there’s a breach, we work directly with your IT team in real time to fix the problem as quickly as possible.
With most other solutions, your IT team receives multiple alerts a day, which means it’s easy to become complacent about them. We work with your system to minimise them so that you only see the important alerts. It’s very efficient.
Kreston: This isn’t just a solution for Kreston firms – it’s a service that Kreston firms can potentially sell to their own clients. So how does this fit in with the typical offering of an accountancy firm?
Doron: This is a great additional service to offer along with auditing and risk assessment services. When assessing the risk of cyber threats, this is a very obvious solution to offer them.
And because your clients trust you as an advisor, they will take recommendations from you seriously due to that trust, so this solution practically sells itself
Kreston: What does the solution costs?
Doron: The monthly fee depends on the number of machines, or end-points, being monitored. That will be unique to each client. This ranges from $15-$25/month per machine.
Kreston firms receive a revenue share, from 10% – 15%, depending on the value of each sale. So this should be something that’s discussed with every single client, first because it’s just so vital in terms of your clients’ security and building trust, and also because of the additional revenue it can provide your firm.
Kreston: So if a Kreston member does decide to sell your solution to their clients, how does that process work?
Doron: I manage the entire process between the Kreston firm and my team. To find out more, please get in touch with me and we’ll schedule a time to go over all the details!
- Published in Blog
By Kreston CEO, Liza Robbins.
Kreston members – Did you catch my announcement earlier this week?
The Kreston International office move is complete!
We are now based in the WeWork offices in central London.
In case you’re not familiar with it, hundreds of companies of every size and from every industry imaginable share facilities at WeWork. (Take a look right here.)
Everywhere you go in these very contemporary offices, there are people networking, meeting and doing business together.
The vibe is electric!
This move is the fulfilment of a promise I made when I first joined Kreston, just over a year ago.
Today I’d like to explain why I believe it is so crucial for our future….
…As well as share a lesson that every Kreston firm can learn.
You see, the decision to move wasn’t taken lightly. And we didn’t pick the location because we like the view of the London skyline… Or because we feel comfortable there personally…
And it certainly wasn’t the size of the offices! (Ours is very modest – it’s one room which just fits 4 team members.)
Rather, it was a strategic decision, designed to help Kreston on our journey to become more business-oriented, to reflect our identity as one of the most modern, forward-looking professional service networks, and to enable growth for all of us.
You see, when you want to scale your firm, where you’re based and what your office feels like is critical.
For example, if you’re trying to attract ideal clients, you have to make sure that when they walk through your doors, they instantly perceive that you are the kind of firm they want to do business with.
Are your offices run-down and old-fashioned, or beautifully maintained and modern? Is there evidence in your office that you are internationally focused – or does everything appear very parochial?
They’ll pick up on the minutiae instantly.
In our case, we want to show that Kreston is at the cutting-edge of business…
… And ensure that our staff absorb a high-energy environment and mix with typical clients of our member firms.
The buzz you feel when you walk into WeWork does exactly that. I wasn’t joking when I said that people are doing business everywhere around you…. From the breakout areas right through to the cafes on every floor.
Anyone who comes into our office will immediately feel the buzz.
But then there’s location to consider too. Does that help you grow your firm?
In our previous offices, in a quiet part of the country, we were a bit cut off.
The truth is that even our member firms only rarely visited us… In fact, I only know of one member firm that visited in over 30 years!
Since our soft opening in central London, we’ve had more visitors in the last few weeks than we had over several decades! It’s been fantastic meeting so many Kreston members who have been passing through.
What about your firm? Is it located where clients can easily access you?
And how about potential clients? Here at WeWork, there are seven floors of potential clients for our firms. A chat with a stranger over morning coffee could easily turn into new business for one of you!
Being in the heart of the financial district is another added bonus. The Bank of England and Lloyd’s are just steps away, as is the ICAEW (Institute of England and Wales) and the famous Gherkin building.
It is no surprise that all the big networks are a stone’s throw away from our new office, and two are in the same building.
Simply being associated with this area brings us gravitas and credibility.
And being close to the business community opens up endless opportunities to meet the right people, collaborate on events and grow the network.
Now, if you’re thinking, “Our office really isn’t fit-for-purpose… But we can hardly afford to move right now!”, don’t panic.
You don’t always have to relocate or spend a lot of money to make your offices more attractive to your ideal clients.
Get someone who does not work for you to take a look around your office and give you feedback. You may be surprised at their observations.
And then – if necessary – you can invest some money in sprucing up your current office, adding a lick of paint or new carpets, improving the lighting, or adding some plants and artwork to the walls.
Maybe the reception area can do with added warmth so clients feel welcome when they arrive?
Or you might consider adding some testimonials from ideal clients on the walls, to give visitors immediate confidence in your abilities?
You don’t have to be in the slickest part of town or in the fanciest office to attract the clients you want.
But you do need to think strategically about how your office impacts both your image and your potential to grow your firm.
That’s all for now….
We’ll continue working hard for you, our Kreston members, and if you’re ever in London, I’d love for you to pay us a visit.
- Published in Blog
By Kreston CEO, Liza Robbins.
How many times have you felt the pain of rejection from a potential client?
You poured hours of your time into crafting the perfect pitch. You delivered it with confidence.
Your prospects sounded enthusiastic – and you came away convinced you had won the business…
…But a few days later, they called to say they decided to go with another firm.
Most firms would thank them for the opportunity, wish them good luck, and move on to the next pitch.
But that isn’t the right move.
There is something else you should do, that could change everything….
…Something I discussed in detail during my recent trip to the Kreston conference in Latin America.
You see, we talk a lot about best practices to win new business, but we rarely go into what happens when you don’t win.
What you do at that crucial juncture can be as important as the work you put into preparing your pitch.
Take Natalia Mora Suarez, International Relations Manager at Kreston RM S.A. in Colombia.
A contact had referred her to a potential client, who eventually decided to go with a different firm – one they were more familiar with.
Now, Natalia could have accepted that “No”, chalked it up to experience, and moved on.
But she didn’t.
Instead, she decided to investigate. She contacted the prospect directly, and asked to find out more about why they had been rejected.
It gradually emerged that they had not really understood Kreston RM S.A’s capabilities.
This was an exciting opportunity for Natalia!
She was able to talk them through all the ways in which her firm could help – and she got the prospect to change their mind, and go with Kreston after all.
I really love what Natalia did – and there’s a lesson for you here too.
You don’t have to accept a ‘no’ at face value.
Always get back in touch with the prospect – and find out why they rejected you.
Did something in your pitch inadvertently turn them off? Were they worried that you had left something out? Was pricing the issue?
What was that “no” based on?
Once you understand their reasoning, you can sometimes take action to turn their decision around.
Of course, often that’s not possible (or desirable, especially if their objections are based around price).
But you should still make that call, because it’s your opportunity to gather valuable business intelligence.
You can learn so much both about your prospects and about the way you are perceived, simply by asking “why didn’t you pick us”.
Put that information to good use, and use it to win your next pitch!
And by the way, even if your prospect sticks to their initial decision, all is not lost.
Keep in touch with this prospect long-term because you never know what that connection could lead to…
A referral? A chance to pitch for a different service? A second chance, when the first firm doesn’t work out? (It happens…)
Check in with them every once in a while. Send them regular content that you know will interest them, based on the discussions you’ve had. You could even invite them for coffee or ask them to a firm event.
You may have lost one piece of work, but when you continue to build a relationship of trust, you set the stage for other opportunities to do business in the future.
As you know, even when you run a successful firm, rejection comes with the territory.
But if you think of adversity in business as an opportunity in disguise, you’ll grow even faster.
- Published in Blog
By Kreston CEO, Liza Robbins.
If you’re thinking of doing more business internationally, this probably isn’t the first region you think of.
Lots of people assume it is not very business – or investment-friendly.
Yet, this region houses many multinational companies and is keen to open up for more international business…
Santander is one of its largest banks – and is increasing its presence there¹.
Indeed, a lot of the market is relatively untapped….
….And this means a huge opportunity for your firm!
Which region am I talking about?
….It’s Latin America.
Over the past few weeks, I’ve mentioned to you the conferences I’ve attended in the US and in China.
I was also lucky enough to visit Cartagena in Colombia, for a conference with Kreston firms in this exciting region.
It was inspiring to see how keen these firms are to grow their business internationally…
…and the lengths to which they are prepared to go, to make this happen.
They were realistic about the steps they need to take, to give you confidence that you can do business with them and to bring themselves up to international standards.
We talked about everything from creating English-language marketing collateral, to ensuring their premises are fit-for-purpose for international visitors.
We even discussed the need to grow and to merge, because companies from overseas usually want to do business with organisations of a certain size.
And we shared many examples of good practice from Kreston firms in Latin America which have already travelled a long way on this journey.
It helps that Latin America is host to some of the world’s largest economies.
So the region has much more to offer than most companies realise.
And with Kreston firms already operating there, you have an existing networking with which to partner and grow your firm.
This is one of the main reasons why being a Kreston firm is a strength…
…It’s simple for you to work across borders and access local knowledge and expertise, taking your business to places like Latin America with ease.
That is why I am proud to announce a brand-new Kreston LatAm group.
If you are a Kreston firm outside of Latin America, it is there to help you connect with your counterparts in the region, understand their capabilities identify new business opportunities – and act on them.
And if you’re a Kreston firm in Latin America, this group will help you forge ties with companies from outside the region, which want to do business with you.
- Published in Blog
By Kreston CEO, Liza Robbins.
How much of your business is taken by the Big 4?
Losing out on business to them hurts, doesn’t it – especially when you have a talented team you know can compete.
Depending on which region you are in, the Big 4 might secure a large part of the business you really want…
…and this is happening on repeat in China.
I recently had the pleasure of going to China for a Kreston conference and was struck by the huge opportunity to do business there.
It got me thinking… why should Kreston firms accept so much of that business being taken by our rivals?
You probably don’t know, but I have a deep connection with China.
My father was born in Shanghai and although I was born and raised in England, there was a definite Chinese influence on my childhood…
…So much so that I studied at university in the far East and even worked there for a few years.
The China I saw 20 years ago and the China of today are two completely different countries.
Back in the late 1990s, I visited a small, sleepy fishing village called Shenzhen, around 25km from Hong Kong, with no commercial ambitions. It was possible to walk from one end to another… though there was no good reason for most people to visit.
Fast forward to the Kreston conference a few weeks ago, which was also held in Shenzhen.
It’s now being called the city of the future – and rightly so!
I was absolutely floored by the levels of innovation, and most of all, by the way Shenzhen has embraced technology like no other city I’ve ever been in.
When I walked around the city, I saw robots delivering parcels and hotels now even use robots for room service – you can’t get more futuristic than that!
What’s more, the $3 trillion¹ Shenzhen Exchange is devoted to hi-tech, with over 8,000 tech start-ups based there.
This means that there are countless opportunities for growth in this market – including for Kreston firms.
So if you have ever considered China as a growth market – it’s time to start taking action.
Others are already there.
Whilst at the Kreston conference, it was striking how many colleagues from the UK and Dubai were speaking Mandarin, and how many Chinese colleagues were speaking English.
These same colleagues from Dubai, India and the UK also talked at length about how China is investing in infrastructure back in their home countries – so the opportunities flow both ways.
All of this showed me that cultural barriers are starting to fall, and there’s a real willingness to embrace linguistic and cultural differences to make business work.
The exciting part is that we have well over 15 Kreston firms in China and the wider region, that are committed to connect with other Kreston firms internationally.
And that’s why we’re creating a Kreston China Global Business Group.
The group will help us identify firms that want to grow their business in China, as well as Chinese firms looking to do business overseas.
It will help clarify what skills and specialities are available on both sides, provide bilingual marketing collateral, identify opportunities as they arise – and most importantly, help facilitate valuable business opportunities.
Of course this isn’t an overnight process. Building real relationships across borders takes time, which is why this group exists.
If we’re going to capture some of that Chinese business currently flowing to the Big 4, the time is now!
We have the skills, passion, people and connections to put your firm on the Chinese map.
- Published in Blog
By Kreston CEO, Liza Robbins.
“We all want to grow to the level of the Big 4, but it’s difficult to achieve with organic growth and takes a long time.
“So we concluded that the best route was to merge with another firm, and develop together going forward.”
That’s how Ganesh Ramaswamy, until recently a partner at Kreston Rangamani in India, explains his firm’s decision to merge with Kreston SGCO earlier this year.
What was his experience, what challenges did both firms face, and how did their employees and clients react to the merger?
Today, I’ll share their story with you through Ganesh’s eyes.
Sure, we’ve focused on succession planning recently, but the merger didn’t happen because of a lack of a succession plan. The firms merged primarily because they each wanted to take a bigger chunk of the market.
South-India based Rangamani planned expansion to the north, so it set up offices in Mumbai and Delhi. SGCO, based in north India, wanted to expand to the south, and opened an office in Bangalore.
“Instead of being competitors,” says Ganesh, “we decided to combine our strengths and contacts. Alone, it would take us 10-15 years to reach our goals organically.”
The combined firm is stronger than its individual parts.
“Kreston SGCO is a leader in transfer pricing, and Rangamani leads in outsourcing – which was an area SGCO wanted to expand into,” he added. “So we capitalised on our respective strengths.”
But there were other considerations besides market share and growth.
One was efficiency. They could close the small offices they had opened, and achieve economies of scale by sharing resources.
With bigger teams, they were also more appealing when pitching for new business…
…And less likely to lose existing clients.
“Some of our clients moved to larger firms when they grew, because they didn’t think we were big enough to audit them,” Ganesh told me. “The merger means this issue has now gone away.”
But the merger didn’t come without challenges, mainly around cultural differences between north and south India. Ganesh, who is responsible for international business in the new entity, explained:
“In the different regions, there are different reporting systems and employees’ levels of authority are different. Each firm had much debate about this!
“In a joint meeting, we openly discussed how we’d manage differences in culture. Many mergers fail because of cultural issues, so we knew we had to tackle it early.”
To address these concerns, the firms decided on one reporting structure – that of Kreston SGCO, which was by far the larger firm.
SGCO sent staff to Rangamani’s offices, to train them in the reporting formalities, and Rangamani in turn seconded staff to north India.
