If a partner asked today whether the firm can afford another fee earner, would your accountant answer before year end?
Firms that see WIP, utilisation and drawings monthly make the hire while the numbers still matter. Firms waiting on the year-end file learn the answer after the decision has made itself. Ardein runs the finance function and reports on the same date every month.
Three things you’d know before the next partner meeting
Sign off the hire with the fee cover in front of you
Utilisation and committed work in progress are updated monthly, so recruitment is decided on this month’s figures.
Know which clients and services actually carry the margin
Income and time are coded by client and service line, so recovery stops being a feeling.
Set partner drawings without hoping the tax is covered
Corporation tax and personal liabilities are visible months ahead, alongside the cash that is genuinely spare.
Three decisions that cost a firm money before anyone saw the figure
Each of these happened in a firm that had an accountant and a clean set of accounts.
- Hire
“We took on two more consultants in spring. By autumn I realised the work they were doing had been billed at a rate that never covered them.”
The rate card had not moved in three years while salaries had. Nobody had recovery by grade in front of them at the point of hiring.
- Price
“I put the fees up across every client at once, because I had no idea which ones were the unprofitable ones.”
Two good clients left over a rise they never needed. Margin by client sat in the time records and in no report.
- Contract
“We agreed a fixed fee for a twelve month project and only found out at the end how much time went into it.”
The overrun came out of partner drawings. Work in progress was never compared with the fee until the file closed.
- Day 90
What it looks like when the answer is in the room
By day ninety one report lands on the same date each month. It shows work in progress by client, recovery by service, debtors by age and the tax building behind the drawings. The hire takes an afternoon, because the fee cover is already on the page. When a partner asks whether the fixed fee was worth taking, the figure is there before the meeting starts.
A year-end accountant, or a finance function that reports monthly: which one answers on Tuesday?
Both do proper work; only one of them is in the room on the day you decide.
A good year-end accountant
Files the accounts and the corporation tax accurately, and keeps Companies House and HMRC satisfied.
Knows the firm, answers the phone, and will sort out a problem once you raise it.
Works from a file that closes months after the year it describes.
Can tell you what last year’s profit, utilisation and drawings were, once the file is finished.
A finance function that reports monthly
Tells you what work in progress, debtors and cash look like on the agreed date each month.
Puts recovery by client and by service in front of you while the work is still live.
Shows the tax liability building up, so drawings are set against what is genuinely spare.
Answers the hire, the price rise and the fixed fee question on the day you ask it.
Eight questions that show whether your numbers are earning their keep
Answer each one from memory; the ones you cannot answer are the decisions you are making blind.
- 01
Could you say today which client relationships made money last quarter?
If it takes a time export and an evening, the number is not working for you.
- 02
Do you know how much unbilled work in progress the firm is carrying right now?
Unbilled time is cash you have already paid salaries for.
- 03
Can you see recovery by fee earner without asking someone to build a report?
Recovery decides hiring and pricing, so it belongs in the monthly pack.
- 04
Do you know what the firm can draw this month with the tax set aside?
Drawings taken against money owed to HMRC turn up later as a cash problem.
- 05
When a fixed fee overruns, do you find out while the work is still live?
Finding out at the close of the file means the fee was never negotiable.
- 06
Could you price next year’s engagement letters from evidence rather than last year’s rate plus a bit?
Evidence means hours actually recorded against fees actually billed.
- 07
Do you know which invoices passed sixty days old, today?
Aged debtors reviewed monthly are collected; reviewed annually they are written off.
- 08
Would another salary at market rate still leave the firm covered?
That is a cash and utilisation question, and both figures should already exist.
Ask your accountant three questions this week about work in progress, recovery and drawings, and if the answer is that they will look at it after the year end, you have the wrong accountant
- 01Could they tell you today how much unbilled work in progress is sitting on the ledger?
- 02Could they tell you which service line recovered its time last quarter?
- 03Could they tell you what the firm can draw this month without touching the tax money?
Three yeses and you’re fine. Anything else is what the review is for.
Entry 01
What changes when the figures arrive on the same date every month?
One promise: reports delivered on the agreed date, provided the information has reached us.
Figures as recorded in client work · names withheld
“”UK SME owner
Ninety days from your current records to an answer that waits for no one
Four markers, each one measured by what you can decide at the end of it.
You know what your records will and will not answer
We agree scope, complete client and anti-money-laundering checks, and collect the records. If there is an existing accountant or bookkeeper, we manage the handover.
Work in progress and debtors stop being estimates
Bookkeeping is complete, banks reconciled, client and supplier balances sensible. You can see what is billed, what is not, and who owes you.
The recovery question gets answered inside the month
Billing, credit control, payroll and reporting run to set dates. Time and income are coded so margin by client and service is readable.
A partner decision takes an afternoon again
Management information arrives on the agreed date with the reasoning attached, in time to change the hire, the fee or the drawings.
What the monthly arrangement covers, and what it changes on the day
One scope, agreed after we have seen the records and understood how the firm bills.
Management information you can hire and price from
Cash, debtors, work in progress and recovery reported on the agreed date, with the reasoning attached.
Year end becomes a confirmation of what you already saw
Bookkeeping, VAT, payroll and auto-enrolment, accounts, corporation tax and director self assessment on one timetable.
A finance lead for the decisions partners argue about
Pricing, drawings policy, funding and hiring, from someone inside the numbers rather than reading them later.
Who this does not suit, and why we say so before you spend anything
We do not take on cash businesses, whatever the sector.
We do not take on construction work that runs on CIS.
We walk away from anything non-compliant or reportable, and from clients who will not complete anti-money-laundering checks.
It does not work when an owner cannot explain their own firm or say what they actually need.
If you are unsure which side of that line you sit on, the review is where it gets settled.
The questions partners ask before they start
Is the review a sales call?
No. It is a working session on how the firm bills, records time and pays its partners, and you leave with the five priorities and an indicative monthly structure. It carries a fixed review fee, credited in full against onboarding.
We already have an accountant. Why would we do this?
Most of our clients did. The year-end work was fine; there was simply nothing between January and the file arriving. The review looks at what you could not answer this month, not at what your accountant filed last year.
What happens with our current accountant?
Ardein handles it. We write for professional clearance, collect the records, agree a transition plan around your year end and tell you what we still need. There is no separate charge for the handover.
How long are we committing to?
The fee is monthly and scoped to the work, agreed once we have seen the records. Capacity is capped at four new clients a month, so we start when there is room to do it properly.
Do we have to move to Xero?
Only if the current system is hiding something. Where we do convert, the chart of accounts is rebuilt so income and time read by client and service line.
Make the next partner decision with the number already in the room
Start with the review: sixty minutes on how the firm bills, records time and pays its partners, then the five things to fix first. It carries a fixed review fee, credited in full against onboarding.