Scope and instructions: What do the parties need from the single expert to find a solution?
Defining the expert's scope
Instructions and scope should begin with the end goal. While it’s common for a single expert to value a business or group of entities, any other additional advice required that would assist in enabling the parties to reach a resolution should be considered. A common example is taxation calculations relating to the potential split of the assets and liabilities. Considering the possibility or need for such work upfront allows this to be agreed from the outset.
Addressing concerns of a party
Parties may raise issues that extend beyond the core task being undertaken. Whether it's concerns about expenses incurred or setting up a new business unit, these are often ignored for the purpose of providing instructions. Acknowledging and addressing such issues at an early stage will often allow the core task to be undertaken more efficiently.
Setting clear parameters
Establishing a structured process, setting clear timelines, and enabling transparent communication channels, enable an expert to work more efficiently and effectively. From setting out explicit steps in the process to facilitating joint meetings and communications, clarity, and certainty as to what is occurring, and when, is important.
Timing and information required – has a plan been put in place?
In a single expert valuation process, the timing and method of providing information to the valuer are crucial to achieving desired timeframes. Valuations rely on a mix of financial and non-financial data and one piece of information will often raise further questions or a need for further data. Ensuring relevant team members or advisers who need to compile documents and data are engaged early and are aligned to the timeframes is often the most important step.
We are also of the view much can be done to prepare for a valuation process prior to it being formally initiated. Parties can start to compile a ‘data room’ of key financial and non-financial information prior to formalised instructions being provided to an expert. When the valuation process is agreed and commences, most information could be available at the outset. This is likely to result in a reduction in the timeframe for the valuation to be completed.
Understanding the key drivers of costs for a single expert
Expert accountants are often asked to estimate fees on the provision of initial instructions with often limited information. This might include only a few key documents and lead to a lack of understanding as to the inherent complexity in the valuation.
Several factors contribute to an increase in professional costs when engaging a single expert accountant:
- Scope change and unforeseen complexity: As the case unfolds, unforeseen complexities may emerge, necessitating adjustments to the scope of work. For example, when there is a sudden, significant drop in sales following the closure of a key customer and it is unclear how the sales void can be filled in the short to medium term.
- Quality and completeness of information: The quality, completeness, and accuracy of the information provided to the expert can have a significant impact. Incomplete or inaccurate data can lead to more time being needed to obtain the information and analyse it, leading to additional costs.
- Multiple tranches of incomplete information: Receiving information in multiple tranches, each incomplete in its own right, can hinder the expert's ability to analyse the information efficiently. This fragmented approach can also result in delays.
These factors highlight why planning the scope of the expert’s role and engaging with those required to compile the information require early is critical.
Utilising an expert after their report issues
The role of the expert valuer in a family law process may be perceived to end with the issue of their report or after questions are asked under Rule 7 or responded to under Rule 7.25. This Rule provides the opportunity of a conference between the single expert and the parties (or a party) for the purpose of clarifying the report. Our experience is these conferences could be pivotal in increasing the parties understanding of the valuation and the conclusions reached. Currently, our experience is that these conferences are underutilised.
We’re here to help
The above suggestions are some easy ways the parties can improve the value obtained from accounting experts in their family law process, as well as put them in a position to resolve their matter quicker and without unexpected costs. If you need assistance with engaging an accounting expert, please reach out to our team of experts today.
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