Top Practice Trend Initiatives to Watch and Embrace
Not your father’s CPA firm! Accounting Today just published its Top Ten Practice Initiatives that accounting firms are increasingly pursuing.
(Powers Samas Accounting Machine 1948, click to enlarge)
What about YOUR practice? Are you evolving at a sufficient pace for the times?
1. Strategic Management and Corporatization
CPAs want to move away from a “services-driven” business approach to “strategy-driven” development of service offerings. That way, they can take their business where they wish, instead of the business taking them where they don’t want to go. Firms also want to make decisions faster. The role of “managing partner” is quickly turning into that of a CEO: empowered, accountable and visionary.
2. Building Capacity
Clients always ask their CPAs to do more, and firms need to be able to handle that. One CPA in New York provides monthly financial reporting services to a niche industry. Each week, at least one of his clients asks him to do their bookkeeping. This CPA is forced to turn down that business, as he does not have enough processing capacity available. The estimated revenue opportunity lost could well be $100,000 a year.
3. Marketing and More Marketing
CPAs want to free themselves from daily processing so they can devote more time to finding and getting new clients. Word-of-mouth referrals are just not enough anymore. Online marketing, social media engagement with prospects, providing expert advisory in public forums, various consulting services — there are many new marketing tools for CPAs to use. CPA firms want to understand more than ever how their clients are making the buying decisions when they source the services of a CPA firm. The trend seems to be moving away from a simple matter of “needs” fulfillment to “wants” satisfaction.
4. Creating Opportunities for Accounting Clients
CPAs aren’t satisfied with just producing perfect financial accounting. They want to make sense of each client’s unique financial situation and create specific opportunities for them. One CPA told us that one of his clients with a multi-location, multi-branch business was buying the same inventory items at different costs. If this CPA had the ability to do data mining to find trends and variances across all the different branches, his client would save tons of money every year on purchases.
5. Technology and More Technology
For a long time, accountants settled for a limited range of products that they used successfully year after year in their firms. But the explosion of online bandwidth, coupled with the emergence of powerful cloud technology for public accounting firms, is radically redefining the way CPAs provide their services. A CPA firm can provide services to clients in several states, using scanned images of their source documents. The result is low-cost, efficient, productive and profitable. Leave it to the cloud providers to deal with the hardware.
6. Empowering and Energizing Staff
Firms are focusing on making their staff more expert in their work, making the workplace more exciting and providing meaningful assignments to staff. The essence is getting staff to become better able and more available to engage with clients, which increases client satisfaction.
7. Core Competencies and Niche Creation
CPAs want to do what they do best: help their clients’ businesses grow. To do that, they need to focus on their own core competencies and leave the rest to professionals. Why waste time managing computer hardware? Use a managed services provider or cloud computing. Firms are also looking to leverage their core strengths to offer specialized services to niche industries.
8. Beyond Tax Season
Engaging clients beyond tax season is one strategy that many CPAs are implementing. Offering investment management, personal finance management and consulting services is just the beginning. Leveraging an existing network of clients, vendors and bankers to create mutual benefits is on the rise. No wonder the number of CPAs using LinkedIn, Facebook and Twitter is increasing by the day.
9. Value Pricing
Clients are used to paying a certain amount for what they receive from CPA firms. They understand time and effort. Many CPAs we met feel that value pricing does not mean charging more for the same deliverable. It has more to do with how effectively a CPA conveys the value of each deliverable to the client. At the same time, within firms, it all boils down to reducing the time, cost and effort of producing each deliverable. Use of new technology, and outsourcing of time-consuming tasks such as payroll processing to specialized providers, allows firms to benefit from economies of scale. The pricing is based on the value perceived by clients, instead of the traditional time and billing methods.
10. Brand Creation
Typically, small and midsized CPA firms are known for the “brand equity” of their partners. CPA firms are looking to enhance the brand value by establishing a more pronounced online presence and incentivizing clients to engage more online. A self-service client portal is one major item that many CPA firms want to provide to their clients. Yet CPAs want an integrated solution, technology that will take what they already have and, with minimal effort, make it available to clients.