This cross-training led to a deeper understanding of how each firm works, opening crucial dialogue and creating personal relationships right from the start.
No doubt, over time they will create a new, joint culture that everyone buys into.
Of course, it helped that both firms were already operating under the Kreston brand.
Not only did they have auditing standards and much else besides in common, their clients already saw them as part of the same group.
So when they merged, their clients didn’t feel the change.
As for staff, they were excited about the new opportunities to develop their careers. Ganesh was very proud to tell me that they saw no employee attrition through this process!
The combined firm, under the name Kreston SGCO, will have around 450 employees, four offices, and 17 partners, four of whom are originally from Kreston Rangamani.
So you see, a merger can be a smart decision when you want to grow your firm quickly. You can take more of the market and expand your services quickly.
- Published in Blog
By Kreston CEO, Liza Robbins.
Benjamin Franklin supposedly once said: “If you fail to plan, you plan to fail.”
But the reality is, sometimes even the best plans don’t work out as expected…
Take the topic of succession planning, which we’ve been talking about lately.
Succession planning doesn’t always guarantee a successor will be in place when you’re ready to retire.
Things can (and often do) change over time…
Junior partners may adjust their plans and leave the firm, or be forced to through unforeseen circumstances. Or maybe you had a plan for promoting younger employees to middle management, but no clear contender for the lead role.
If there is no solid successor for leadership in sight, it’s easy to start feeling uncertain about the future of your firm…
This is where a merger might be a solid option to consider.
It doesn’t surprise me that mergers and acquisitions were a key theme at the fantastic CBIZ conference I went to recently in San Antonio.
Mergers are a viable way to ‘buy in’ talent and more contenders for leadership positions.
In fact, when other firms struggle with succession, it’s your opportunity to snap them up and groom their young talent to lead your firm in the years to come!
There are other reasons to consider mergers and acquisitions, as well.
As you know, the market is changing at breakneck speed…
Many firms are moving away from focusing on tax and audit, and towards growing their advisory services.
And whether you want to or not, you have to adjust… or risk being left behind.
With the market changing so fast, it can be difficult to find talent internally to create and grow advisory services.
Often, the quickest way to do it is to buy talent in.
Since it’s easier to compete when you are larger, it’s also a good way to grow and stay competitive.
I was really excited that the 600 people from CBIZ, plus the 12 other firms at the conference, shared this understanding of how the market is evolving and how accountancy firms need to change.
It really felt like we were on the same team!
One important take away from the conference was to proactively look for firms that want to be bought or to merge.
But you need to be strategic about which firms you approach.
For example, you’d want to look for firms that are a good cultural fit… ones that fill the gaps you have in skills, verticals, location and services… and those that align with your overall growth strategy.
Also, keep in mind that you don’t have to always buy the whole firm.
You can offer to purchase specific pieces of it, which allows you to bring in the talent your firm may currently lack.
At the conference, I was really impressed to learn that CBIZ have a head hunter actively looking for firms ready to sell – how’s that for focus on market consolidation!
This isn’t just theory.
One big trend I’m seeing right now, especially in the UK and US, is firms merging and consolidating.
If you want to remain a viable contender in a fast-moving market, you need to think out-of-the-box. And that might include considering merging with, or buying, firms with the right talent and tech to support you.
Mergers can get you there far quicker than organic growth ever will.
That’s one lesson learned by two Kreston firms in India who are in the final stages of their merger.
Their decision to merge wasn’t fuelled by a lack of succession planning. Rather, they each wanted to take a bigger chunk of the market, and a merger got them there.
- Published in Blog
By Kreston CEO, Liza Robbins.
Last week I received an email from the chair of a large Kreston firm, telling me that he had stopped going to our conferences.
You would think I would be worried… or disappointed… or upset….
But I wasn’t, at all – because of his rationale:
“I loved those conferences,” he wrote to me, “and I believe I was still highly effective at them. But I deliberately stepped down so that the change in our leadership should be seen, with [our younger leaders] leading the Kreston relationships.”
In other words, he was willing to set aside his own ego, to allow the younger leadership team to develop their own mark on the Kreston relationships.
That’s true leadership!
As I wrote last week, you need a proper succession plan in place, so that your staff and clients are not left struggling when you retire.
A key part involves nurturing your younger staff, so that they are well-equipped to step into your shoes one day.
Recently, I spoke to several young Kreston leaders, including Michael O’Brien of Kreston Reeves in the UK and Mark Winiarski of CBIZ MHM in Kansas, to get their perspective on this.
I also talked to David Levi, senior managing director of CBIZ MHM in Minnesota and Andrew Griggs, senior partner at Kreston Reeves.
Here are 3 essential takeaways from our conversations.
1. Don’t expect leaders to emerge without guidance
Many firms assume that their next partners will simply appear, ready to lead…
…And then there is disappointment and frustration when the next generation is not up to the job.
But amongst the leaders I spoke to, there was widespread agreement that leaders aren’t born, they are developed.
And they need you to show them the way.
Ideally you should have a structured programme to help talented staff members gain the skills they will need to eventually take over.
Let them experience all parts of your firm, so they have an intimate understanding of how it works.
A mentorship programme, where they can watch the way you operate up close, is also a good idea so they can see good leadership modelled to them.
So what is the most important thing to teach them through these initiatives?
See point 2…..
2. Focus on teaching future leaders ‘soft skills’
When leading a firm, technical accountancy skills alone don’t cut it.
The big question is, can they lead others?
This requires what we call “soft skills” – the ability to:
• Inspire and motivate a team
• Develop long-lasting relationships with clients and other stakeholders
• Build a long-term vision for the future of the business
• Make decisive decisions
• Foster a network of peers, who can be called upon for support, advice and for business development purposes
This is what you must help them develop.
And that is exactly what the Kreston Future Leader Programme is for.
The highlight of this programme is an annual interactive workshop where future leaders receive training on the skills needed to lead a high-functioning team.
Launched in 2017, the conference includes breakout sessions and hands-on learning.
Delegates also network with future leaders from other Kreston firms, building connections that will serve them for decades to come.
Please do get in touch if you have promising young leaders who might benefit. I’d be delighted to give you more details!
3. Create a work culture which attracts young talent
Last but not least, foster an atmosphere in your office which young talent wants to be part of…
…Otherwise they will simply move to another firm.
With life expectancy increasing, a typical workplace can include people from the age of 18 or 19 right through to 70 or 75.
This is an enormous range, and each generation will have its own working style, its own attitude to productivity and its own preferences for communicating.
If you try and force everyone to conform to the same style of working (…yours?), it can create misunderstandings, division and unhappiness.
And younger staff might not be able to visualise themselves fitting in, long-term.
So be flexible in your management style, and accommodate the expectations of the younger generation (without alienating others).
This might mean encouraging flexible working, as millennials value a strong work-life balance….
Allowing a business-casual dress code…
Or adapting to tech trends like social media and video….
…In short, developing a culture that these future leaders are enthused about.
- Published in Blog
By Kreston CEO, Liza Robbins.
“I was very attached emotionally to my firm, and it was difficult to let go.”
This is an incredibly common thing retiring leaders face.
You spent decades pouring blood and sweat into a firm you’re proud of… Passing it onto someone else can be difficult.
Over the past few weeks, I’ve spoken to several former leaders of Kreston firms, as well as several partners who are helping their firms institute successful succession planning processes.
These included Andrew Griggs and Clive Stevens from Kreston Reeves (and former Kreston Chairman) in the UK, and David Levi from CBIZ in Minneapolis, Minnesota.
I asked them how their firms handled succession planning, and what they learned as they wound down their own roles.
So today I’ll share with you three key lessons I learned from these successful leaders, to make that transition easier.
Lesson 1 – Communicate early
Close relationships with your team were vital for the development of your firm.
So changing this dynamic can feel like a painful process…
…And a big change at the top can create uncertainty and instability throughout the organisation.
To seamlessly transition from one leader to the next, start succession planning early.
Talk openly with your staff about partners’ desire to retire, and be clear about what the transition period will look like.
This makes the whole process transparent and gives your team the reassurance of knowing that there is a plan in place.
For this to happen, though, you’ll need total clarity on who is retiring when.
The leaders I spoke said their firms kept track of their partners’ retirement plans.
One even kept a spreadsheet, laying out exactly where every key member of staff is in their career, so that they could plan not just the partners’ futures but the entire team’s.
Actively managing your people’s careers is key.
When younger staff members know that you are thinking about their career path, your team will likely trust you more, increasing their loyalty. And you’ll have taken the first step towards developing the next generation of leadership for your firm. (See Lesson 3.)
Lesson 2 – Clarity for clients
The next vitally important task is to handle client relationships, so none of the goodwill and trust you’ve built is disrupted when partners retire.
If the retiring partner has had close relationships with key clients, making sure they understand the transition plan can deepen the trust and confidence the client has in your firm.
Look, you’ve spent years nurturing these relationships. To ensure they continue, introduce them to the next leader early. Your clients begin to trust the new leader and know they are in good hands.
The former Kreston leaders we spoke to agreed that this transition should start around three years before retirement.
This gives the new leader and client time to create their own relationship dynamic, and gives the managing partner the chance to gradually bring their time with clients to an end.
During this transition period, the new leader needs nurturing and mentoring from the retiring partner. This helps them learn the intricacies of key client relationships and continue the legacy your firm is known for.
One leader noted that the policy in his firm was for every client to be shared amongst two partners at all times.
That way, the relationship was with the firm – not any one individual – mitigating the damage when a partner left.
Lesson 3 – Engage young talent
The final lesson is to connect with young talent in the firm, take them under your wing, and mentor them as they grow.
This time and attention not only increases their loyalty to the firm, but allows them to see how a senior or managing partner thinks and acts – exposing them to how the firm functions.
Do not expect people with talent to know, instinctively, how to manage a firm. This is a skill which must be actively taught and learned.
One leader said that they deliberately bring younger staff members onto the Board, even if that means that others have to make way.
And everyone I spoke to emphasised the need to help younger staff develop soft skills like strategic thinking, and how to manage a team – skills every leader needs, but often get forgotten as we emphasise technical accountancy skills.
Of course, if you want to nurture your young talent so they become well-rounded leaders who can eventually help run the firm, there’s a lot more to it than that.
I’ll go deeper into that in my next blog.
- Published in Blog
By Kreston CEO, Liza Robbins.
‘I should have started sooner’…
We’ve all felt that regret.
When you assess risk for your clients, you highlight the consequences of inaction, so your clients start taking action today.
Even so, too few firms actually set the time aside to purposefully consider their own future… until it’s too late.
When you look to the future of your company in 10 or 15 years, what does it look like?
How many of your existing partners are still in place? Who’s at the top?
If it is a family firm which you own, who’s going to be at the head?
Chances are that some people will be retiring or leaving – perhaps even you.
Your firm must have plans in place for new leaders to take over the reins… and this takes a lot of planning and forethought.
No matter the size of your firm, succession planning is a challenge.
From methodically identifying and training up new leaders, to transitioning client relationships, and managing both the process and emotions of change in the firm…
…it’s a big and important job.
And it’s not one that should be left to the last minute.
At least not if you plan on the transition being a success.
You can’t just announce your retirement to your colleagues and clients out of the blue.
That would be a disaster, because sadly, the troops wouldn’t automatically line up to keep things going.
It can take years to train new leadership to take over.
Not only do you have to identify the right people, they will need a lot of help preparing to stand at the head of a successful firm, no matter how much natural talent they have.
Your clients will need a lot of preparation too.
If their primary relationship is with you, they’ll need to become comfortable and trust someone else, and that can take a long time.
And if they see or feel chaos or confusion, they will simply leave and find a firm they trust more.
I’m sure you’ve heard of firms that were forced to close their doors soon after the managing partner stepped down, because client relationships broke down and no one capable had been groomed to take over.
I’ve certainly seen firms that struggled badly, having to close down departments and slim down their services, because their senior partners were winding down, and they just hadn’t trained up staff to take their place.
If you’ve put your heart and soul into building up your firm, it can be devastating to watch it fall apart like that.
Sadly, it happens all the time. Usually for one of two reasons.
Firms don’t understand how to put a solid succession plan in place….
…or, they simply don’t make it a priority.
For your firm to continue growing, evolving and existing, a clear succession plan must be part of your overall strategy, starting today, if it isn’t already.
One of the biggest costs, when you don’t do this, is that it makes it very difficult for you to retire.
A solid plan allows you to mark a realistic leaving date in the calendar and methodically start the handover process.
My next series of emails will show you how to manage your succession plan professionally.
You’ll know what pitfalls to watch out for, and how to make the transition from one leader to another a smooth one…
… so that your succession plan isn’t an accident or last minute panic move, but a deliberate strategy that ensures the future success of your firm.
Watch out for those emails.
But before I go I’d love to know:
Do you have a succession plan in place? If so, how well does it work?
If not, what are your challenges with succession planning?
Hit ‘reply’ and let me know.
- Published in Blog
By Kreston CEO, Liza Robbins.
When all your competitors claim that they offer top-quality audits and the best-quality advice….
…How can you use “quality” to differentiate your firm, and to win more business?
Is it even possible?
The answer I want to offer you today is slightly counter-intuitive.
In order to demonstrate quality, the best approach is not to talk to your prospects at length about your methodology, how you work, and what your deliverables are.
The truth is that even though we know that a robust process is key, the client usually can’t tell whether your process is really good or not.
They just don’t know auditing well enough – Why would they? They’re not auditors!
And technical information about auditing, as well as long lists of deliverables, are often deeply boring to them (harsh but true).
It’s important to us… but it’s not really what they care about.
So how do we show we deliver quality?
By focusing on the things that matter to them.
And that means, showing them how your services will deliver deep business insight that will really make a difference to their organisation.
That, to them, is the real meaning of “quality” – not the way that we work, but the long-term impact on their business, after we’ve gone.
To do this, you need to show that you are intimately familiar with the local and international environment in which they operate.
What’s going on in their industry? Who are their competitors? What pressures are they under, what challenges?
Clients will feel confidence in you and in your ability to deliver good work, when they feel that you really understand them…
…because that means you won’t just tick boxes, but deliver genuinely helpful advice that they need in order to grow.
