Like every other accounting firm, yours is likely under growing pressure to transform the way it interacts with clients. From the use of client-facing and internal technology to positioning your firm through differentiation, the way we do business is changing. It doesn’t help that the market feels saturated, considering the nearly 1.25 million accountants and auditors in the United States. That makes it difficult to stand out. Yet that is exactly what your firm must do to survive and thrive. Here are opportunities to do just that.
1. Develop Deeper Relationships
At any given moment, about a third of accounting firm clients are considering switching firms, according to a recent survey by the Aberdeen Group. It’s a well-known fact that it’s far more cost effective to keep a client than to bring on a new one. In fact, it’s also quite lucrative to do so. It turns out that firms with satisfied customers expect an average of 7% higher revenues in the coming year.
No wonder so many accounting firms are exploring ways to introduce new services.
What new services can your firm offer now and in the future with some upfront planning?
2. Pursue Innovation
According to a recent survey by the American Institute of CPAs and its subsidiary, CPA.com, most CPA firms are taking steps to become more innovative in practice management. Examples include using value or fixed pricing instead of hourly billing. Your firm can do the same by offering set packages of services, and or taking a more consultative, value-add approach to client engagements.
CPA.com strategic advisor Greg LaFollette predicts that a growing number of firms will offer boutique-style, value-priced “packages” to clients. He shares these examples for tiered tax services:
Silver: basic preparation with a 15-minute consultation after preparation
Gold: adds a one-hour tax and overall financial planning consultation
Platinum: adds unlimited, year-round phone/email access and representation before the IRS for any issues concerning this return
Obviously your firm would charge a premium for the platinum package.
3. Adopt the Latest Technologies
With so many technologies available to help improve processes, deliver data insights, and open up new revenue streams, your accounting firm would be foolish not to take advantage of these. While tools like tax prep software and document management systems are useful across firms of any size, larger firms are embracing other new technologies – such as those for managing workflow and practices – a at higher rate.
4. Get Data Smart
As Lauren Clemmer, Executive Director of the Association for Accounting Marketing says, “Smart firms dig into their data and analyze the source of their business. By understanding what their most profitable and loyal clients value, they can strategically focus to develop new product lines and new business based on their strengths.”
Your firm can do the same by reviewing client billings and engagements to date. Remember to pinpoint the most profitable offerings that also yield long-term client retention.
5. Skill Up
Hand in hand with getting data smart, many CPA firms are finding the need to develop deeper data analytic skills. No wonder. According to the Journal of Accountancy, “…mastery of data analytics can help businesses generate a higher profit margin and gain a meaningful competitive advantage. Some experts even predict that companies ignoring data analytics may be forced out of business in the long run.”
In addition to calling upon technologies such as predictive analytics, your firm needs to hire or train the right people to analyze the data. As Roshan Ramlukan, EY principal and global assurance analytics leader says, “The human element of data analytics is the most critical factor in building a successful program.”
By becoming more proficient in data analysis, accounting firms can better derive insights to guide their own practices forward while supporting their clients.
6. Tap into New Social Networks
According to Follette, clients will “increasingly shop and screen professionals based solely on that professional’s digital presence, making your ‘digital brand’ and ‘digital footprint’ more and more important. If your firm isn’t on par with or ahead of the industry – 57% are on LinkedIn, 50% are on Facebook, 22% are on Twitter, and 15% are blogging – it’s time to establish a presence. The key is to be active, helpful, and genuine.
7. Pave the Way for Successors
As the current generation of accountants approaches retirement age, it’s essential for firms to make plans for the future. Boomer Consulting president Sandra Wiley advises to tell current leaders in the firm “the most important thing they can do is to find ways to pass their wisdom and knowledge on to the next-gen leaders in your firm…if they can adjust their focus from the day-to-day client work, and focus on mentoring, teaching, protecting and future-firm focus, our profession will thrive.”
ConvergenceCoaching co-founder Jennifer Wilson echoes this sentiment. “Make the changes needed to be a next-gen firm and retain your future leaders…Put together a next-gen advisory board and have them prioritize the changes they most want to see — then work with them to implement these changes. They are bright enough to generate solutions and implement them. Empower them and get out of the way!”
Ready to help accelerate the impact of your firm’s business development? Schedule a demo today or check out this business development wisdom from industry leader Danny Estrada.