Introduction
Sopher & Co is a tax consulting company located in the United Kingdom. It offers a range of services in business services, audit and accounting, corporate finance, tax investigations, and tax planning (“Tax Consultants London” par 1). After studying the company and the related industry, this paper will report on the commercial assessment of the firm. This report will incorporate a critical appraisal of the company’s professional and business setting and the points of strength in the industry. The paper will also present a critical analysis of the company’s strengths and weaknesses and a comprehensive set of recommendations to the management.
Business and professional setting
It should be mentioned that the business setting of Sopher & Co is the field of financial planning and accounts consulting. From the management accounts perspective, the professional setting that the company operates in demands its commitment and diligence in service delivery. Moreover, the accounting and auditing professional standards require that the company should be well-coordinated in terms of interior communication, operations, and customer service. From the accounting profession’s point of view, it is established that the company offers client-based services in tax consulting and financial planning.
The company’s services also encompass comprehensive business advisory and consulting services in business growth and strategic planning. In addition to the services mentioned above, tax advisory and tax investigations are included in the firm’s competence allowing it to encompass a wide range of solutions such as tax disclosure reports and business tax cases. Throughout the appraisal, it is established that the services of the company are well implemented as per the business and professional setting. Also, it is found out that the company’s personnel are widely observant of the professional requirements and standards that their jobs are attached to. This is the reason why the company provides quality financial planning, accounting, and consulting services.
Functional and departmental relationships
The company’s organizational structure is based on the services that the consulting firm offers. With the consulting services ranging differently in terms of departments and customer needs, communication and organizational relationships are constant factors in the operations of the company. Functional and departmental lines are the main lines of relationships. It can be viewed that the relationships within the company’s organizational structure are dominated by the functional lines. However, it is considered that the two lines are highly interdependent when it relates to communication, sharing of resources, and responding to clients’ concerns.
Despite having well-defined organizational relationships along with departmental and functional lines, it is estimated that there are serious communication inefficiencies within the firm which lacks enough communication between the departments that should be operating in unison by sharing information among them. In addition, It is found out that different departments which should work in conjunction with each other are seeking for the same information from one department. Some of these departments identified are tax department, Payroll department, VAT section, management accounts department as well as accounts and audit department (“Tax Consultants London” par. 1). From the point of view of the management accounts department, the communication processes are deficient of clarity and completeness.
Taking the management accounts department as the point of reference in the appraisal, it is clarified that the communication processes from other departments are scanty. In particular, the department is also inefficient in passing information to other departments. In terms of coordination and relationships within the organization, it can be stated that working relationships are poor speaking about the reference department. This inefficiency is coupled with a low level of motivation showed by employees to share working details with others in the same or different departments.
Theoretical knowledge appraisal
The reference subject of knowledge is management accounts on which department the appraisal of the company is based. Considering the costing aspect of management accounts, it can be stated that Sopher & Co does not clearly identify its main cost drivers which affects it costing processes due to the lack of specific anticipation of expenses and cost implications. On an operational basis, the costs of the company’s activities are incorporated on the departmental basis instead of on the basis of the cost drivers that cause the expenditure. It is caused by the fact that the firm has adopted the client-based organizational structure in its costing method.
In terms of the billing clients, the firm’s costing and invoicing mechanisms are inefficient. Particularly, it is found out that there are frequent cases of late billings which should not be experienced as per the theoretical principles of financial and management accounting. Concerning the timing question, some clients are billed once a year which should not be the case under the principles of accounting. This shows the main consequences of inefficient departmental organization which shows how inefficient the firm’s management accounts department and auditing sections are in communication.
Selling points of the firm
The first selling point of Sopher & Co is the skilled personnel who are well qualified up to the professional standards. The firm prides itself on the personal service level in its professional services offered to the clients (“Our People” par. 1). It should be mentioned that the company is thorough in terms of service delivery especially in tax consulting and auditing. This can be credited to the employees’ commitment to prudence and observance of personal and professional standards. The organizational selling point of the firm is its valuable networking skills that have been nurtured over time since its foundation over thirty years ago (“Our People” par. 3). Led by the founder and the chairman Ivan Sopher, the firm has built a strong long-term relationship with its clients, colleagues and partners.
The second selling point of the company is the extensive organizational network created between the firm and the industry players. This has been established by the firm through its team of leadership. For instance, with the help of the founder Ivan Sopher, the Sopher & Co company has established contacts and networks in the industry which resulted in the fact that the firm won the accountancy team of the year 2013 and also won the 2012 to 2013 state private client award. It is also established that the two of the top leadership representatives of Sopher & Co, namely, Daniel Sopher and Richard Pulley are recommended for the 2013 city wealth leaders list (“Our People” par. 1-3). No doubt, these awards and leadership recommendations are great selling points to the firm.