And you must continually emphasise the value that you will bring to them.
Think about the audit (or your other services) from their point of view.
How will it help them make better decisions in the future? How will it help them operate more efficiently, become more profitable, lessen their risk?
That should form the core of your proposal and your discussion with them….
Just like, when you buy a sofa, you don’t really care how it was made – you want to know, will it look fantastic in my living room and be comfortable to sit on?
And just like, when you go to a real-estate agent, you don’t care too much about how they are going to sell your house. What you really want to know is: “What kind of price can you achieve for me, so I can make the maximum profit?”
Yes, it takes a mindset shift – from “what we do” to “the lasting, deep impact you will feel on your business.”
But this is what your prospects really want to know.
And this is what will differentiate you, and convince prospects that you truly deliver better quality than your competitors.
- Published in Blog
By Kreston CEO, Liza Robbins.
“We provide high-quality accounting and taxation services.”
“Our mission is to provide top-quality financial advice.”
“High-quality accounting without a high price tag.”
These aren’t made-up quotes. They come directly off the first websites I visited, when I googled accountants in my area.
And you’d probably get similar results in yours.
Sometimes it seems like every accountancy firm on the planet boasts about providing the very highest quality of services.
It makes sense, doesn’t it?
Your clients all want to buy quality. Certainly, no firm wants to be known for providing low-quality services!
The problem is that when everyone talks about the quality of their audits or tax advice, it becomes nothing more than a cliché.
Instead of lifting you above the competition, it makes you sound just like them.
The truth is that if you belong to a good network or are an established firm, you are assumed to deliver quality.
And in many countries, there is a strong regulatory environment, establishing an expected level of quality.
So unfortunately, “quality” is just not a good differentiator in the market – even though, in reality, of course there can be vast differences between the quality of work delivered by firms.
This leaves us in a dilemma.
Quality is a pillar in the Kreston International strategy. Clients need to know that when they come to us, they should have high expectations – which will be fulfilled.
That’s why this month, we launched the Kreston Quality Bulletin, which provides information on the management of quality within Kreston and looks at up coming developments in this key area for all practices. Please check it out!
But how can we demonstrate quality, when it is something everyone claims to have?
Can quality still be used to differentiate ourselves and win more business – or are there better claims to make?
And if we do decide to actively promote quality audit, what should that look like to clients and to potential clients?
These are important questions for us to consider, as we are all seeking to generate more business.
And I would like to suggest two answers.
The first is to draw your attention to a competitive advantage you have as a Kreston member, which not enough Kreston firms are aware of.
Kreston is a member of the Forum of Firms, an association of international networks of firms that perform transnational audits.
Membership of Forum of Firms is extremely prestigious and exclusive. To be accepted, we have to meet stringent standards of auditing practices.
And in many jurisdictions, this is a marker for quality, giving access to banks and other providers of work such as NGOs and the World Bank.
So not only does your Forum of Firms membership give external evidence that your firm is committed (based verification that you) to deliver quality audits…..
….It can actively be used to gain desirable work that many – if not most – of your competitors will not have access to.
It is an immediate, powerful differentiator – your secret weapon to winning more business!
It should be something you talk about often, include on your website and your proposals, and leverage to gain access to bigger and better clients.
You can learn more about Forum of Firms here.
There is a second way you can demonstrate the quality of your audits to leap above the competition. I’ll tell you about that next week, so please do watch out for that email.
But in the meanwhile, as we are all about sharing knowledge and best practice, I’d welcome your own thoughts on this topic.
How do you demonstrate quality to your prospects? How do you use the quality of your work, to win new clients?
I’d love to hear from you, so please do get in touch and let me know.
- Published in Blog
By Kreston CEO, Liza Robbins.
Recently, a Kreston firm in Asia was looking to help a business they work with undertake a debt refinancing of $60 million.
The company is long-established, profitable and cash-positive, but as a family business had taken various loans from local banks over a period of time. They saw this refinancing as a way of consolidating their debt with a single larger bank, at a lower overall financing cost.
They approached another Kreston firm – this time in the UK – which they thought might be able to identify potential debt providers.
“It’s a great opportunity to support our Kreston colleagues by helping them raise money for their client, whilst showing our own clients and contacts that we are capable of delivering such opportunities, and potentially get an introduction fee as well,” says Jack Clipsham of Kreston Reeves, the UK firm.
“If it works out, everyone wins.”
It’s a fantastic example of the boost to business you can experience, when you join a new venture we’ve just launched here at Kreston.
I’m talking about our brand-new Corporate Finance special interest group.
The idea originated when Jack joined Kreston Reeves as corporate finance partner last year. He was used to working closely with corporate partners from around the globe.
But while the Kreston firms did occasionally refer buy and sell mandates and other corporate finance transactions to each other, “it wasn’t as proactive as it could be, and it was hard to identify the corporate finance specialists in the network,” he told me.
“For cross-border corporate finance, we all need to be talking to each other regularly – no matter where we are geographically – sharing ideas and material, and proactively trying to make deals happen.”
After floating the idea with Kreston International, Jack developed a discussion paper, showing how a more formal group could help Kreston’s corporate finance specialists get more opportunities and to manage these through to successfully completed transactions.
We announced the new group at our recent EMEA conference, where we asked all the corporate finance people to stand up – it was quite the sight!
There was immediate enthusiasm – in fact the group had their first meeting, then and there.
And before Cesare Suglia of Kreston GV Italy had even returned home, he had already started developing an international portal, which all Kreston corporate finance specialists will be able to use to communicate regularly and exchange opportunities.
While it is still in development, there will be a beta testing version ready shortly.
Meanwhile, both the UK and USA are developing local corporate finance sub-SIGs. The idea is that when there is good organisation locally, it will be easier to communicate opportunities internationally as well.
It’s already making a difference.
For example, one firm, which was pitching for two sales mandates worth around $200,000, asked whether anyone in the Kreston network had relevant experience. Several did, so the firm included this in their pitch document.
“They won those mandates,” Jack says. “It may not have been because of the additional input, but it certainly may have helped! That is exactly what we should be doing more of.”
In addition to sharing deal opportunities, the SIG is already sharing knowledge and experience.
Jack himself recently wanted to review a particular clause within engagement letters. He emailed the Kreston UK corporate finance SIG to find out how they handled this clause, and received immediate insight and advice.
“We are already sharing information like press releases, research and precedent documents. Why re-invent the wheel if you don’t have to?,” he asks.
So what are the lessons here for all Kreston members?
First, if you – or someone else in your firm – is a corporate finance specialist, get in touch with Jack Clipsham today (don’t wait!).
There is a brilliant new special interest group coming together, which can help drive new business for your firm and make your life easier in many ways. It’s what belonging to an international network like Kreston is all about – so please do take advantage!
Second, the corporate finance SIG shows just how much can happen when Kreston members take the initiative and leverage the network.
So if there is no SIG in your particular area of expertise, don’t let that hold you back – talk to us about creating one!
There are so many opportunities for you to help facilitate cooperation and referrals internationally, and ultimately generate more business for yourself – and for everyone.
Just get in touch with me if you have an idea that is worth exploring. It’s what we’re here for.
- Published in Blog
By Kreston CEO, Liza Robbins.
What’s the connection between muesli…. taxi cabs…. And Kreston?
In theory, nothing!
But in 2014, Kellogg’s cereal launched a highly innovative marketing campaign in India, in partnership with Meru, a top radio cab service.
In select cities, it provided cabs a Muesli breakfast pack, a deep bowl that is convenient to eat from on-the-go, a 100ml milk carton, sugar, spoon and a tissue.
Passengers who ordered a Meru cab between 5am and 9am were surprised with a “breakfast kit”.
The campaign was win-win.
Meru not only differentiated itself in a crowded market, but it surprised and delighted its passengers, providing them with a value-added service.
Kellogg’s had been struggling in India, where people were not accustomed to eat cold-milk cereals for breakfast.
This partnership allowed them to reach people it would not normally reach, and also surprise and delight potential customers.
What this example shows is the power of partnerships, between companies from very different industries.
You see, Kellogg’s and Meru were in no way competitors. But their customers were the same people.
Cooperation between them was a no-brainer.
So what about accountancy firms?
Given that we face an increasingly competitive market, and that audit is slowing down almost across the board, we need to find business in new places.
A few weeks ago, I encouraged you to find ways to cooperate with other Kreston firms. We can refer each other work so that everyone benefits.
But there are firms outside our industry, as well, which might make natural partners.
For example, law firms may serve a very similar, SME clientele to you. And many of their SME clients might need your services – and vice versa.
It’s the same story with real estate agencies…. And so many others. Laurent Le Pajolec from Exco A2A Polska, one of Kreston’s Polish firms, for example, has partnered with INSOL, the insolvency practitioners.
We need to follow his lead and broaden our outlook, to look outside our “accountancy bubble” for strategic alliances, so we can gain access to a wider potential client base.
Now, I know what you might be thinking.
You are probably worrying that if you develop this kind of relationship with an insolvency or law network, some of them might compete with you.
But here’s the truth.
Whether or not you affiliate with them, they are already out there, talking to your clients and competing with you.
All you can do it focus on being the best – and make sure you are developing win-win relationships.
Is this something you have tried? If so, I’d love to hear about your experiences. Please do let me know.
And if you are a Kreston firm that wants help developing this kind of approach, please do let me know as well – and let’s talk about how we can facilitate it for you.
- Published in Blog
By Kreston CEO, Liza Robbins.
Over the past few weeks, we’ve been talking about what accountancy firms have to do to thrive in an increasingly competitive market.
Kreston Menon, in the United Arab Emirates, has done more than thrive.
In the space of just 25 years, it has grown from two people in a small office, to more than 250 staff members across 9 offices.
It is the fifth largest accounting firm in the UAE.
And it is no exaggeration to say that Kreston Menon is a household name.
For the last six years running, it has been granted the status of Superbrand – an official designation by an independent authority in London, which recognises outstanding brands.
This success is no accident. It is the result of a deliberate growth strategy.
Since its beginning, Kreston Menon has carefully positioned itself as a partner to the UAE business community and to wider society.
“Every business has prime commercial considerations, but we want to make a difference to society and to our country,” Sudhir Kumar, Kreston Menon’s head of Corporate Communications, told me.
Kreston Menon shows social responsibility, for example suppporting the Dubai Foundation for Women and Children, which battles domestic violence, child abuse and human trafficking. It sponsors promising athletes, contributes financial to people who are affected by natural disasters and supports schools for special needs children.
So it was only natural that when the government launched an initative to turn Dubai into a disability-friendly city, it reached out to Kreston Menon to help raise awareness. The company filled its corporate calendar with pictures of competitors in the Paralympics, and distributed 50,000 copies.
Not only does this kind of partnership give Kreston Menon local credibility, but when the calendar reaches people, “they can see that we are not just about commerial activity, and our name enters hearts and minds,” says Sudhir.
At the same time, Kreston Menon networks hard with leaders in business, government and the social arena.
“Over a period of time we’ve got to know all the key businesspeople,” says Sudhir. “We work with all the embassies, consulates, business councils and chambers of commerce. We interact with them and do work for them – it might even be pro bono at first, but this later transforms into a commercial relationship.
“We go out of our way to be helpful!”
To cement these relationships, and help anchor Kreston Menon as a leading voice, it sends out a print newsletter every quarter to 50,000 contacts, in English and in Arabic. As well as business prospects, this includes decision-makers and influencers.
“We do not talk about ourselves in the newsletter,” says Sudhir.“It is about sharing our knowledge with the market. We analyse any subject that might be of interest to local business.”
The result of all this activity is that Kreston Menon has become an influencer itself – leading to explosive growth.
So what can other Kreston firms learn?
Clearly, Kreston Menon’s strategy of networking with local embassies and consulates is not transferrable to every firm.
But you can still make sure that you are positioned uniquely, compared to your competitors.
“It’s a crowded market,” says Sudhir. “How to you stand out will depend on the variables in your locale, but you must make sure you come across as different.”
You can still find the enablers in your own market, build relationships with them and work with them.
And you can still communicate with them instensely, and strive to be helpful to them.
“Have dialoge with them on topics that are key to them, not to you, so you are in tune with them,” adds Sudhir. “And show an impact and empathy to society around you, and to your local business community – wherever you are.”
Could this strategy work for you? Is this something you have tried?
Get in touch and let me know!
- Published in Blog
By Kreston CEO, Liza Robbins.
For the past three years, the average annual growth rate of Kreston GCG in the Ukraine has been around 50%.
In 2018, 48% of sales came from brand-new clients.
They are now the 7th largest audit firm in their country.
These are astonishing figures, compared to many accountancy firms which struggle to grow at all. And it is even more astonishing, considering that Kreston GCG is less than 20 years’ old.
So how did they do it?
The secret to their success is one that every Kreston firm can emulate.
In my last email, I argued that in today’s hyper-competitive market, you have to do more than simply shift towards advisory services if you want to thrive.
Kreston GCG has understood another fundamental point.
Being technically outstanding is not enough to sell your services, particularly in a market where many services are commoditised. Most of your competitors are probably very good at what they do, too.
So you cannot expect potential clients to choose you, “just” because of excellence.
Nor can you rely on word-of-mouth if you want to see significant growth. Relying on references is out of your control, and difficult to scale.
If you are serious about growing, you need to be much more business focused, and create a reliable, repeatable system to bring in new clients and new work.
That is exactly what Kreston GCG did, back in 2014.
“We had great auditors on our team, but they didn’t have the skills, experience or desire to sell. They were also very busy with technical work,” Managing Partner Sergey Atamas told me recently. “So we decided to set up a separate sales department, just like other B2B companies.”
Nowadays there are 14 members of the department – approximately 10% of Kreston GCG’s staff – including account managers, business development managers and development partners.
They use 12 different channels to nurture more than 13,000 leads and prospects in their CRM system. A call centre handles new outgoing calls, repeat sales and cross-sales – this is their most successful channel. Sales are also constantly increasing through social media, PR, SEO, Adwords and Inbound channels.
The process is highly structured.
Each new name is led through a well-though-out, cross-channel campaign to warm them up. Only once they are familiar with Kreston GCG do they receive a phone call.
