An Introduction to professional services

The professional services

The professional services support businesses of all sizes across the economy, providing advice and support in a wide range of different areas to help them improve and grow.

The professional services include lawyers, architects, accountants, tax advisers, actuaries, engineers and management consultants.

Professional occupations

The professional services include occupations like:

• Actuary

• Accountant

• Architect

• Engineer

• Lawyer

• Management consultant

• Tax advisor

Activity

In your groups, write down the type of work you might do in each profession:

1. Accountant

2. Tax advisor

3. Management consultant

Role of an accountant

Accountant

Running a business involves a lot of financial activities, from expenses and bills to taxes and payroll.

Accountants keep track of all these things and more to make sure that businesses – both large and small – manage their money properly.

What is an Audit?

• A financial audit is a process that accountants follow to ensure the financial statements of a business are accurate and / or profitable

• An audit seeks to provide reasonable assurance that the financial statements are free from material error

Audit work scenario

Sarah works in Public Sector Assurance and is working on a final audit at a large NHS trust hospital striving for Foundation Trust status. Sarah and her team must ensure that their accounts are presented without misstatement and are in line with accounting policies defined by regulatory bodies, as there is incentive for the client to overstate performance in year to achieve Foundation Trust targets.

The team will liaise with management, legal advisors and audit specialists to obtain the necessary evidence to support any significant transactions within the accounts and exercise professional scepticism when testing account balances. The fieldwork concludes with drafting management reports and also issuing the final year-end audit opinion.

Some of the tasks you might find yourself doing

• Reviewing financial accounts and data

• Selecting samples of accounts for testing

• Identifying staff and conducting interviews with them about working practices

• Update the client on risks and errors, and advising on the action they need to take

• Preparing and submitting clear and concise audit reports

Role of a tax advisor

Tax Advisor

• A tax advisor is a financial expert specially trained in tax law

• Tax law is the system of rules and regulations which governs economic transactions

• Tax advisors are able to help both companies and individuals interpret issues of a financial nature

What is Tax?

• Everyone pays taxes in one form or another

• Mostly the tax you pay is on your salary – known as income tax

• Or tax on goods you have purchased – sales tax

But why do we pay these taxes?

Tax

• The government uses our money to support public services

• Everyone needs to make a tax contribution in some aspect including businesses

How can a Tax Advisor help?

Companies and high wealth individuals might seek advice on how they pay their taxes in the most efficient way

A tax advisor will be able to use their knowledge of tax legislation to provide advice

Main areas of work

There are two main areas of work:

• Tax planning - staying abreast of changes in tax law and advising clients lawfully to minimise future tax costs. Tax planning is normally carried out by tax professionals operating within an accountancy practice or lawyers working within law firms

• Tax compliance – ensuring a client meets all tax obligations by preparing and submitting tax returns. And dealing with tax authorities. This work is usually undertaken by accountancy practices

Tax Work Scenario

Nabeel is working on a project for a large family owned company. The company is primarily owned by the father and has accrued cash of £10m from its trading profits. The father is concerned about the inheritance tax position of the company and how best to pass the business on to the next generation, as well as how he can extract the cash from the business. The work required will involve initial discussions with the father to understand what concerns he has and also to find out more about what he wants to use the excess cash for.

The team will also try to understand if there are any wider family or management concerns about how the business will be passed on to ensure that before putting forward any tax structures we fully understand the client's needs. The project will then involve looking at the tax implications of any structures put forward.

Some of the tasks you might find yourself doing

• Making sure the tax compliance process runs smoothly

• Researching, analysing and interpreting changing tax law

• Researching business issues that will affect clients’ tax issues

• Preparing and submitting tax returns

• Planning ahead to help clients understand their financial futures

Role of a Management Consultant

What is Management Consultancy?

• Management consulting refers to helping businesses to improve their performance

• They are primarily concerned with the strategy, structure, management and operations of an organisation.

• Consultants can assist by identifying options with recommendations, providing specific expertise and designing / implementing solutions.

Work Based Scenario

Matt works in Management Consultancy and is working on a project for a large retail business. They are faced with rising costs, and Matt's project team have been tasked with helping the organisation to improve the efficiency of their Finance function (e.g. paying suppliers and budgeting and forecasting).

The work involves undertaking an initial assessment of how the organisation currently operates, i.e. how many people currently work within these functions and what they spend their time on, as without understanding the current situation it is difficult to recommend improvements.

The team also carries out interviews and runs workshops with employees to gather as much information as possible. This allows the team to identify opportunities where processes can be run more efficiently and whether processes can be shared with other business units through shared services for example

Work Based Scenario

Saeeda works in Management Consultancy is working on a Strategy project for a large retail business. The organisation is faced with reducing demand for their products; currently their products are very expensive due to the high quality, however in the current economy people are simply not buying their products.

Saeeda’s team are tasked with assessing the organisations strategy and helping to come up with a new strategic 'direction' if that is what is found to be necessary. This involves undertaking competitor research to see what others are doing and researching the market in order to understand what the trends are likely to be in the near future, to ensure the organisation is offering the right products to meet the needs of their customers.

Some of the tasks you might find yourself doing

• Carrying out research and data collection and conducting analysis

• Interviewing clients’ employees, management team and other stakeholders

• Preparing business proposals/presentations

• Identifying issues

• Formulating and implementing recommendations/solutions

• Ensuring the client receives the assistance needed to implement the recommendations/solutions