 |
Outsourcing
– The Consulting
Safety Net
Consulting groups at accounting firms have an inherent advantage: they thoroughly understand their clients’ current financial state, history and goals. This includes a keen awareness of how the organization is structured and what plans they have for future growth. Yet, with increased scrutiny following Enron/Arthur Anderson, how can accounting firms continue to use this enviable position to advise clients, while managing the firm’s risk at acceptable levels?
In-house consulting not only presents some risk, at times particular requests can also present challenges beyond the level experience of firm consultants. With more and more businesses seeking counsel on both sensitive issues and issues outside accounting firms’ range of expertise, outsourcing or alliances represents an appealing – a significantly less risky -- alternative.
Outsourcing to companies with the know-how to meet your clients’ specific issues, helps decrease liability and increase the likelihood of success. Moreover, outsourcing enables you to establish formal guidelines and agreements that reinforce the quality and integrity cultivated by your firm, while enabling you to maintain the lead in managing the trusted relationship.
The crux of the outsourcing solution is to separate the risk from the reward.
So, how do you best select and reap the benefits from your outsourced partner?
Due Diligence is Job #1
Be Selective. When it comes to outsourcing, only recommend "best-of-breed" firms. In other words, pick firms that have a proven record for putting clients’ needs before the firm’s. Deal with boutique and medium sized service providers that often serve up the best value for your client’s dollars, and make you look good. Check these claims with local professional associations, research prior malpractice suits, and, as the old adage goes, "get everything in writing."
Standardize Service Approach. Systems, checks and processes first! Establish written standardized approaches and guidelines for servicing firm personnel and clients, including referrals and associate relationships. Not only will this dramatically reduce the likelihood of legal exposure, it will help improve office productivity.
Create a Trusted Vendor List. Document respected and proven vendors to whom your firm will (and has had success with) refer clients. Be sure to properly address the costs and fees each firm undertakes as part of your agreement, eliminating questions and later issues. This doesn’t eliminate the need for re-evaluation and due diligence, but it makes the process more consistent and reliable.
Stay Involved. Get copies of the vendor’s standard engagement letters before referring clients, and work with the clients you refer on explaining the nature of the service relationship as detailed in the vendor’s agreement. Clients will feel good from the get-go with the referrals you make and lead them through.
Help Make Good Companies Great
Finally, consider client advocates rather than single source vendors or intermediaries. Accounting firms and many other professional services firms today outsource to credible advocates, rather than intermediaries or single source vendors, as the solution to helping their clients with complex or specialized issues.
A client advocate is generally a reputable, well-established and experienced company which has access to a deep network of industry contacts. But, it’s how they use such resources that distinguish their services.
For example, when it comes to debt funding, advocates traditionally go beyond making introductions to a series of lenders the way brokers and intermediaries would. Nor do they try to fit a client’s financial needs into one lender’s guidelines the way single source lenders must. Rather, an advocate increases the likelihood of approval by focusing on individual circumstances and relying on experience, know-how and their credibility within their market.
At Primagency, we use a pre-proposal due diligence process to target the right lenders for every deal. Our independence and extensive experience enables us to structure a credit package that can increase the likelihood of obtaining financing to meet the client’s needs and ensure the lowest cost of funds on a transaction.
In an environment where lenders turn down over 90% of all debt financing requests made by middle market companies, specialized, individual counsel and preparation and an expansive network can dramatically increase the likelihood of approval.
Process is the Key
While outsourcing, more often than not, provides a win-win for your firm and your clients, remember to look before you leap. No matter the past experience, reputation or relationship involved, proper research should be done and management controls must be in place before any outsourced solution – or referral – is offered. There’s no substitute for due diligence and clear, concise, concrete agreements and guidelines. Done properly, outsourcing can provide firms with the best of all worlds – better client service, enhanced revenue to the firm, and separation of risk from reward.