The process is carefully tracked and controlled. And with time, the results become predictable.
“If we make 100 calls, we know exactly how many commercial proposals will result,” says Sergey. “By looking at how many leads we attract today, we can predict our future cash flow, allowing us to plan far ahead.”
Similarly, the sales team each have personal KPIs, including goals for the number of proposals they need to generate.
It’s all part of professionalising your sales and marketing process – which is crucial if you want to evolve into a serious player.
“What we’ve learned is that only a sales person can guarantee the kind of growth rates we see every year – not executive partners,” says Sergey. “It takes a machine.”
Is this an approach you have tried? What works best for your firm?
I’m eager to share more best practice from all our firms, so please do hit ‘reply’ and let me know.
And if you’d like to find out more about how Sergey and his team manage their sales process, please do get in touch as well. We are all here to support each other, and I know they would be delighted to speak to you.
PS. I have another example of a Kreston firm which has developed a unique, and extremely successful, approach to its own marketing. I’ll tell you more about that next week – watch this space!
- Published in Blog
By Kreston CEO, Liza Robbins.
Petra Uylen’s client had a problem.
They needed a tax advisor, an accountant and a lawyer in Brussels the very next day. Could she arrange it?
Petra, of Kreston Grip in the Netherlands, knew that the following day was a national holiday in Belgium. Everything was going to be closed.
The client was asking the impossible.
Yet, 24 hours later, they were meeting the professionals they needed in an office in Brussels.
For Petra, it wasn’t even too difficult to arrange. All she had to do was pick up the phone to her contact at the Kreston member firm in Belgium. As chair of Kreston’s International Tax group, she knew them well.
“My clients were surprised and delighted it was possible,” she says, especially as, driving through Belgium that morning, they had seen that no other business was open.
“They were also very happy with the quality of the people.”
There is a key lesson here for accounting firms that want to grow.
It is no secret that we operate in a very competitive market, one where it is increasingly difficult to differentiate ourselves and operate profitably.
The traditional core services we offer – audit and accounting – are becoming commoditised, as technological innovation changes the way our business is conducted.
It is difficult to stand out, and to show why your high-quality independent audit is any more valuable than your competitors’.
You probably come across potential clients talking about wanting quality, but then buying on price, all the time. Others, who have been with you for several years, may start to expect a discount.
But these are relatively low-margin services to begin with. There is a limit to how much pressure prices can come under!
To thrive and to grow, then, we need to find new ways of adding value for our clients, so we can stand out and charge more. And we need to find new avenues for growth, so we can move away from compliance services.
For many firms, the answer has been a move towards advisory. But when everyone is doing this, it is not enough.
Firms like Petra’s have two advantages, which we can all learn from.
Generalist accountancy firms are extremely common. But Petra has developed a specialism in international tax, which helps her stand out.
Clients who need those specific services have a good reason to pick Kreston Grip over their competition.
They know that there are people in Kreston Grip with specialist knowledge that others do not have, which they need and which they are willing to pay for.
When you stay a generalist, you might believe you can service a wider group of clients. But actually it is limiting, because you do not hold special appeal to anyone.
The other advantage is that Petra sees Kreston Grip in the Netherlands as part of a global team.
For her, the tax specialists in the other member firms are not part a different firm. They are an extension of her own office.
You see, sometimes specialist teams are hard to grow in-house. You may not have enough people or enough knowledge, especially when starting out.
But that is the advantage of belonging to Kreston. You have colleagues with specialist knowledge all over the world, with whom you can collaborate and share information, experience and tools.
Not only does this allow you to quickly reposition your firm, it is a far more convincing proposition for your clients, who have access to the best expertise available, wherever it is in the world.
Kreston Grip shouts about their international presence to their clients, displaying all the Kreston offices on a big map on their wall and mentioning it frequently, in their welcome pack to new clients and other communications. It is an important selling point.
Here at Kreston, we have experts who work together in many specialist areas, from international tax to sales and marketing, cybersecurity, corporate finance, transfer pricing and more.
If you would like to get involved in any of these areas, hit ‘reply’ to talk to me about how you can take advantage of this valuable opportunity.
And if you are already involved, I encourage you to make full use of all your network has to offer! Send a partner to our conferences to meet your peers and build up your international contacts.
As Petra’s story shows, you never know when they might save the day….
- Published in Blog
By Kreston CEO, Liza Robbins.
Since I became CEO last year, I have been visiting Kreston firms across the world.
No matter where I go – from India and Italy to Indonesia, the United Arab Emirates and Poland – there are some concerns I hear from our members again and again:
• How can we differentiate our firm in an increasingly crowded and competitive market?
• How do we build our profile, even if we have a limited marketing budget?
• How do we successfully transition our firm to advisory services?
• How do we recruit the best staff given the intense competition for talent – and how do we retain them?
• How do we demonstrate the quality of our work to clients, and use it to give us a competitive advantage?
…and that’s just the tip of the iceberg.
So from now on, I’m going to answer the most pressing questions I hear in a regular newsletter for our Kreston members.
I know they will be of value to you, because I intend to share all the best practice and best ideas I learn directly from you – our members.
You are our key strength. There are many associations and networks out there, but we are selective about who joins Kreston, and going to become even more so in the coming months.
And we need to come together to support each other, so we can all become more dynamic, more innovative, and grow together.
In today’s fast-changing environment, we have to compete for business and become a lot more focused on business development. There is no choice.
But as the 12th largest network, we are ambitious.
And together, we can succeed. Our leadership team is relatively new, full of energy, and we intend to support you in any way we can. All we need you, our members to do, is to vote “yes!” and to become full partners on this journey.
That is what these pieces are about.
They will be focused on business development and other business-critical issues that will help you compete both locally and globally.
Occasionally, I will share news and case studies from other Kreston firms, as well as resources like eBooks, videos and webinars.
that sounds good to you, I would be delighted to have you as a reader.
To subscribe, please drop me a line to let me know that you are a Kreston member who would like to receive my emails.
And because this is a dialogue, not a monologue, I’d also love to hear back from you.
So, if you have any questions you think I should address in a future email – or if there is something particularly exciting happening at your firm, which you think should be shared more widely amongst members – please get in touch, and let me know.
I read all my emails and will get back to you personally.
- Published in Blog
Kreston member Duncan & Toplis is now an accredited centre for the Institute of Leadership & Management (ILM) and will now be offering leadership and management training as an accredited ILM centre.
ILM is the leading provider of management and leadership coaching and qualifications in the UK.
Becoming an ILM accredited centre bolsters Duncan & Toplis’ in-house management development programme, enabling the company to train its team members to ILM qualification level and offer qualification training to external businesses and clients.
Duncan & Toplis HR Director, Heidi Thompson, programme lead:
“As an employer of more than 400 people, Duncan & Toplis is committed to providing its managers with a strong foundation of leadership and management skills.
“In addition to training our own managers and leaders we are now able to offer ILM qualifications to clients with the level of quality and experience people can expect from Duncan & Toplis.
“We’re passionate about supporting the wider community and business environment so we’re excited to be able to offer these qualifications to our clients across the region. ILM courses are of the highest standard and candidates will be trained by senior members of our HR team who all have a wealth of expertise in management and leadership training.”
Every year, ILM qualifies 70,000 leaders and managers, helping them develop the critical skills to succeed, and make a real difference to the present and future of workplaces in the UK and around the world.
Duncan & Toplis will be running ILM qualifications at Level 3 and Level 5. Level 3 is aimed at line managers and supervisors with no formal training and for those looking to take their first step into management. Level 5 is more suitable for middle managers, senior managers with no formal training or people moving into that level. All courses are completed over 3 to 4 days and can be held as either a public or in-house course.
The courses provide real-life experience and an opportunity for discussion and debate which gives learners space for reflection and significant management development. Duncan & Toplis aims to make training enjoyable, with a relaxed and fun atmosphere that encourages learners to see value whilst having a positive experience. Learners can expect to see immediate and long-lasting benefits through the practical and work-based approach, giving further confidence to employers.
For more information about ILM training at Duncan & Toplis, please visit www.duntop.co.uk/ilm
- Published in Blog
Irish accountancy firm BFCD recently moved from its existing accountancy association to join Kreston International. We spoke to partners Margaret Deehan and Luke Prendergast about why they made their decision, the relationship they want to develop with other Kreston members, the Irish economy and the changes they are witnessing in the accountancy profession.
KRESTON: Tell us a little about your practice.
MD: We are a 30-year-old, Dublin-based firm. We have grown to a staff of 22, led by three partners – Luke, who specialises in tax; and Margaret and Dara Ó Gaora, who are general practitioners.
Our client base is broad, but we specialise in owner-managed SMEs. We are proud that many of our clients have been with us for many years and even several generations.
We have a lot of clients in construction and property development, pharma, hospitality, manufacturing, retail & distribution, as well as not-for-profits, but cater to other industries as well.
Our services include audit and assurance, taxation advice, outsourced book-keeping and payroll and corporate finance.
KRESTON: Why did you join Kreston?
LP: We were members of another association but there was an opportunity to join Kreston and we decided it was too good to give up, so we switched.
Kreston has a very good global network which is very important from an Irish perspective.
When our clients do business overseas, we want to be able to put them in touch with our affiliate offices in the EU or further afield. I am looking forward to meeting our counterparts at Kreston’s conferences so we can make referrals to people we know and trust.
And the reverse is true as well. Our economy is very open and attracts a lot of international trade. There is a lot of inward investment that requires accountancy and taxation services.
If our counterparts elsewhere have clients investing in Ireland, you can pick up the phone to us. We can provide a turnkey service and have already done so many times for companies from across the US and Europe.
KRESTON: You mentioned that you are particularly proud of your long-term relationships with clients. What is your secret to maintaining your client base?
MD: We are very responsive to our clients. They pick up the phone to us to talk about any financial decision and we are always talking to them about their wider financial life. They know that if they ring us they will get a fast response.
I have regular meetings with our staff to embed our core values (partnership, integrity, commitment and responsiveness) and to see what else we can do to better the relationship with our clients.
The culture in our firm is that it’s not just the partners developing relationships with the clients, but all our staff. They are actively encouraged to build those relationships.
Staff are also brought to client meetings to learn and they are involved in decisions. We are a training firm, and teaching soft skills is as important as teaching them technical skills. And that continues as they advance in our firm.
KRESTON: What do you see as the biggest challenge for firms like yours, in today’s marketplace?
LP: There is huge consolidation in the accountancy market. The Big 4 are increasing their market share and there is consolidation in the middle tier, below them – many are being taken over by the Big 4 or being forced to merge.
We want to stay independent, so to do that we have to be at the top of our game – always growing, but in an expedient way. Joining Kreston gives us an edge.
There is also the challenge of recruiting the best talent. We have full employment so there is a lot of competition for staff, and we need to look attractive to potential new employees. Part of it is culture. We try to give our staff a positive work-life balance and there is a very cordial atmosphere in the office. We offer a lot of benefits like free gym membership and treat our staff with respect and trust. We also provide support in terms of their professional education.
KRESTON: Where do you see your firm in the next 2-3 years?
MD: We are going to continue growing our business. Accountancy is changing, not only because of the shifts in the market I just described but also the challenges and opportunities that technology brings.
I expect that there will always be a place for accountants, but we will be doing a lot more advisory work than traditional work. We are already experiencing a shift in that direction. Our service lines are still broken down traditionally – audit / tax and so on – but senior management is doing more advisory than ever before.
To find out more about BFCD, visit https://www.bfcd.ie Or attend Kreston’s conference in Warsaw in May, where Margaret, Luke and Dara will run a session introducing themselves and their services.
- Published in Blog
Kreston Iberaudit has updated its Spanish regional fiscal guides for 2019. You can access all the guides here:
All guides can be downloaded for free. For further information you can contact Kreston Iberaudit directly here.
- Published in Blog
By Elena Bargados Varela, Tax Manager at Kreston Iberaudit S.L.
Due to the recent surge in the number of software platforms dedicated to the provision of intermediary services in tourist rentals conducted by individual entities, in addition to the new tax requirements these intermediary companies need to meet, we thought it would be appropriate to provide a summary of the tax issues applicable to this type of rental, with a special mention of Value Added Tax.
This type of operation was not particularly common not so long ago, and almost all such activity was conducted by hotel establishments. However, the appearance of this type of platform has enabled many people to rent homes for holiday purposes. This has resulted in these operations becoming one of the priorities of the fraud control plans executed by the Tax Authorities.
We will now provide a summary of the different circumstances involved in the renting of tourist or holiday homes and the applicable VAT rate in each of these cases:
A) If the owner rents the home and undertakes to provide the tenant with hotel-type services during their stay, the rental will be subject to VAT at a rate of 10%. This means that the owner will need to issue the corresponding invoice and submit quarterly tax declarations.
These services are, mainly, the following:
Reception and permanent and continuous care for the client in an area designed for the purpose.
Cleaning of the property and change of bed and bathroom linen on a regular basis (at least once a week).
Food and catering services.
B) If the owner rents the property without any commitment to provide additional services to the guest during their stay, the rental will be subject to but exempt from VAT. Consequently, the owner does not need to issue an invoice or submit quarterly tax declarations in connection with this tax.
However, the owner may provide certain additional services during the stay and between one rental period and another, which will not affect the exemption of the VAT on the rent, including:
Services involving the change of bed and bathroom linen or cleaning services provided immediately before and after the period rented by each guest.
Maintenance of the pool and garden.
Payment of utilities by the owner.
Services involving the cleaning of the common areas of the building, as well as the complex in which it is located.
The delivery and collection of the keys on the arrival and departure of the guest and a 24/7 telephone customer service.
Technical support and maintenance services involving the repair of plumbing or electrical installations, windows, blinds, locks and household appliances.
The equipment provided in the home and amenities required for the stay (sheets, towels, kitchenware, television, Internet, swimming pool and air conditioning).
C) If the owner rents the property directly to a company that, in turn, rents it to different tenants, the operation will be subject to VAT at the rate of 21%. As such, the lessor will need to issue the corresponding invoice and submit quarterly tax declarations for VAT.
D) If, in addition to renting the property, the lessor provides services such guided tours, babysitting and transfers to railways stations or airports, these services will be regarded as additional services and will be subject to VAT at the rate applicable to each case, regardless of whether or not the rental is exempt from VAT in accordance with the terms specified in the previous items.
