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CIBA Advisory Firms Strategic Alliances widens the scope of CIBA firms to support a wide range of clients in all types of industries. These Strategic Alliances do not create a new entity and all parties remain independent, however formal lines of communication, contact persons, and staff resources are allocated to support allied firms operating within the Strategic Alliances.
These Alliances do not practice the profession of public accountancy or provide audit, tax, consulting or other professional services of any type to third parties. This is because the allied firms operating within the Strategic Alliances are independent. The Alliances do not constitute a joint venture, partnership or network between participating firms and because the Alliance firms are independent, services or the quality of services provided are not guaranteed.
Bringing in new clients is a top priority for accounting firms. However you may not have the resources to support a new client and as a result may not accept the new appointment. Similarly a client may ask for a service that your firm cannot provide due to resources contratins, lack of expertise in that area, or a statutory prohibition such as with audits.
Strategic alliances offer a solution to this problem as they offer you with the ability to provide a wide range of services to your clients.
They are also a source of cross‐referrals. They provide a place to turn when you cannot accommodate a service because it is too small, too big, or too specialized.
For all firms, alliances are a way to leverage your existing client base, expand through controlled growth, and provide ways to provide additional services to help your clients. Your firm can grow in size, quality, and profitability, while staying focused on what you do best. Alliances are simply another path to marketing, management, and profitability for your firm.
The CIBA Strategic Alliance innitiative offers members access to specialised services with CIBA overseeing the B2B relationship created between a large audit and advisory practice (LP) and CIBA Small and Medium Practices (SMP).
Typical alliance structures:
A strategic alliance* can be described as the cooperative efforts of unrelated firms working together to provide a wide range of products and services to a diverse client base.
Strategic alliances should not be confused with accounting associations. Firms in these associations will typically share ideas and resources on issues of practice management and may work in joint venture on specific engagements. They provide members with a strong support system that can help firms compete. They are peer‐to‐peer groups, usually requiring minimum size and service requirements for entry, with members strategically recruited in various geographic regions.
The steps to participate in the CIBA Strategic Alliance are as follows:
The first step in establishing a strategic alliance is to develop a solid understanding of your firm statistics and your client demographics. Basic demographic information is essential to any long‐term plan for establishing a strategic alliance. Always be prepared when discussing your firm, especially with a larger firm. They know their statistics and will ask you yours.
The SAAA Management of an Accounting Practice Survey (MAP Survey) is a great place to start.
Now that you have become acquainted with the statistical side of your firm, the time for self‐examination is here. You will need to perform a SWOT analysis of your firm, meaning that you should look at the firm’s strengths, weaknesses, opportunities, and threats. The formation of any long‐term plan requires buy‐in from all parties. Involve everyone in the process from partners to administrative staff. Whether you are a sole owner or a partner in a firm, it is critical to know where you are going.
Only through self‐examination can you decide where you are and where you would like to be.
Be honest with yourself. Write down your short‐ and long‐term plans. Start a dialog, and make a decision to change.
The CIBA Guide on Creating a One Page Strategic Plan can help.
Once you’ve analyzed your firm and defined your goals and objectives, you are now prepared to begin the process of forming strategic alliances to fulfill your goals with a plan in mind.
An alliance without a plan is just a work‐sharing arrangement that will not benefit both parties involved. If both parties to an alliance do not recognize a benefit, the alliance will fail.
Your choice of strategic partners is critical. How do you begin to seek out firms that you can associate with on a long‐term basis?
One of the best ways is to get involved. Several suggestions for developing your peer network by getting involved were provided earlier. Typically, firms that are actively involved are forward thinkers who may be open to just such an arrangement. You may already be acquainted with these firms and simply need to start a dialog.
You can impose many criteria in determining which firm will provide the best match for you and your clients. Issues such as billing rates, location, experience, and range of services are all important.
Nothing, however, is more important than the firm’s philosophy and culture.
Every practitioner has a personal style that his or her clients are comfortable with. That is why they are your clients. If you are going to directly or indirectly expose your clients (your largest asset) to another CPA firm, you need to be sure they will service your client with the same care and temperament as you. Spend lots of time with the partners and key staff of any firm with whom you choose to form a long‐term alliance.
What is their firm philosophy? Are they quality people? Do you trust them to be professional with your clients? Will they respect your firm and work collaboratively?
Think of yourself as the end client and screen them as you would any other professional. Make sure that its goals in forming the alliance are in sync with yours.
