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Credit where it's due

Comment

No-one who has ever been involved in the running of a small to medium sized consultant will be truly surprised by the problems that their much bigger cousin Atkins has been facing lately.

Keeping track of the money has always been the Achilles' heel of smaller scale consultancy management - especially one made up from founding partners. Having enough self belief and confidence to leave secure employment and set up a new practice does not necessarily imply an adequate appreciation of the need for competent financial management. Most founding partners, in fact, seem to be motivated more by the desire for autonomy and professional independence than by the prospect of future riches, and chose their fellow partners and new employees for their professional abilities rather than their management skills.

Many such practices survive, of course. But an informed observer might conclude that most do so because of a major and generally unacknowledged contribution from the senior partner's secretary.

Usually loyal and discreet, it is only when she (and it is usually a she) retires that the truth slowly becomes evident - that it has been she who has for years been the firm's de facto financial director, the only one with any idea at all who owes how much to who at any given moment, the only one prepared to hassle debtors for payment or think up convincing reasons for putting off creditors. The partners meantime have enjoyed the luxury of being able to concentrate all their energies on cultivating clients and/or sitting at a drawing board. When reality eventually intrudes, the reaction is usually the same.

Denial. Followed by fumbling attempts to either a) persuade one of the younger partners to take over financial responsibilities or b) lure the aforementioned secretary back to work at a much more realistic salary.

Sometimes this works, sometimes denial is so absolute that the only future for the practice is absorption by some large, better managed organisation.

Plan c has a better success rate.

This involves employing some senior financial manager from outside, who, after throwing up his/her hands in unfeigned horror, will introduce a generally unwelcome and grudgingly accepted financial regime which will eventually get the practice through to smoother waters.

Sometimes this is effectively the end of the excitement. The practice bumbles on, finding its niche in the world, making a modest profit, growing organically, spinning off yet more infant consultancies.

However, when luck and judgement combine to develop the practice into a major undertaking the whole nature of the practice is liable to undergo sudden change.

Limited liability status is adopted. Higher margins are sought in non-traditional sectors. And somewhere along the line someone will suggest a massive increase in the use of computers for financial management.

Computers have been such a boon to designers that they can be forgiven for believing they will be just as helpful in the accounts department. History, however, suggests the opposite.

The moral is: if your PA is really running the practice, look after her properly. Some people really are irreplaceable.

Dave Parker is NCE's technical editor

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