9 Tips for Accounting Firms Looking to Stay Relevant
In all areas of business today, complacency is lethal and nowhere is this more evident than in the accounting sector.
Now, more than ever, accountants are looking to take their firm to the next level and claim a space in a rapidly changing market. Here are nine tips to help your firm stay relevant in a non-stop, ever-evolving digital age, and that will hopefully assuage any fears of being left behind:
1. Stop trying to do everything (and none of it well). Tax, audit, bookkeeping, advisory services ... the list of what you could offer to clients goes on and on. The best way to stake a claim in a highly competitive environment? Find a niche and execute with confidence. You don’t have to be everything to everybody, and in the end, it’s probably better if you aren’t.
If you choose to embark into a new line of business, establish team leaders to take ownership. When possible, look internally for someone with an existing reputation and a passion for the service (i.e., cloud, controller, bookkeeping, etc.). By dividing and conquering your offerings, you can empower each team to become the “best of the best” in that specific area. Your team will (hopefully) rise to the challenge, and customers will associate your firm with high quality and expertise.
2. Set reasonable profitability goals for new business lines. Currently, 94 percent of businesses see their CPA firm as strategic advisors, giving firms plenty of opportunities to provide more value and better leverage their relationships. As accounting firms launch new offerings, teams must set profit goals accordingly. Be realistic and know that most new business lines will not be profitable for the first two or three years. While a firm may be accustomed to set utilization and billable rate goals for more mature business lines, new metrics must be created to judge performance of new business lines.
There is a level of investment that is required to start a new line of business, and it will often take a brand-new mindset to invest into a team that’s not initially profitable. Remember to reward the team that is executing well, even if profitability is not at the level of more mature business lines. You’ve had years to allow your audit and tax practices to mature, so be sure to rethink your profitability, goals, and timelines when launching a new offering.
3. Adopt next-generation communication channels. Today’s digital and social age is drastically changing the way clients want to communicate with accountants. Without question, now is the time to reevaluate how to communicate and what tools should be leveraged. Millennials will comprise more than one out of three adult Americans by 2020 (and 75 percent of the workforce by 2025). To stay relevant, the accounting industry must adapt to better match their communication preferences.
Did you know that Slack recently hit the 500,000 user mark and is reported as the fastest-growing business app ever? And, a recent study found that the “telephone” app on smartphones is the fifth-most-used app among the general public. New software, tools, and devices are taking the place of more traditional forms of communications, and by keeping up with how your point of contact prefers to communicate, you’ll claim your spot as a tech-enabled, forward-thinking company.
4. Stop killing trees – online approvals are OK. Today’s professionals are on the move. New technology is making it easier than ever for people to work anywhere, anytime. According to the Bureau of Labor Statistics, 24 percent of professionals work remotely, and 68 percent expect to in the future. It’s time for firms to adjust to this connected and mobile world.
For example, rushing an order through FedEx is expensive and time-consuming for accountants – not to mention archaic for those on the receiving end. If you need a signature, why not opt for online approvals using technologies like Docusign or HelloSign? Or, if you need to send a file, use Google Docs or Slack to enable instant delivery and faster response times.
5. Embrace virtual meetings. How much time does your team spend preparing for, driving to, finding parking, and driving back from meetings? Ninety-four percent agree that video conferencing increases productivity, yet many traditional firms are still defaulting to these face-to-face interactions. Video conferencing tools (like Zoom and Skype) provide a cost-effective alternative that still provides valuable face-to-face communication and collaboration. Save time internally and provide more value to your clients by opting for online meetings whenever possible.
6. Stop seeing the cloud as your enemy. Currently, 93 percent of SME accountants said they could add value to existing client relationships by turning attention away from automated tasks, yet only 15 percent of smaller accounting firms have embraced cloud technology. That massive disparity represents an opportunity for firms looking to modernize and get ahead.
If you don’t make the switch for the sake of streamlining your internal processes, you’ll likely feel the push from your clients. Scared to commit to the cloud? Start slow by exploring potential solutions through free trials. Then, identify well-suited clients to partake in a cloud pilot program to test your new offering.
7. Partner with fewer, better technology companies. Today’s accounting technology ecosystem is expansive to say the least. While the right technologies can save you time and add to your bottom line, many firms are suffering from what we call “app overload.” This can be exhausting for a firm looking to stay relevant and can also end up hurting, rather than helping, speed up basic admin tasks or improving services.
Accountants must cut through the noise and commit to more strategic tech partners. Start by conducting thorough research, test out solutions before adopting them, and thinking through each potential partner while keeping your clients’ goals in mind. Once you’ve narrowed down the list, you can provide greater commitment and create deeper relationships with the best technology partners to enhance your services portfolio.
8. Invest in your people through technology certifications. It takes more than the right tools to succeed – it also takes a strong team willing to adapt and leverage new technology. Gallup identifies “opportunities to learn and grow” as one of the top three factors in retaining millennials. And, with retention being a critical metric for a firm’s success, investing in your team is a no-brainer.
You probably have the infrastructure in place to train your people, but don’t forget about technology. Consider getting your team certified in any major system that you support (like QuickBooks, Xero, NetSuite, Intacct, etc.). This shows your commitment to your team’s long-term success while instantly setting you apart from the firms lagging behind.
9. Outsource your non-core services. For accounting firms looking to scale, outsourcing anything that falls outside of your core services is a must. Hand off what is not in the firm’s wheelhouse so your accounting team can focus on what they’re best at – accounting.
We ask our clients to do the same when it comes to their accounting (which is likely their non-core task). Elicit the help of specialists to manage your non-core tasks, such as marketing, scheduling, or sales.
The key takeaway for accounting firms looking to stay relevant is: adapt to a changing market. Modernize your practice by honing in on your core competencies, leverage the right technologies, evolve the way you communicate, and invest in your team.