CIBA has take some of the above initiatives and identified Mazars as a firm that will respect the CIBA-SMP relationship as well as the SMP-Client relationship. It reamins your choice if you want to work with the CIBA Strategic Alliance.
You have to consider if the CIBA Strategic Alliance will be able to achieve your goals and objectives, If this is your choise then sign a letter of understanding between CIBA, the LP, and your firm.
We recommend that you start small. Bring an Advisory Firm in on a special project or perhaps just on a single tax issue. This will establish a tone for how future engagements will evolve. The best of marriages begin with a courtship.
If you are attempting to facilitate an upstream alliance, your goal should be to leverage the assets of the larger firm to yours and your client’s best advantage. The ideal relationship treats the firms as if they were satellite offices of one another, each having access to the other’s resources. None of this is accomplished without very well‐defined objectives and open lines of communication.
The first step is to identify the strengths and services available through your upstream partner.
Meet with the senior partners and have them provide you with an overview of their firm’s departments and a list of their specialties. Meet with the partner or accountant in charge of the department or services that you foresee implementing for your client base. Make sure they understand your firm and how you can help them.
Downstream alliances are very helpful if the job at hand is too small or price‐sensitive for a larger firm or the larger firms requires a niche service.
As with any professional arrangement, care should be taken to ensure a clear understanding of the terms, and their effects on both firms and especially the client.
Three issues need to be clarified upfront:
You may consider a formal strategic alliance agreement, but as the relationship evolves over time, it will be difficult to identify all the possible scenarios. There should, however, be a letter of understanding highlighting the spirit of the agreement.
Issues to cover include the following:
There are several types of structures used to establish strategic alliances including special projects and engagements, joint ventures, and “just‐in‐time” consulting.
In this type of arrangement, you contract with your affiliated firm to conduct a particular service directly for your client. This could be business valuation, investment consultation, personal financial plan, cost accounting study, or any other type of freestanding service. In this arrangement, separate engagement letters are issued and typically the allied firm bills the client directly for the service. Your firm’s job is to coordinate the scope of the service and monitor the engagement on behalf of your client.
In this kind of arrangement you are working with your allied firm by dividing the scope of work into specific pieces. For example, if your firm doesn’t perform audits, you could subcontract the audit portion of the engagement to an allied firm. They would have separate engagement letters with the client and render their own invoices.
One of the strongest advantages to a smaller firm in an alliance is the ability, on a specific basis, to “rent” rather than “own” expertise needed. Just‐in‐time consulting allows you to use the resources of your allied firm as if they were yours. This arrangement is most applicable for specific tax or accounting questions that arise as part of your regular engagement. Invoicing in these matters is generally directly between the firms. In effect, you become the client. Costs can simply be passed on to the client invisibly. In many cases, the allied firm may have no knowledge of who the client even is.
CIBA is the representative body for business accountants in Southern Africa with a mandate to promote and enhance oppertunities for its members.
CIBA lobby intensely to ensure our members continue to be recognised laws and regulations as accounting officers, independent reviewers, and independent accounting professionals providing critical reporting services for all spheres in society including government, the public, private, and NPO sectors for a range of entities including: SMEs, schools, co-ops, sectional titles, companies, close corporations and other entities.
However legislation may sometimes require that a reporing service only be performed by: regisgtered auditors, large firms with lots of resources, or arge firms with access to specialist skills, alternatively a tender, business agreement, trust deed or other by-laws my determine specific requirements for a reporting service provider. This means our members face a chanllnege and a risk of not being able to access certain markets or clients. CIBA created the CIBA Strategic Alliance to address this issue.
For example, accounting officers have for many years provided reporting services to Schools. However the GDE recently decided to issue new regulations that require all schools in Gauteng to be audited. The implications of this regulation is that auditors can no longer perform any accounting or advisory services to schools, and accounting officers can no longer issue accounting officer reports for those schools that cannot afford an audit report.
In response CIBA developed the CIBA Strategic Alliance innitiative.
Our role is to engage with large firms with a national footprint, significant resources, willingness to respect the CIBA culture and members, ability to provide a comprehensive list of advisory, specialist and audit services, good reputation, a strong SME focus, and that wants to work with CIBA and commit to transfer skills to Small and Medium Practices (SMPs).
After a number of informal discussion within the accountancy sector, MAZARS stepped forward as our first Strategic Alliance large firm and was willing to pilot the project with us.
Our role is to:
Membership to the CIBA Strategic Alliance is limited to participating firms.
Donation to the Empowerment Fund for African Accountants (EFAA):
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