Moreover, we need to analyse what happens with the VAT incurred by the lessor in relation to the invoices received for the different goods and services acquired in relation to the properties rented, such as supplies, cleaning services and professional services involving the management of the intermediation between the lessor and the lessee.
The VAT incurred in these operations can only be deducted in cases where the rental in question is subject to VAT and this deduction can be included in the quarterly declarations submitted. On the other hand, if the event the rental is not subject to VAT, the amounts incurred will not be deductible.
With regard to Personal Income Tax we should point out that income obtained from renting homes on a temporary basis where the property is not the tenant´s habitual home does not enjoy the 60% reduction applicable to long-term rents.
As can be seen, the tax requirements in relation to the rental can vary considerably in accordance with a number of factors and, as such, we need to take all these aspects into consideration at the time of planning to commence an activity of this nature.
Furthermore, with the recent creation of form 179, which individuals and entities providing intermediary services between owners and tenants of holiday homes (Airbnb, Booking, Windu, Homeaway) are required to submit on a quarterly basis, specifying the owner of the home, the status of the property, the number of days the home has been used for holiday purposes and the amount received by the owner, the tax controls over these operations have increased considerably.
- Published in Blog
From 1 April most VAT registered businesses with turnover above £85,000 will have to file VAT returns through new Making Tax Digital software, yet research conducted by Kreston Reeves suggests that not only are business unprepared many have not heard of the Making Tax Digital programme.
Kreston Reeves surveyed 530 privately-owned businesses and reported, at the end of 2018, preparedness and understanding of the government’s Making Tax Digital programme.
Just 65% of businesses surveyed said they are aware of the Making Tax Digital deadline. 15% of businesses said they had heard of Making Tax Digital but were not aware of the 1 April deadline and, more worryingly, 19% had not heard of the changes at all.
Making Tax Digital is a flagship programme for the government as it seeks to make it easier for businesses and individuals to manage their tax affairs. The 1 April deadline for VAT returns marks the first milestone in the Making Tax Digital roll-out.
Emma Chesson, Head of Online Services at Kreston Reeves said: “Making Tax Digital will require VAT returns to be filed by compliant software, such as Quickbooks or Xero, yet 47% of the businesses we surveyed do not use or do not know if they use compliant software. Business are, however confident, with 73% saying they will be ready by 1 April deadline.”
Businesses were also asked whether their accountant or finance team were ready for the Making Tax Digital deadline? Just 57% of businesses said their finance team or accountant is ready. 14% know that their finance team is not ready with 29% saying they just don’t know.
Emma says: “The government and HMRC will have its hands particularly full at the end of March with the UK’s departure from the EU and it had been rumoured that Making Tax Digital could be delayed.
“But HMRC confirmed that it will continue with the 1 April albeit with a soft landing. That is not, however, an excuse for failing to prepare or for the late filing of VAT returns.”
Making Tax Digital Key Facts
• MTD is applicable from the first VAT period starting on or after 1 April 2019;
• These businesses will remain in the MTD regime even if their turnover subsequently falls below the VAT threshold;
• If you are under the threshold you can opt in to MTD voluntarily, although once you are in you cannot come out of the regime unless you deregister for VAT;
• For those under the threshold that do not opt in to MTD they can continue to file VAT returns through the HMRC portal;
• Manual record keeping is not compliant;
• If you are near the threshold you need to keep an eye on your turnover, if you trip the limit you will fall into the regime;
• The VAT return itself is not changing, the frequency of submission and payment dates will remain the same;
• Eligibility criteria for special VAT schemes will not change; and
• The same concessions that are currently available will remain, although you must apply for any exemption from HMRC for example on grounds of religion, disability, age or remoteness of location.
- Published in Blog
Author: Sarjit Singh, Executive Chairman at Kreston member firm, Ardent Associates LLP.
The future of work is not just about learning a new skill or activating technology, it is about learning to learn and the ability to create purpose and meaning in what we do.
Every generation expresses themselves differently. But the same values define us. People do business with people they know, like and trust.
Relationships make us what we are. So, our professional values of trust, responsiveness, quality, integrity and collaboration underpin everything we do.
We are living in an age of change, which is unprecedented in scale and impact. We see changes in how business is being done, how old models are being upended (think artificial intelligence, blockchain, robo-advisory) and how technology is going to revolutionise pretty much everything.
How is this going to play out? How is the professional accountant going to remain relevant in this changing world? How are we going to secure our future in the face of imminent change? These are questions that should preoccupy every professional accountant today!
With no crystal ball to foretell the future, we must believe that the narrative for the future of the accounting profession is one we can determine and shape.
Meeting the Challenge
The good news is that there is plenty of opportunities for growth. The real question is how an accounting professional or business can access these opportunities to do better.
We have several things going for us. We are where the growth is. We are right smack in the middle of the biggest upcoming demand for professional services. Asia is the world’s fastest-growing economy and Asean is the world’s seventh-largest economy. Asean is expected to rank as the fourth-largest economy by 2050.
The compound annual growth rate (CAGR) of the global accountancy market is forecast to grow at a rate of 3.7% from 2016 to 2021. Similarly, the Asia-Pacific accountancy services market is expected to grow at a higher CAGR of 6.5% in the same period.
All these figures add up to one thing — huge potential opportunities for the accounting professionals in the Asean.
It’s more a question of how the accounting professional can best leverage those opportunities to secure a piece of the pie.
Hunting in a Pack
“Collaboration”. This was the one word I heard at every meeting and focus session of Singapore’s Committee on the Future Economy — Legal and Accounting Services Working Group where I had the humble privilege to serve as a member. Professional firms will need to expand their networks to source complementary partners with skills and knowledge to better serve their clients jointly in this region as clients expand their footprints.
The future will require professionals to be able to lead and work with multidisciplinary project teams to come together to solve the problems that clients grapple with.
Beyond that, we may see more professional firms with multiple disciplines to complement the breadth and depth of services that can be provided to clients through multidisciplinary teams to break down some of the silos across industries.
Today, accounting firm PricewaterhouseCoopers (PwC) is the 10th-largest legal practice in the world. PwC has legal presence in more than 85 jurisdictions in the world. As a comparison, the largest law firm in the world, Baker McKenzie, has legal presence in about 76 jurisdictions in the world.
Technology will not replace the professionals, but it will change how accountants, lawyers, engineers, doctors, and educators work; clients’ expectations of their professional advisors; and what clients are willing to pay for. More importantly, it will differentiate the professionals. Those who do not embrace technology will be left behind.
Technology platforms will emerge to allow networks to develop across professional industries. Professionals, however, must not lose sight of the importance of truly understanding their client’s business and future plans. Professionals need to help their clients think about their business and anticipate future needs or issues that the client may not have thought about.
There is an opportunity to provide highly customised advisory to clients that technology cannot easily replicate.
It will be important for professionals in the service firms to have industry experience at some point in their career to truly understand their clients’ business and their challenges.
This will allow the professionals to further deepen their expertise.
Although technology can benefit many, there are weaknesses associated with it — for example, cyber security and privacy. The Achilles’ heel of technology can create opportunities for the professionals in the governance, risk management and compliance realms. Although commoditisation may bring some lower cost options to clients, there still has to be accountability if something were to go wrong.
Beyond adopting baseline technology, there is a need to foster a culture of innovation. We can identify two areas to develop a culture of pervasive and collaborative innovation — technology innovation and business model innovation.
Technology is changing the process and delivery of professional services.
Leveraging technology enables firms to not only enhance productivity — such as automating repetitive tasks — but also provide additional value to clients. Professional firms who fail to take advantage of technology and do not adapt to new realities risk losing market share to more forward-thinking practices or may even be replaced by technology solution providers altogether.
Business model innovation presents opportunities to traditional accounting firms to meet their clients’ need for fuller services in a variety of disciplines.
The top accounting firms have diversified their businesses and have expanded beyond statutory audit services by providing higher value services — eg consulting and risk management services. They have also partnered companies from other industries, eg technology companies, to leverage each partner’s strengths to enhance its services to clients.
Accounting professionals should strive towards becoming holistic, trusted business advisors to their clients. This would entail the ability to “see around the corner” to guide clients in making strategic business decisions.
There is thus a need for accounting professionals to build on their core strengths and skillsets, and become professionals who can bring value (eg anticipate and advise clients on new trends) and help clients shape business strategies.
The accounting professionals will need to be open to any technology disruptions and be prepared to look for opportunities that technology brings to either upskill or leverage the efficiencies of the technology.
As technology replaces routine tasks, accounting professionals need to acquire deeper skills to create value, and more importantly, ensure that they can utilise their skills effectively on the job.
Learning throughout life needs to be our way of life, so we can quickly and easily adapt to new job demands, or even switch jobs or industries as the economy transforms.
We must continue to build capabilities and competencies to meet the demands of a changing landscape to stay relevant. We must always be ready to improvise, experiment and innovate.
As a profession, we need to go beyond the pursuit of the highest possible academic qualifications early in life to focus on acquiring and using knowledge and skills throughout our lives.
- Published in Blog
By Andrew Griggs, Kreston Board Director and Senior Partner of UK member firm Kreston Reeves.
In February, the Institute of Chartered Accountants of England and Wales (ICAEW) published its quarterly Business Confidence Monitor. The survey of 1,000 accountants working in businesses across the UK shows a pessimistic picture. Business confidence, whilst improving slightly, remains firmly in negative territory.
Put bluntly, businesses crave certainty and that is in short supply. Change and uncertainty are, it seems, the new normal.
The ICAEW’s Business Confidence Monitor also showed a more cautious approach from businesses to long term investment, and economic data shared at a recent breakfast briefing points to suppressed – and very modest – wage growth.
The picture is complex and extends beyond the looming Brexit deadline.
Organisations are cautious as we are fast entering what has been coined the ‘fifth industrial revolution’; a revolution driven by technology, and one which will be faster, more scalable and adopted by more people than perhaps all previous industrial revolutions. Everything will be more readily available and will make our lives simpler and faster.
Businesses of all sizes are driving this revolution, but they too will feel its impact. The rising influence of technology on all aspects of society is influencing our perception of value – it must be cheaper because it can be made faster and in greater numbers using new technology.
However, the ICAEW Business Confidence Monitor also shows input prices rising by some three per cent yet with sale prices remaining static. The cost of business is increasing, and these costs cannot be passed on to the customer. The pressures of profits today make long term investment a bigger challenge.
At a recent London-based robotics event, attendees were asked if their job existed when they were at primary school – 67 per cent said “no”. [2017 Outsource Magazine.] A study by McKinsey in the summer of 2017 showed that 60 per cent of the workforce could be replaced by technology that exists today. Both are sobering statistics.
Generation Z, sometimes called the ‘IGen’, are now replacing millennials as the youngest members of the workforce. Born in the mid-1990s they have grown up managing their personal brand on Instagram, SnapChat and other social media platforms. The very latest technology is a natural part of their lives.
They are independent and competitive, happy to work alone and to be judged on their own merits. Honesty and transparency are demanded from their peers, the brands they choose to engage with, and from future employers.
Consequently, they relate more easily to an individual brand, are entrepreneurial and more likely to step out of the big corporate environment to explore new workplace experiences. Portfolio careers already commonplace will be normal.
And unlike the calls of the 2000s for a greater work-life balance – something accountancy firms have worked hard to achieve – Generation Z look to work-life integration where the two are seamlessly blended to suit their own needs.
Employers today are having to manage a workforce with very differing needs – the older Baby Boomers approaching retirement, Generation X in senior management roles, Millennials and now Generation Z.
This leaves businesses and their advisers in uncharted territory. Employers of tomorrow will at the very least have to adopt lenient working practices. They will have to accommodate a generation with continued learning, development, the latest technology and challenges to hold on to them.
Customers too are looking for greater value in all they do and buy, and brand loyalty wears thin. With technology changing the way we live and do business, and with unemployment at its lowest for many years, organisations are having to think carefully and in many cases re-prioritising their investments.
Whilst capital investment may continue to be depressed, businesses are re-deploying their profits. They are nervous of investing in the wrong area. Businesses are showing a higher priority in developing and supporting staff and experimenting, especially in IT systems and processes, to improve tomorrow.
Brexit is of course a contributing factor to a lack of business confidence, but we mustn’t forget the impact of both the fifth industrial revolution and the demands of a very different workforce.
So what should businesses do to embrace these challenges? The traditional mantra has been to ‘understand your client’. Businesses if they do not already do so need now to ‘understand their staff’. Listen to what your staff at all stages of their career have to say and where possible act upon it. Understand too the technology that is available today that will affect the way your business works tomorrow. With change being the new normal businesses will need to continuously experiment and try different ways of doing and running their business. Those that do not may not last.
Accountancy firms are having to address these very same problems. We are well-placed to take that step back from a clients’ business and provide the independent and impartial insight businesses need. Scenario planning where the impact of future change is played out today does help businesses prepare for tomorrow.
Businesses are not reluctant to invest, but they are taking their time before making long-reaching decisions. They are also investing much more in their workforce and that cannot be a bad thing.
- Published in Blog
“The China One Belt, One Road is going to be the new W.T.O – like it or not.” These are the words of Joe Kaeser, chief executive of Siemens at the recent Davos conference. Officially unveiled in 2013, the grand vision of the Chinese government to create a vast infrastructure and transport network that spreads over 68 countries has the potential to reshape the global political and economic landscape. The initiative harks back to Zhang Qian, a Chinese imperial envoy, who 2,000 years ago helped establish the Silk Road – a series of trade routes that linked China to Central Asia and Arab kingdoms to promote its eponymous export.
However, the One Belt, One Road (OBOR) initiative is not just about creating physical connections. It aims to create the world’s largest platform for economic cooperation. This includes policy alignment, trade and financing collaboration, and social and cultural cooperation. OBOR has already made some practical achievements, including bilateral cooperation agreements with Hungary, Mongolia, Russia, Tajikistan, and Turkey. Furthermore, 200 enterprises have also signed cooperation agreements for projects along OBOR’s routes.