Selling points of the firm’s products
The main selling point of the industry is the existence of strong professional standards that guide accountants and auditors. With the help of these standards, the industry has ensured uniformity of the services offered by all finance officers, auditors and tax experts worldwide. Apart from the global professional standards, the United Kingdom also has professional regulations to guide the industry in the country. Accountants and auditors are guided by the Association of Authorized Public Accountants (“AAPA” par. 2). Management accountants in the industry follow the rules established by professional standards of the Chartered Institute of Management Accountants (“AAPA” par. 3). These bodies among many others provide the needed professional guidelines to make services of finance, accounting and auditing firms excel in their work.
It is clarified that the industry’s selling points cannot triple down to benefit Sopher & Co unless the it takes measures to get advantage of the industry’s strength. To gain such advantage, the firm has set comprehensive hiring guidelines that will ensure that only the certified candidates, partners and associates will be engaged in offering services to clients. One should keep in mind that professional certification and professional membership are among the requirements that new partners must meet to be hired by the firm’s board. The competence of the board is also attributable to the membership to various professional bodies and leadership institutions such as the 2013 city wealth leaders’ list.
Structure of the company
It clearly appears that the organizational structure of Sopher & Co is based on the functionalities that the company offers. Hence, the firm has adopted a customer-based departmentalization structure as its organizational framework. It is led by the chairman Ivan Sopher at the highest level of management and decision making. The second rank of management is the departmental heads in charge of the departments which include tax department, Payroll department, VAT section, management accounts as well as accounts and audit departments. They are differentiated by the services they offer to the clients.
The main reason why the firm has adopted this type of structure is to enhance faster decision making process concerning the customer service. To ensure customer satisfaction, the firm has differentiated its staff according to their professional qualification and competence in the departments they fit. For instance, the management accountants are in the management accounts section while auditors are in the auditing section. One may notice that employees with certain skills are placed strategically in each department that fits their customer-focused professional service.
Risks and challenges
From an external environmental appraisal perspective, the firm is facing the challenge of competition in the country regarding the field of tax and financial consulting. It is found out that the country is facing an increase in the number of consulting firms that are venturing into the industry. This poses a strategic challenge of existing as a market leader in an industry where advertising and intense promotional programs are not recommended. Sopher & Co faces the risk of losing many clients to the existing and new firms that are setting up in the country.
From an internal environmental appraisal perspective, Sopher & Co is operating at a risk of losing the current clients due to poor interdepartmental coordination. The firm has an inefficient communication process within its departmental relationships. It can be clearly viewed that the communication between departments is affecting the firm’s competitive ability to serve clients. This is evident in the way clients are billed and time taken to solve the challenge. Through such inefficiency, the firm’s current clients base can be reduced considerably (Robbins and Judge 512). Sopher & Co also risks losing competitive image that will result in poor competitive advantage in gaining new clients.
Recommendations
It is observed that the main problem within the firm is its poor communication channels. With the customer-based organization structure, Sopher & Co has no clear communication tools among the departments. Sharing of information within the company is weakly done against the expectations of the management and the staff. This communication lapse is so pronounced that the same information can be requested by different departments from the same source department.
Impact on the current situation
The immediate impact of the poor communication channels is poor coordination of activities within the firm. The problem also leads to inefficiently executed projects and strategies of Sopher & Co in its quest to promote customer service. Due to defective coordination of departments, the firm can face risks of losing credibility in terms of performance of duties and service delivery to its customers. Additionally, the situation may lead to employee turnover due to the lack of motivation associated with an efficient workplace.
Recommendation for improvement
It is highly recommended that the management should overhaul the current communication channels and tools. It should also introduce new management communication methods such as instant messaging, interlinked electronic messaging, emails, and improve on the current methods. Moreover, Sopher & Co should also revise the current client billing guidelines and introduce new directives that guide communication with its clients.
Conclusion
From the appraisal of Sopher & Co, it is evident that the top management is leading the firm in the right organizational and professional setting. The company’s business and professional setting are also consistent with professional standards, organizational guidelines, and theoretical knowledge of the industry. The firm enjoys skilled personnel as the key selling point in addition to professional guidelines provided by the industry. However, Sopher & Co has inefficient communication channels and deficient client billing guidelines. These inefficiencies can lead to the fact that the company loses its positive corporate image and clients’ preference. It is therefore recommended that Sopher & Co should adopt new communication channels and billing guidelines to control the situation.
Works Cited
“AAPA.” Global Body for Professional Accountants. n.d. Web.
“Our People.” Tax Consultants London. n.d. Web.
Robbins, Stephen T., and Judge, Timothy A., and Elham S. Hasham. Organizational behavior. Harlow: Pearson Education Inc. 2007. Print.
“Sopher Co: Specialist Accountants & Tax Consultants In London, UK.” Tax Consultants London. n.d. Web.