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Smart practice adds up

TAKING a corporate approach to running an accounting practice is paying off for one WA firm.

The partners at McKessar Tieleman have greatly improved their billing ability after hiring law firm Minter Ellison assistant practice manager Diedre Reilly to run the practice.

Partners in accounting firms often find they spend more than 50 per cent of their time on administration.

McKessar Tielman partner Brenton Siviour said hiring a practice manager freed the firm’s partners to work on the practice as employees and drive it from a management point of view as directors.

“We’ve turned our practice into a business,” Mr Siviour said.

“If you pay a practice manager – who usually earns a lot less than a partner – the partners can bill up to 70 per cent or 80 per cent of their time,” Mr Siviour said.

“With a partner billing $200 an hour that can add up. They can focus back on their clients and away from the administration side of the business.”

Mr Siviour said the partners were driving the practice to build its value.

“To do that we had to separate the running of the practice from the management of the practice,” he said.

By doing that, it makes the firm a very difficult target for consolidators – something Mr Siviour says is not immediately on the cards for McKessar Tielman.

“But at the end of the day, if someone came up to us and offered a lot for the firm, we’d probably take it,” he said.

Ironically the firm has been in-volved with consolidations in the medical and property management industry.

“We know the business models that have to be used,” Mr Siviour said.

“There is a different model for each sector.

“One of the things accounting firm consolidators espouse is the benefits they can bring to a firm’s back office systems. But there are no efficiencies to be gained from a back office consolidation.

“The real efficiencies in accounting consolidations comes from the information technology side. There can be efficiency gains of up to 25 per cent from driving the IT side. The buzzword is knowledge management.”

The firm’s specialities are forensic accounting, tax consulting, corporate advisory and business development. The latter is aimed at the small to medium-sized enterprise market.

Mr Siviour said SMEs were traditionally bad at managing what they could measure.

“Most don’t focus on numbers such as key performance indicators. They instead focus on top-line revenue,” he said.

“When you start focussing on things like KPIs you usually have a 10 per cent jump in profits. You find they start working on the business and not in the business.”

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