In the wake of slowing domestic growth, President Xi Jinping is banking on OBOR to fuel the next stage of Chinese expansion. Naturally, such an ambitious plan does not come cheap. Along with creating the Asian Infrastructure Investment Bank and a separate development fund, The Economist reported that the total investment costs could be as high as $8 trillion – and there is no official end-date in sight. But these mammoth costs are not deterring the world’s most populous nation. In fact, they have also invited Latin American and Caribbean countries to join OBOR with the Chinese Foreign Minister, Wang Yi, stating that the region was a “natural fit for the initiative”.
However, the West views the OBOR with a mix of skepticism and mistrust. The Trump administration sees China as a strategic competitor and OBOR as a tool to exert political influence. Neither UK PM Theresa May nor French President Emmanuel Macron have officially endorsed the plan due to trade imbalances between the EU and China. OBOR projects have also faced criticism because of the lack of transparency and use of Chinese contractors. The Center for Strategic and International Studies stated that Chinese companies received 89% of contracts for Beijing-backed infrastructure projects in Asia and Europe. On top of this, there have also been a significant number of stalled and failed projects – mostly due to funding and bidding issues. The Financial Express revealed that a $3 billion refinery contract in Myanmar was terminated to due financial issues and a $15 billion high-speed railway in Thailand was cancelled as not enough work was subcontracted to Thai companies.
OBOR has the potential to be the most important economic development of the 21st century. And as a result, it’s imperative that businesses are aware of all the opportunities and tax implications it brings. It’s also important to acknowledge that OBOR stretches into politically complex and volatile regions, and any business must be aware of the potential hazards. As the Professor of Global History at Oxford University, Peter Frankopan, put it: “It’s not just China that is changing. If you look at Turkey, or the rebirth of the Taliban in Afghanistan, or the return of Iran to the family of nations, or escalating pressure in Kashmir, these are all interrelated problems. We tend to look at things in silos. But it seems more instructive to see it as a whole region, shaking under a lot of pressure.” But whatever the long-term implications of OBOR, Kreston’s global network of experts have the knowledge to help your business operate efficiently and profitably, in China and across the entire OBOR region. What also differentiates Kreston members from other firms is that we can put a face to the members in our network, meaning that you get the benefits of a deeper, more cooperative network who can utilise their local specialist knowledge to get the best results for your business.
- Published in Blog
“A crushing, horrible, unfair disaster”. That’s how President Trump described inheritance tax; he aims to abolish it by 2025. Other countries have already repealed it – Russia, Australia and Sweden to name a few. But why has one of the oldest taxes (dating back to the days of the Roman Emperor Augustus) become so unpopular with governments? There are four main reasons.
It’s not fair
Many perceive it as a “double tax”, forcing them to pay out on their already taxed income once they pass.
People hate it
People are naturally protective of wanting to secure a legacy for their loved ones and they do not want to see almost half of it taken away by the state.
People don’t pay it
According to This is Money, “[in the UK] just 1 in 20 estates pay inheritance tax now”.
It doesn’t work
In South Korea, despite inheritance taxes of up to 65%, multinational companies known as chaebol (e.g. Samsung and Hyundai) are family dynasties, exploiting various legal loopholes to pass on the wealth to successive generations.
But does inheritance tax deserve this negative reputation? Let’s take a look at the other side of the coin.
It promotes equality
Arguably, there’s never been a greater need to disperse wealth, with half of Europe’s billionaires inheriting their riches. And despite the case against it, many countries still see inheritance tax as an effective tool to help create a fairer society.
It’s not the only double tax
Sales tax is also a double tax, yet it doesn’t receive anywhere near the same kind of ire.
It fosters hard work
In the New Statesmen article In defence of inheritance tax, the political commentator Stuart White stated, “the tax helps ensure that wealth is distributed more in line with thrift and hard work because it prevents the spendthrift and the lazy maintaining wealthy lifestyles through inheritance”.
Most countries still have it
Only 15 OECD countries levy no taxes on property passed to lineal heirs.
To conclude, the bell is tolling on inheritance tax (albeit slowly). Rightly or wrongly, it generates resentment in the public like no other tax, and politicians have taken note. People despise the thought of having the money they’ve saved for their entire lives being appropriated by the taxman. If two friends are willing to go as far as this to avoid paying it, it may suggest that inheritance tax’s time is up.
But whatever your views on the tax, know that our experts can help you leave a legacy to your loved ones in the most tax efficient way possible.
- Published in Blog
Artificial Intelligence (AI) has been garnering a lot of media attention of late. And for good reason – its potential is revolutionary. But why is it suddenly taking off now when it has been around for decades? The answer can be traced back to 2006. The New York Times pinpointed it to when Amazon started selling cheap computing over the internet and Google and Yahoo! released statistical methods for dealing with the unruly data of human behavior. A year later, Apple released the first iPhone, which began a boom in unruly-data collection. And combined with the consequent proliferation of smartphones and declining computing costs, AI has been given the conditions where it has been able to thrive.
There doesn’t seem to be an industry untouched by AI. It’s helping to tackle everything from eye disease diagnosis to terrorism, trafficking and money laundering. Campaign also highlighted the potential effects on shopping habits and brands as AI becomes ever more integrated into the consumer experience.
Accountancy is far from exempt. Indeed it’s one of the industries set to be most affected by AI, where it has the potential to take on auditing and other, shall we say, more mundane tasks. The Financial Times commented, “Better technology can improve the quality of audit work by carrying out tasks faster, and potentially more accurately, than a human ever could. It can also assess huge volumes of data and generate new types of insights”.
However, I believe the impact of AI could be much more far reaching. The ICAEW paper Artificial Intelligence and the Future of Accountancy stated, “AI raises opportunities for much more radical change, as systems increasingly take over decision-making tasks currently done by humans.” Such an example could be using AI to globally structure a group in order to gain maximum tax efficiency. It is these kinds of high-end tasks that AI could support and potentially take over in the future. As Amazon CEO, Jeff Bezos, put it, “Basically, there’s no institution in the world that cannot be improved with machine learning”. Already we’re seeing more trust being placed in decisions made by AI with Danish company a2i helping to regulate prices at petrol pump stations. It’s this speed and ability to solve complex problems that makes AI so adept at decision-making.
Will AI completely do away with accountants all together? I hope not! But in all seriousness, I believe that at its heart accountancy is a face-to-face profession. Our clients are people and it’s fair to say that you deserve somebody who you know you can count on, not just lines of code. That’s why our strapline is Knowing You. To understand your needs and aspirations. And the challenges you face. To build a lasting partnership. That’s something a bot will never be able to do.
- Published in Blog
Earlier this month, the Senate voted in Donald Trump’s controversial $1.4 trillion tax reform bill by the narrow margin of 51-49. It represents the largest overhaul to America’s tax system in 31 years and is a major victory for the U.S. president. He proclaimed on Twitter:
“We are one step closer to delivering MASSIVE tax cuts for working families across America. Special thanks to @SenateMajLdr Mitch McConnell and Chairman @SenOrrinHatch for shepherding our bill through the Senate. Look forward to signing a final bill before Christmas!”
A key aspect of the bill is the reduction of the tax rate on corporate income from 35% to 20%. According to the Unified Framework for Fixing our Broken Tax Code, the rationale is to “prevent companies from shifting profits to tax havens” and limit “offshoring”. This means multinational corporations will now be able to repatriate foreign income on “high-profile returns” (such as intellectual property) back to the U.S. at a rate of 10% (12% for cash held offshore and 5% for non-cash assets). The end result is to try and substantially boost the household income of American workers.
Naturally, there are many differing opinions on what these seismic changes will actually bring. Bloomberg cites the banking, pharmaceutical, technology and fossil fuels industries as some of the potential winners. However, renewable energy companies look set to lose out. The Financial Times put it rather bluntly by saying: “If you are a global company that has made leveraged investments in U.S. renewable energy production in recent years, those assets now look like a bird that has run into a wind turbine.”
To get under the skin of these complex changes, a closer look at the current U.S. tax system is needed. As it stands, the U.S. takes a “worldwide” approach. This means that any American corporation’s profits are taxed at the same rate regardless of whether they are earned domestically or abroad. However, what must be noted is that profits made abroad aren’t taxed in the U.S. until they are “repatriated” from a foreign subsidiary to a U.S. parent company. According to Reuters, Trump’s tax reform bill promises a minimum tax rate on foreign income. It will calculate an average for all foreign earnings combined – the so-called “global minimum”.
Some analysts claim that this system has a fundamental flaw. The more an American company moves its profitable operations to countries that have tax rates of 20% or higher (often richer countries perceived as America’s economic competitors), the more it can shift profits to tax havens – without paying taxes on those profits. Ed Kleinbard, a law professor at USC and former chief of staff for Congress’s Joint Committee on Taxation, told Bloomberg, “Companies will double down on tax-planning technologies to create a stream of zero-tax income that brings their average down to that minimum rate.”
Conversely, pro-Trump commentators dispute this. In the article Trump hands American small businesses and workers a win, Stephen Moore and Alfredo Ortiz argue that “In reality, nearly all American small businesses, even those that don’t qualify for the new 25%, would get tax relief under this bill… [and that it will] save ordinary small businesses thousands of dollars a year in taxes that can be reinvested back into their businesses, employees, and communities.”
Ultimately, these tax reforms will have vast implications. Whether they will turn out to be what Donald Trump and the Republican Party envisage is still up for debate. Tax can undoubtedly be a convoluted and complex issue, and it’s in times like these that businesses need expert guidance to ensure they are complying with tax laws in the most efficient way possible.
If you have any questions on how these tax reforms may impact your business, or you would like to discuss business strategy, please contact us today.
- Published in Blog
To say that there’s been a backlash against globalisation in recent years would be an understatement. From demonstrations in France and Germany, to President Trump’s pledges to renegotiate or withdraw from global trade deals, some of the world’s most influential countries have taken significant steps to bring their global output back in-house.
But despite this potentially seismic shift, the globalisation genie can never really be put back in the bottle. It’s more the case that globalisation is evolving. A recent Harvard Business Review article highlights that while the growth of global trade – and the flow of capital across borders – isn’t at the level it once was, the role of data in driving the global GDP is rapidly on the rise. Research from McKinsey Global Institute last year suggested data accounted for 35.9% of the world’s $7.8 trillion GDP in 2014.
It has long been the consensus that those who have benefited most from globalisation are the multi-national corporations. But this new “digital globalisation” seems to level the playing field, granting new opportunities to SMEs. Thanks to platforms such as Amazon, small businesses can turn themselves into “micro multinationals“, able to offer their goods and services to a global marketplace and compete with the industry juggernauts. This sentiment is echoed by Alibaba CEO Jack Ma, who commented: “The rules of globalisation were decided only by a certain number of big global corporations but now thanks to ongoing digital transformation, the power will not stay in the hands of big enterprises only but it’ll be shared with small and medium size firms as well”.
It’s just not businesses that are recognising the opportunity – Estonia is a nation at the forefront of digital globalisation. Its e-Residency initiative enables people to register an EU-based company from anywhere in the world, complete with a business bank account. Speaking to City A.M., Chief Information Officer for the government of Estonia Siim Sikkut stated: “Digital initiatives like e-Residency are crucial tools for realigning the role of government in the Information Age”.
Here at Kreston, we too are making our clients aware of the opportunities that digital globalisation presents – ensuring they have the knowledge, insights and expertise they need to negotiate the different cultural, financial and tax systems of whichever geography they operate in. Former United Nations General Secretary Kofi Annan once noted, “It has been said that arguing against globalisation is like arguing against the laws of gravity”. However, it would seem that those laws are now ready for updating and reinterpretation. And Kreston can help your business stay at the forefront of this new age of globalization.
- Published in Blog
“May you live in interesting times” goes the Chinese expression. In fact, it’s actually more of a subtle barb to denote disorder and uncertainty. And right now, it would appear that we live in just such a period of history. In the US, we have an “unorthodox” presidency that has a more isolationist outlook, Brexit negotiations seem to be at an impasse, and the push for Catalonian independence threatens a political crisis in Spain. And that’s not to mention the continuing conflict in the Middle East and tension in North Korea. All of these issues have repercussions for the global economy. But what might they mean for SMEs? How can they thrive in the midst of all this uncertainty?
Firstly, we need to outline some of the core difficulties facing businesses. In the interest of simplicity, I am drawing on facts and figures from the UK economy but many of the general difficulties – and certainly the sense of uncertainty – apply throughout the world. There’s the problem of wage stagnation, with a report in The Guardian citing the think tank The Resolution Foundation, which stated that “the 2010s are on course to be the worst decade for wage growth since the one that included the Battle of Trafalgar in 1805.” Also, much has been made of a skills deficit. According to Lloyds Bank’s Business in Britain report, more than half of British companies are struggling to recruit the staff they need. On top of this, we also have higher global rates of inflation and low interest rates. City A.M. published an article entitled Low interest rates and high public spending drag down productivity. It includes the damning statistic that “output per hour in the UK has averaged just 0.2 per cent per annum growth. This is one tenth of its long-term average.”
But is it all really doom and gloom? The Economist had a different perspective on rising inflation. It commented that “The story for 2017 is not of inflation running too hot but rather of a welcome easing of fears of deflation.” It also noted other positive economic indicators such as the revival of commodity prices. A weaker pound has led to a boon for exporters with forecasts revised for factory output for this year and next year to 1.3% and 0.5% – up from 1% and 0.1% respectively. So, although there’s an element of UK low productivity holding back wage growth and some uncertainty around Brexit, the UK economy continues to show sustained resilience. It has as good as full employment and has just posted GDP growth of 0.4%. And although the needs of every business differ, at Kreston, we’re here to help our clients navigate their way through the uncertainty. Here are just a few of the areas we can help:
• Guide you through the risks and opportunities in a changing environment
• Provide business planning to help maximise profits
• Implement efficient structures to manage your commercial and tax risk
• Review your successions plans to protect the future of your business
Looking forward, the most successful businesses will always be the ones that embrace change rather than shy away from it. In an article in Forbes, Linda Peia analyses how entrepreneurs cope with uncertainty. Out of her five points, the one that stood out the most for me is to “face uncertainty with a strong sense of pragmatism and resilience”. And that’s exactly what we try to do here at Kreston. When we sign off with “Knowing You”, we’re underlining our understanding of the pressures and aspirations you have – because we’re right there with you, providing you with the knowledge and skills to help take your business to the next level.
