From ‘Dull’ and ‘Commoditized’ to an ‘International Star’
Reprinted with permission from Accounting Today.
It’s official. Client accounting services (CAS) has come into its own. This once ho-hum commodity has evolved into a promising service line with solid value for clients and strong upside potential for accounting firms.
One of the most accomplished practitioners in this space is Ian McBane, partner in the Business Support & Outsourcing team at Moore Stephens, the London-based global accountancy and advisory network. In just over five years, Ian and his team have grown an impressive CAS practice with clients from across the UK and the world.
The case for client account services was articulated persuasively by tech consultant and author Geoffrey Moore. His groundbreaking research led Moore to conclude several years ago that, “…in the past, major barriers to productivity made (client) accounting services a low-margin activity that was unattractive to pursue.” Today, the cloud and other digital tools have knocked down those barriers. And much as Moore anticipated, CAS has become a “high-growth, high-profitability line of business.”
Back-office takes center stage
About five years ago Ian, the partner in charge of the Moore Stephens London Business Support & Outsourcing (BSO) group, launched an initiative to provide back-office solutions for businesses within the UK. He initially targeted legacy clients of the firm, chiefly those in the mid-market range. Ian determined that about 10 staff members were already doing client services work, and convinced his managing partner that these individuals could become a cohesive, specialized team.
He analyzed available resources including skills, expertise and software and aligned them with three targeted market segments: real estate, technology and financial services. Next steps included creating a five-year strategic plan and standardized best practices to ensure consistency across clients, industries and countries.
The team’s mission was to deliver cloud-based, streamlined services in keeping with market conditions and the needs of buyer groups. In some cases staff members were embedded at client sites. Early adopters of the service included a number of inbound US and European companies seeking to establish operations in the UK, and a marquee London real estate development business that, while successful, lacked the sophisticated processes and systems it needed for sustained growth.
Before long the BSO group was regularly winning outbound engagements from clients across the continent, including many with no previous ties to Moore Stephens. To meet the needs of those clients, the 10-member BSO team has grown five-fold, providing not only back office services and payroll reporting, but turnkey outsourced accounting for large global companies and their European subsidiaries. Services have expanded to include business intelligence, analytics, dashboards and key performance indicators, as well as HR and financial compliance.
According to Ian the cloud has changed everything, literally altering the shape of the service itself. Clients have easy-access to documents and reports, and communication between the firm and the client is two-way and 24/7.
Not 10 years into the initiative, Moore Stephens’ international outsourcing department has won business in over 30 countries, providing accounting, management reporting, payroll and advisory services for companies doing business in the global marketplace, even those with a very small footprint.
An example is a European firm that seeks to establish a presence in Zambia, with just one staff member on site. Moore Stephens can provide turnkey accounting, payroll, audit, tax, and other services for the new subsidiary, as well as business intelligence and compliance with local regulations. Ian describes the deliverables as integrated CFO services that permit a client company to avoid expending significant resources on local financial service providers.
It’s a small world after all
Timely technology, a strategic vision and focused execution helped Ian McBane turn a good idea into a $15 million practice. For Moore Stephens’ Business Support & Outsourcing Group, the cloud serves not only as an efficient, borderless data warehouse, but also as a digital engine fueling international outsourced solutions at business locations across the world.
Thought leader Geoffrey Moore had it right when he predicted that a web-based client account services practice would allow “CPA firms to move away from ‘write-up,’ transactional work and give clients what they most need—high value, forward-looking business analysis from a trusted advisor.”