staying competitive whilst maxim is ing income by johnny webb
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8/3/2019 Staying Competitive Whilst Maxim is Ing Income by Johnny Webb
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STAYING COMPETITIVE WHILST MAXIMISING INCOMEJohnny Webb & James Woods
November 2009
Copyright © May 12 BDO. All rights reserved.
8/3/2019 Staying Competitive Whilst Maxim is Ing Income by Johnny Webb
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Page 2
KEY OBJECTIVE TODAY –
STAYING COMPETITIVE (IN A DIFFICULT ENVIRONMENT)
1. Operations and Finances (Internal Focus)
2. Client Care (External Focus)
8/3/2019 Staying Competitive Whilst Maxim is Ing Income by Johnny Webb
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MY BACKGROUND
• University of Manchester Institute of Science of Technology – BSc Management Sciences 1988 -1991
• Goldblatt McGuigan 1991 – 1996
• BDO 1996 – to date
• Current Role (External)
- Head of Forensic Accounting, Transactional Support and Corporate Finance in BDO Belfast
- Honorary Treasurer and Main Committee Member – Chartered Accountants Ulster Society
• Internal
- Member of BDO Finance Committee
- Member of BDO HR Committee
- Member of BDO Risk Committee
- Past Member of BDO Marketing Committee
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8/3/2019 Staying Competitive Whilst Maxim is Ing Income by Johnny Webb
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TEAM OF c.135
Partners 12
Directors 12
Managers 39
Seniors 14
Trainees 42
Support Staff 16
Total 135
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INTERNAL STRUCTURE OVERVIEW
Partners (12)
MarketingCommittee
RiskCommittee
FinanceCommittee
TeamSub-Group
TeamSub-Group
TeamSub-Group
Internal ResourceGroup
FinanceDirector
RiskManager
HR Committee
HR Manager
8/3/2019 Staying Competitive Whilst Maxim is Ing Income by Johnny Webb
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OPERATIONS AND FINANCES
• Key Objective
- “Fees and Cash”
8/3/2019 Staying Competitive Whilst Maxim is Ing Income by Johnny Webb
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IMPORTANCE OF TERMS OF ENGAGEMENT
• Scope of Engagement – more importantly, highlight what is not included
• Duty of Care – who is placing reliance
• Liability Cap – now more focus
• Fees and Disbursements – clarity is important
• Abort scenarios
• “Your Continuing Instructions”
8/3/2019 Staying Competitive Whilst Maxim is Ing Income by Johnny Webb
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NOW THAT THE WORK IS FINISHED: -
PRACTICAL IDEAS ON CASH FLOW MANAGEMENT
1. Tight Terms of Engagements
2. Consider Monthly Billings/Intra Month Billings
3. Frequent Communication
4. Professional Fees Finance Schemes (eg BoI)
5. Settlement Discounts
6. Formal Routes …
8/3/2019 Staying Competitive Whilst Maxim is Ing Income by Johnny Webb
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WORKING CAPITAL AND LIQUIDITY
Working Capital is the amount of money a practice has tied up in funding its day to dayoperations – directly impacting its banking position.
• Working Capital – WIP + debtors – creditors
• Working Capital Ratio - (WIP + debtors - creditors) ÷ fees
• For Practices, as creditors normally relatively small → “Lockup” (WIP & Debtors)
Other ratios -
• Debtors Days - (debtors ÷ fees) x 365
• Creditors Days - (creditors ÷ overheads [exc. wages]) x 365
8/3/2019 Staying Competitive Whilst Maxim is Ing Income by Johnny Webb
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LIQUIDITY
Liquidity is the ratio of free cash flow in a practice and the level that thisservices interest commitments
• Interest Cover
- Free cash flow/interest
• Free Cash Flow
- EBITDA less working capital, less tax, less capital expenditure
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8/3/2019 Staying Competitive Whilst Maxim is Ing Income by Johnny Webb
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CLIENT CARE IN BDO….
BDO’s Client Care Programme focuses on the following:
• Talking to our clients and developing deeper relationships thus giving us commercialinsight and broadened knowledge of the client.
• Increasing service through client understanding – by pre-empting discussion with
colleagues from other service streams
• Stimulating an innovative culture – bespoke solutions
• Identifying growing clients and aligning resources towards them
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CLIENT CARE IN BDO….
What do we do?:
• Key Account Management Programme
• Client Listening Programme
• Regular client meetings and contact
• High Partner to staff ratio with clear lines of communication to Partners
• Regular networking events, tailored to the client
• Regular and targeted Direct Marketing activities eg eNewsletters, flyers
• CPD Courses
• The Database …..
• Network of referrers
• Friday afternoons
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BENEFITS TO THE CLIENT
Providing a tailored service - that will pre-empt the issues they are facing
Giving access to an aligned team - one that will have a clear oversight of their business
and the issues it faces
Offering a proactive service offering - solutions will be taken to them rather than them
having to ask for input
Giving more creative solutions - we will deliver creative business solutions bespoke to
them rather than selling a ‘product’
Providing assistance in developing sector knowledge - the delivery of pooled sector
knowledge that will benefit them commercially
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8/3/2019 Staying Competitive Whilst Maxim is Ing Income by Johnny Webb
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BENEFITS OF A CLIENT CARE PROGRAMME
Feedback we have received from clients on our approach:
“I think from a client relationship point of view, I have experienced better service and quicker responses from BDO, meaning there has been little delay in receiving responseswhen I requested feedback”
“It is their client relationship - the fact that they know our business very well and they have excellent staff continuity”
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BENEFITS INTERNALLY….
• Staff become more involved and engaged in clients’ business
• More interesting work - innovation and creativity
• Increases the chances of identifying business opportunities with clients
• Develops depth of knowledge of the sector – allowing staff to become more involved in
more complex and strategic issues
• Greater chance of winning more profitable work
• Move from being service provider to being trusted business adviser
• Client more likely to recommend you to others