- Published in Blog
Earlier this month, the Slovenian Prime Minister, Miro Cerar, stated that he “want[s] to position Slovenia as the most recognised blockchain destination in the European Union.”  Such grand declarations shows just how far the cryptocurrency public ledger has come in a short period of time. But it’s not just blockchain that’s reshaping industry; there’s a whole range of emerging technology that has the same kind of revolutionary potential. The Internet of Things, augmented and virtual reality, artificial intelligence, 3D printing, robots and drones have all garnered plentiful column inches because of their disruptive capabilities. In fact, many of these topics were covered at our Asia Pacific conference in Kuala Lumpur this August, where Patrick Schwerdtfeger from Trend Mastery talked about “Being a Leader in a Data-Driven World”. But what do of all these emerging techs mean for SMEs?
It’s my opinion that SMEs should be open to these new and emerging technologies. In fact, they could even lead the way. In the case of artificial intelligence, The Financial Times stated, “…there is no reason why SMEs should not welcome these advantages with open arms. The winners in the automation race will be the fastest, nimblest and hungriest, not the big beasts.” I believe that emerging tech should be thought of not just as an operating expense or capital investment, but as a strategic enabler to drive scalability, competitiveness and growth. In fact, according to a new survey-based whitepaper by technology company Insight Enterprises Inc., 69% of small and medium-sized businesses are devoting part of their IT budget for 2016 to newer and emerging technologies. These included 3D printers and wearable devices, as well as dashboard and data visualization software applications.
In the accountancy industry, I’ve seen first-hand the effect of what emerging tech can do. Automation means it’s now possible to free up manpower from administrative tasks and to streamline our processes. This leaves us more resources on to focus on consultative areas, providing our clients with essential expertise to help them thrive and expand, perhaps embracing tech-based opportunities of their own. But it’s also worth noting the reverberations that these technological advancements can have on the wider economy. Research by YouGov estimated that robots could take the jobs of 4 million UK private sector jobs in 10 years, with the finance and accounting, transportation, distribution and manufacturing industries the most affected. 
There’s always inherent risk whenever a business chooses to adopt a new technology. Recent history is littered with examples of lauded tech that failed to live up to the hype. Even the biggest and most successful companies don’t always get it right. Prime examples include “Google Glass” and Apple’s doomed PDA device – the “Newton”. However, on the other side of the bitcoin, businesses that fail to acknowledge change can soon find themselves consigned to the past, Blockbuster Video being a case in point. It’s a tough balancing act to marry immediate business with that of the future, and especially so for SMEs. There’s no right answer, but for me, the acclaimed futurist Roy Charles Amara hit the nail on the head when he said, “We tend to overestimate the effect of a technology in the short run and underestimate the effect in the long run.”
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In the UK, they’re known as Generation Y, in Germany Generation Maybe, and China has labelled them as the generation that eats the old. Millennials, people born between 1980 and the mid-1990s, have many names, and few of them are complimentary. They’re often described as lazy, entitled and narcissistic, but is this really the case? That was certainly not my experience of the Kreston members who attended our recent Future Leaders Conference in Berlin. What I found was a group of people who were dynamic, collaborative, and passionate. They were full of ideas on how to push the business forward and find new ways to help our clients. It inspired me and highlighted the importance of understanding this generation. In fact, our upcoming conference being held in Cambodia in November features a talk called “Making the Most of the Millennials: engaging the digital native generation as clients and employees”. Our guest speaker, Graeme Codrington, will be outlining how best to maximise the potential of Millennials and the massive rewards that can come from understanding this generation.
The transfer of wealth (the Y you need to care)
In the US, it’s estimated that a staggering $30 trillion of financial and non-financial assets will be passed from Baby Boomers to Millennials. However, such a colossal transfer of wealth does not come without its difficulties – and this is where Kreston can help. From asset protection to family wealth and trust planning, our experts across the globe can help ensure that your money finds its way to your loved ones in the most tax-efficient way possible. But looking ahead, what will this great shift in Millennial spending power mean for the wider economy and your business? To answer this question, we need first need to know what constitutes a Millennial.
Millennial traits (the who they are)
Though the descriptions of Millennials vary from region to region, they are set to become the largest generation in history. According to the US Census Bureau, the 75.4 million US Millennials now outnumber the 74.9 million Baby Boomers. And on top of that, they are the most educated generation in history. Roughly 79% of US Millennials have at least a bachelor’s degree, compared to 69% for Generation X and 62% for Baby Boomers. They are tech savvy and more health conscious than previous generations but they are also beset with money issues. More than 40 million US Millennials have student loan debt, owing an average of $29,000 each and a combined total of more than $1tn. They also marry later and are opting to stay at home longer with their parents. Yet Millennial attitudes towards home ownership could change. The sheer numbers of this generation and an increased desire to settle down could spark a wave of home sales in the future.
Access and the double-bottom line (the what they want)
For Millennials, it’s not about buying goods or services – it’s about accessing them. Brands such as Airbnb, Uber and Spotify have come to typify what is now known as the “sharing economy”. Quite simply, they want to have the goods or services they want without the high fixed costs or hassle of ownership. This is already turning numerous industries on its head, and at Kreston, we have been at the forefront of helping companies adjust to this shifting landscape.
Furthermore, if you want your business to remain relevant to a Millennial workforce, you need to know what they want. Today, it’s not enough for a business to be profitable, it must also have social impact. This is what’s known as the “double-bottom line”. A study by The Society for Human Resource Management revealed that “94% of Millennials want to use their skills to benefit a cause”. It’s no surprise then to see the biggest brands take Corporate Social Responsibility (CSR) extremely seriously. Lego, Google and Microsoft took the top three spots in the Forbes list of the 10 Companies with The Best CSR Reputations In 2017. And as part of our own CSR initiative here at Kreston, I’m proud to say that we’re adhering to four of the UN Sustainable Development Goals which are: Good Health and Well-being, Quality Education, Decent Work and Economic Growth, and Responsible Consumption and Production.
I believe that understanding this generation is fundamental to the success of your future business. Millennials are often on the receiving end of negative press. They are characterised by a selfish attitude and having their eyes glued to their smartphones, but I for one have great faith in their potential. As the founder of Alibaba, Jack Ma, put it, “Trust the young people; trust this generation’s innovation. They’re making things, changing innovation every day. And all the consumers are the same: they want new things, they want cheap things, they want good things, they want unique things. If we can create these kinds of things for consumers, they will come.”
Jon Lisby, Kreston CEO
- Published in Blog
In his article, Sutton traces an overview of the market reaction to the decision by the British electorate on the 23rd June to exit the EU. He lists several effects following the referendum as Sterling devalues to its lowest level in 30 years against the dollar and the euro, UK manufactured goods become instantly more competitive, manufacturing outputs rose to their highest level in 25 years in August and raw material imports were predicted to become more expensive.
Despite the initial tumultuousness in the market after Brexit, economic numbers showed that the British manufacturing sector is able to compete with German manufacturers as the sector “has outperformed the productivity growth of the service sector in the 20 years prior to 2014”, says Sutton.
But trade with the EU is still very important. “There is an air of cautious optimism across the sector. Most manufacturers echo the sentiment that EU customers and suppliers who trade with the UK will want this to continue as the trade is very significant, 54% of UK imports come from the EU and 47% of UK exports go to the EU. Would it be foolhardy to jeopardise this lucrative trading arrangement?”, questions Sutton in his article.
Come rain or shine, there is an air of uncertainty. Sutton lists three important issues that need to be clarified.
– The Brexit government’s ability to negotiate a free trade agreement with the EU and the looming spectre of immigration which could derail this process.
– Government consideration as to how to fund EU manufacturing- will this be replaced once this source of funding has been switched off?
– Will the UK government support and drive the manufacturing sector?
According to Sutton, it is very important to keep a free trade environment between the UK and the EU, but things need time to be settle. “UK manufacturing needs to recognise that any deal to negotiate free trade status in the EU will be lengthy, face many hiccups along the way and ultimately will need the agreement of all 28 EU members”.
Clearly there are big challenges ahead.
Source: Kreston Reeves
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In an excellent article by, Easton Bilsborough, technical manager for charities and NFP sectors at the Chartered Institute of Public Finance & Accounting (CIPFA), Bilsborough talks about issues facing the NFP sector and points out the benefits of adopting accounting standards.
According to Bilsborough, a recent study by the Consultative Committee of Accountancy Bodies (CCAB) on financial reporting by NFP, showed organisations in this sector, in at least 179 countries, having problems related to accounting for non-exchange transactions; fund accounting; income recognition; gifts in kind; mergers; treatment of branches; and reporting on reserves. In addition, the absence of global standards prevented the attainment of high-quality standards within individual jurisdictions.
Accounting in the NFP sector has made slow progress and according to Bilsborough, the International Forum of Accounting Standard Setters has formed a working group to build a database of practice to help move forward NFP reporting across the globe.
Achieving international accounting standards would bring several benefits to the NFP sector. It would improve the quality of reporting and make charities more transparent, making it clear for support from donors and funders. Also, with consistent reporting, the not-for-profit sector would be better understood.
Many NFP entities work across a number of jurisdictions and the development of standards that are accepted internationally will be of significant benefit to them. There is however, a long way to go until these standards are ready to be implemented.
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In a coffee shop or in an airport, it’s normal to see people working on their laptops, connected to the public wifi. However, this kind of network is the most vulnerable to cybercrimes and most people are unaware of the risks of using public Wi-Fi.
More than 60% of consumers think they are safe when connected to a public wi-fi, according to a survey conducted by Symantec, a cybersecurity company. Common activities on public Wi-Fi include logging into a personal e-mail account (58%), logging into social media (56%) and accessing bank or financial information (22%).
Here are 10 simple tips from Kreston’s US member CBIZ that can help keep your data secure.
1. Use a VPN: a Virtual Private Network (VPN) is the best technical solution to protect your data as it creates an encrypted tunnel to protect your information.
2. Look for encrypted websites: when surfing the web, look for websites that begin with “https://.” These are considered more secure compared to those that begin with “http://.”
3. Secure your computer: choose the “public network” Wi-Fi option on your computer instead of “home network” or “work network” options. The public network option locks down the connection, ensuring your computer isn’t sharing any files or other important data with devices on the local network.
4. Shopping online: never store your credit card, bank account numbers on a website, or even on your device, while connected to public Wi-Fi.
5. Access to social media : logging into Facebook and/ or clicking on links from social media sites from a business device may leave your proprietary data at risk.
6. Anti-virus software: you need to make sure your virus definitions are up to date.
7. Hotspot: a mobile or personal hotspot instead of public Wi-Fi may be the safest option. You can also hide your hotspot network from public view.
8. Your company Wi-Fi may be not the safest place as well: bear in mind that the shared network Wi-Fi in your business works in the same way as public networks in airports, libraries, hotels and coffee chains. It is a public access point so you should not share devices or files across it.
9. Educate employees: companies should keep a policy to educate employees about the use of their business devices, especially those who do business outside of work.
10. Report a cybercrime: If there is any suspicion that some device may be infected, it should be reported to the IT department immediately.
Additional Source: Telegraph
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Recently, Saudi Arabia signed a license agreement with the International Financial Reporting Standards (IFRS) Foundation to stamp its intention to incorporate IFRS Standards into its legal framework. This means that the Saudi organisation for Certified Public Accountants will have the right to publish the official Arabic translation of IFRS Standards and the IFRS for SMEs Standard for the purpose of adoption into law.
In 2017, banks and insurance companies will be required to use IFRS Standards, with listed companies. From 2018, other companies will be required to use the IFRS for SMEs Standard.
The wider adoption of IFRS in Saudi Arabia will help drive the quality and comparability of financial information. These rules bring transparency, enabling investors and other market participants to make informed economic decisions. It is important that entities impacted by the change start to plan in good time and talk to their professional adviser early in the process.
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Automated technologies and artificial intelligence in our society will challenge many professions in the future. Some of them may be strongly affected by technology and probably will operate in a completely different way from what we know. According to the book, ‘The Future of the Professions,’ by Richard and Daniel Susskind, the tax and accounting profession will also face significant changes.
Laurence Kiddle, in an article on the ICAEW website, has some interesting ideas – for example, in the near future, “it will become more economical for rule-based software to complete tax returns instead of expensive (and error-prone) humans.”
Another idea highlighted by Kiddle is that “tax compliance is simply interpreting regulations looking backward and that tax advisory is using those same regulations to look forward. So, even the planning and advisory aspects of tax work are ripe to be automated.”
All these ideas remind us of the importance of distinguishing automation from innovation. The former is the use of technology to support a traditional model, while the latter is the process of implementing new ideas using technology. The challenge here, as Kiddle points out, is to find a way to innovate the tax and accounting profession.
In our society, accounting firms of all sizes are looking to automation to streamline processes and to help deliver quality and efficiency. It is through innovation that firms will ensure they remain relevant now and in the future.
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Crowdfunding is still relatively new but should still be considered as a viable source of equity. Nowadays, it is providing money for everything from charity campaigns to technological innovations.
When should investors and businesses look to get involved in a crowdfunding opportunity?
According to Cap Willey, Managing Director of the Tax Group at CBIZ Tofias, Kreston’s USA member firm in Boston, we need to carefully analyse three key benefits and their risks before taking the plunge.
In his article, at PBN.com, Cap summarises these benefits/risks and the regulations that apply to the USA including:
– Access – Fundrise, Crowdfunder and GoFundMe are examples of crowdfunding portals that can be used to reach new and accredited investors. They have to follow rules set by the Securities and Exchange Commission (SEC) to be accepted as accredited investors. Companies are permitted to raise a maximum aggregate amount of $1 million through crowdfunding in a 12-month period.
– Liquidity – the necessity of waiting long-term before liquidity requires a different mindset from the investor. The benefit of liquidity also highlights one of its key risks that individuals who take part in crowdfunding generally do not have the same power of resources as those who choose the traditional market.
– Fractional ownership – more partial owners are allowed in crowdfunding through its investor pool model.
If your enterprise is new to crowdfunding go for a project which best fits it as a single aspect of the overall equity package.
- Published in Blog
A legal amendment to the Finance Bill recently accepted by the UK government may pave the way for big changes in multinational corporate tax transparency and may set the tone abroad.
The amendment, tabled by UK Labour MP and member of the Public Accounts Committee (PAC), Caroline Flint, would allow the Treasury to receive financial information from multinationals, either headquartered or with a significant presence in the UK. According to the amendment, profits of multinational corporations will be disclosed to stakeholders and not just to tax authorities, and their tax information will include a “country-by-country report”. This would require each transnational corporation to provide the following information:
1 – The name of each country where it operates.
2 – The names of all its subsidiaries and affiliates in these countries.
3 – The performance of each subsidiary and affiliate, without exception.
4 – The tax charge in its accounts of each subsidiary and affiliate in each country.
5 – Details of the cost and net book value of its fixed assets in each country.
6 – Details of its gross and net assets for each country.
Source: Tax Justice Network
The idea of a “country-by-country report” refers to the already existing regulations on the subject: The Taxes (Base Erosion and Profit Shifting) (Country-by-Country Reporting) Regulations 2016.
The amendment happens shortly after the landmark ruling of the European Commission to order Apple to pay back up to £11 billion in taxes to Ireland. The EU’s antitrust arm concluded the tech firm was given illegal tax benefits.
In terms of tax evasion and avoidance of global corporations, the UK government, tax campaigners and NGOs expect that the initiative as a country-by-country report can have a positive impact on tax transparency worldwide. ActionAid claims that, according to IMF numbers, developing countries may lose £164,3 billion a year to corporate tax avoidance.
The support for country-by-country tax reporting is growing and it is important. The UK is putting the legal requirements in place and this will enable the reporting to be introduced when appropriate. A consistent introduction on an international basis would be the best way to guarantee its success worldwide.
Source: The Accountant Online
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Instead, the first action should be to devote time to looking at ways to return the top line and margin to its former strength. Whilst looking to cut costs may support some short term gains, this may damage the long-term structure and ability to recover – leave cost cutting until the top line review has been concluded.
I found more interesting tips about how to overcome financial setbacks on Forbes, where three experts offered the following advice:
1 – Sometimes cuts need to be made – What to cut? What not to cut? W. Michael Hsu, Founder and CEO of DeepSky, says that you can’t cut coffee and accounting. By coffee, he means small perks around the office. Do you want to irritate your team when you most need them to help take you out of the situation? Accounting is also an essential part of overcoming financial setbacks and you need it more than ever for a clear picture of what’s going on.
2 – Step back and reconfigure – Elle Kaplan, CEO and Founding Partner of LexION Capital Management believes that step back and reconfigure plans are essential when addressing a financial setback. ‘Avoid myopia by stepping back and evaluating when you should strategically prune an idea,’ she says.
3 – Focus on the future – firstly it’s necessary to turn off emotion during setbacks, suggests Fourlane President and CEO, Marjorie Adams. ‘Anytime we have a setback in business, it is easy to look for blame, feel anger, frustration or fear.’ She advises focusing on what needs to be done and move on.
Financial setbacks happen and we learn from them but it is always better to be prepared well in advance and to have a good accounting advisor on your side.
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Day by day, technology is becoming an essential part of our lives, as the way we manage our financial life, payments and banking adapts to apps and automation programs.
In a recent article in Forbes, five Forbes Finance Council members highlighted changes that will impact the finance industry over the next two years such as:
One big transformation is in banking and the change is going to be huge, anticipates Jessica Mah, CEO, co-founder and product architect of inDinero. Mah says we will see changes in the way banks behave, in the way they are becoming virtual, and in the way they are specialising and coming up with niche products.
People now want instant results. This is the idea behind Botkeeper, a company that offers automative bookkeeping and 24/7 support to its clients. Louie Balasny, its Managing Director, says ‘as the AI continues to advance, the ability to provide more and more accounting in real-time with reporting and charts at your fingertips is going to change the bookkeeping industry and the traditional monthly accounting process.’
Shops will close:
Changes in the finance industry will have a huge impact on some businesses, according to Michael Hsu, founder and CEO of DeepSky. Five or six years ago, ‘the industry pushed the idea of having every certified public accountant (CPA), enrolled agent (EA) or bookkeeper start their own outsourced accounting practice.’ In his opinion, this is not the right way. He predicts that in the next two years ‘we’ll see a ton of consolidation and shops closing.’
The number of app developers in the accounting industry may increase, according to Marjorie Adams, founder and CEO of the consulting firm Fourlane. She points out that “everyone wants their own application” and “it is becoming more affordable to build proprietary systems” for SMEs.
According to David Ehrenberg, CEO of Early Growth Financial Services, consumers will take advantage of a change in technology as long as they’re prepared. Ehrenberg believes education is important in ensuring people adapt to automation. He says “we are starting to see more automation in the lower-level accounting functions already, and that’s going to really change how everyone in the accounting services industry does business in the next few years.’
These five examples of digital disruption identified in this article are already well and truly with us, and the impact they will have on the profession will continually increase. Firms need to be careful and meet their clients’ real future needs, moving away from compliance and processing and focusing on valued added advisory services. New players can provide the processing, but the value to SME clients comes from the experience mid-tier accountants are able to add with advisory services – supporting profit development, tax minimisation, and sound strategies for wealth growth.
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A new generation is coming to challenge the market. The Millennials make up a quarter of the US population and are an increasing percentage of the workforce. Firms need to respond to the expectations of a generation that has grown up with mobile technology.
And what should accountants expect from the Millennials? Talent attraction and retention are consistently identified as one of the key challenges for accounting firms.
According to Brian Saunders, CEO of time and billing and practice management software maker, Big Time Software, in an article on Accounting Web, they will definitely demand a cloud service as a customer and even as an employee, as they see the office as “a thing and not a place”.
Millennials are more willing to quit traditional jobs to work for themselves and will probably prefer to send you a text than an email.
So, how should accounting firms deal with this new generation? There are no secrets and the more practical and easier, the better. There are a few steps you can take for this tax season to make sure your firm is well placed.
– Move to the Cloud – if you aren’t using an online practice management system, you need to start today. With it, your employees (including Millennials) can access the “office” from everywhere.
– See the Data’s Power – when your data is online and you manage it, you realise that your firm can perform much better during tax season.
– Implement communication software – to let you communicate status and resolve customer requests quickly. These kinds of systems can connect people that work together on a project and who are located in different places.
Managing these simple systems and putting them in place can make a difference to your business, transforming it into a thing, not just a place.
Source: Accounting Web
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Managing change is one of the biggest challenges for businesses as it requires a huge effort from managers and organisations to efficiently turn a transformation into a reality. When change occurs in a company, such as a merger or acquisition, there needs to be careful planning and significant resources.
So what is the best way to manage change in business?
By following these seven principles, listed on the Consultancy.uk website, you will increase the likelihood of a successful transformation:
1 – Active and visible executive sponsorship – employees need to be informed by CEOs and business executives about the project’s importance and the reasons for any changes. Senior leaders have to demonstrate with words and actions their support for the change project.
2 – Structured change management – Following a goal-oriented change management model is a good way to build up a structured management change approach. One option is to use the ADKAR methodology of change management firm, Prosci.
ADKAR represents five key steps to take to be successful: Awareness, Desire, Knowledge, Ability, and Reinforcement.
3 – Engagement with project management – change management works better when it is launched at the beginning of a project and integrated into the project activities, focusing both on the ‘technical’ and ‘people’ side of the project.
4 – Resistance management – during the changing process, people may react positively and negatively. Managing resistance to change can sometimes be tough and it is possible to minimize any resistance by involving employees in the change process.
5 – Frequent and open communication – a good communication plan is vital to support the change process. Face-to-face communication is more preferable to email, newsletter or messages.
6 – Support from middle management – middle managers can often make or break successful change. They can be the most difficult to convince of the need for change and that’s why it is vital for the change management team to get executives and middle managers on board early on in the change process.
7 – Dedicated change management resources and funding – Projects with these features are more likely to finish on schedule and to be completed on budget. External specialists can support executives to manage the change.
Managers who put these principles into practice can make the most of how to manage people during change processes and avoid problems such as low productivity and resistance. In times of necessary changes, it is essential that leaders know how to build an environment where everyone can walk in the same direction to success.
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Sustainability reports are released by companies and organisations of all types, sizes, and sectors, from all over the world. A recent survey conducted by the ASEAN CSR Network and the Centre for Governance, Institutions, and Organisations (CGIO), part of the National University of Singapore,
revealed that only 71% of the companies in Singapore practice sustainability reporting.
This percentage is significantly lower than the 100% shown by three other countries assessed – Indonesia, Malaysia and Thailand. The survey was based on the top 100 listed companies in these countries and covered corporate information from the start of 2014 to the end of 2015.
When it comes to the quality of disclosure of sustainability reports, Singapore ranks higher than its Asian counterparts with 48.8%, Indonesia at 48.4%, Malaysia at 47.7%, and Thailand showing the highest figure at 56.8%.
Over the next year, it is expected that more companies in Singapore will fall in line and will release their sustainability reporting. The Singapore Exchange (SGX) recently introduced a ‘comply or explain’ sustainability reporting initiative in an effort by the government to show its commitment to the environment.
Singapore shows us that sustainability reporting is of increasing importance in global capital markets and the actions being proposed in this country are likely to see rapid progress over the next few years. In addition, this reporting enables organisations to be more transparent about sustainability issues and to also identify its impacts, risks and opportunities in relation to its commitment to a sustainable global economy.
Source: The Accountant Online
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Accounting is an indispensable tool for entrepreneurs to manage their business. The data provided by competent accounting service will help the company to develop and increase their income. A very interesting case that illustrates this is the entrepreneur Phil Knight, who founded Nike. As Tom Taulli says in his article on Forbes, Knight worked full-time as a Certified Public Accountant (CPA) in his early career to make ends meet.
As Taulli pointed out in his article, the knowledge that Knight got from this experience was priceless. Just try to imagine how challenging it might be to manage a fast-growing company…
But what should successful entrepreneurs take into account when it comes to accounting?
To answer this question, Taulli talked to Rob Nixon, CEO and co-founder of Panalitix, who is the key speaker at “Tomorrow’s Practice” – Kreston’s 45th Annual World Conference to be held in London this month. Rob gives us three tips about what entrepreneurs need to know about accounting.
1 – The Cloud – ‘If you are relying on ‘desktop’ accounting software,” according to Rob, “you are looking at redundant data. To get real-time data you need to switch your accounting software to the cloud. You can then access richer, more accurate data on any device.’ He also mentioned some accounting systems that are affordable such as QuickBooks and Xero.
2 – Dashboard – according to Rob, ‘you need to have a consolidated view of the main operating metrics pertinent to your business. For example, if inventory is important, then make sure you track the amounts and timing of the purchases. This can be extremely helpful in avoiding problems with your cash flows. (…) Once you understand the numbers, you can set some goals and apply tactics to improve the numbers. What you can measure, you can manage.’
3 – The whole picture – you can get more from a cloud-based accounting system. Once all your data is centralized, you can connect it to other systems and get a bigger picture of your business, which is excellent. The most information you have, the better.
Identifying key performance indicators, having real-time visibility and insight on the implications for the business is vital for any entrepreneur. Using a qualified accountant that is familiar with cloud accounting and advising growing businesses will enhance this process, giving the entrepreneur the information they need in an understandable format with the added input from their experience of working with a number of businesses.
- Published in Blog
Thinking about the risks involved in business has become an essential part of an enterprise’s strategy. Risk management enables organisations to identify, assess, measure, treat, monitor and review its risks and objectives and is crucial in the current global economic environment,
The risk landscape for businesses can change rapidly and a robust process to minimise these risks, overseen by the Board is vital to an organisation so risks can be evaluated, managed and mitigated.
Is there any formula to identify enterprise risks? According to US accounting firm CBIZ, there are three questions that every Board should ask which could help assess the potential dangers to an organisation.
1. How is our organisation identifying risks across the enterprise?
Work on strategies to find out more about the risks within the enterprise – facilitate a brainstorming session with key stakeholders; conduct a SWOT Analysis (strength, weaknesses, opportunities and threats), use TI resources to scan for potential digital threats against your organisation and hire a third party to review your operations.
2. What emerging risks are we currently aware of?
Already in 2016, we have seen – cyber-related risks and attacks; rules and regulations in foreign markets; growth and volatility in the global economy; talent management and succession planning; and risks associated with third-party vendor relationships.
3. Does our existing reporting structure meet industry standards?
Risk reporting should be used to illustrate success, failure and opportunities to key stakeholders.
Companies who manage their risks are better prepared to face unfavorable economic scenarios and other difficulties and may also see benefits internally, such as the improvement of relationships between those in each part of the organisation.
- Published in Blog
When a business does not achieve its expected results, it may be time to think about implementing change. In these situations, companies evaluate the statistics, the cash flow, listen to the customers and take a closer look at everything from the day to day operation of the business to its corporate culture. It is then very common to also ask when is the right time to make any ambitious changes.
Dan Cable, Professor of Organisational Behaviour at London Business School, has written an interesting article in which he considers the ideal time to change. Cable suggests that, prior to change, the following questions should be asked:
1 – How big is the change? He believes “the basis of change is small in human behavior, rather than grand organisational changes.”
2 – How might your workforce respond? This would be difficult to predict. The labour force is now more connected, informed, educated and cynical.
3 – How will you create joined-up change? It is necessary for differing perspectives of change to be aligned to avoid confusion and to be beneficial to the organisation.
4 – How will you lead change? Change can be conducted in different ways and ideas can come from different levels within the company, from the bottom up.
5 – How will you reframe change? The word “change” is not always a good one and leaders should be able to encourage their employees to face any difficulties that may arise.
6 – Which “change stories” will you share? According to Cable, successful “change stories” in other companies are always helpful to encourage and give hope in times of change.
7 – Are people central to your change strategy? If people work today, looking for a better tomorrow, organisations certainly function better.
As you can see, a leading figure is fundamental in the change process. Before thinking about change, the ideal is that companies are in a constant process of change, rather than seeing themselves forced into a process of change. Cable speaks of change a