Your clients are wisely searching for the right financial professional that can help them unlock their financial growth. “Financial success does not fall in your lap,” says Justin Hatch, CEO of Reach Reporting. “You have to be intentional with your choices. How intentional can you be if you don’t understand your financials?”
Most accountants provide amazing spreadsheets that contain all the data needed to make wise decisions. Unfortunately, that knowledge hides from non-accountants in columns and rows. Savvy accountants take the time to convey that knowledge to their clients, allowing them to make wise choices and maximize their success.
As your client’s business evolves, the necessity for more than traditional accounting services becomes crucial to long-term success. 82% of clients request greater strategic insight and more support from their accountants. Businesses are clamoring for advisory services (17%) and outsourced CFO (5%), which provides significant growth opportunities for accounting firms. To take advantage of this, accountants must become better equipped to meet client demands by evolving into trusted advisors for their clients.
The Sage survey sourced above highlights a breakdown of the reasons why Accounting needs to evolve:
- 21% Market Demands More
- 16% Increased Business Regulations
- 15% Ongoing Digitalization
- 13% Generational Changes
- 13% Client Demands
- 12% Investments to Keep Pace
- 10% Do not believe there is an evolution occurring. (Flat Earthers)
Evolve. That is both an exciting and scary word. In a world of ever-changing technology, it is a reality that frequently bombards accountants. But what does it really mean to evolve? For most, it is elusive. Where do you start? This article will help accountants identify areas of opportunity to enhance their offering and strengthen their position in the marketplace. By aligning with opportunities, firms will embrace the benefits of emerging strategies around pricing, technology, services, and more while creating lasting, mutually beneficial client relationships.
Below are a few opportunities that accountants can examine:
Clients are willing to spend more.
Firms that connect with clients and effectively communicate the benefits of their financial data are 3.5 times more likely to increase their prices successfully.
Small businesses showed a 31% increase in spending when offered additional services, while mid-sized companies displayed an 11% willingness to spend more. Percentages like these provide sizable growth for any firm.
Here are a few things companies are willing to pay for:
- Planning for growth (19%)
- Receiving expert financial insight (18.6%)
- Cashflow/minimizing overhead costs (18.2%)
- Staying in compliance (17.4%)
- No time to focus on accounting (17.4%)
- Maximizing profit margins (16.6%)
Advisory services produce a better client experience.
According to a CPA.com survey, the top three things clients would change about their firm are:
- More communication touchpoints (28%)
- More familiarity with their business/industry (27%)
- Better customer service (19%)
Adding additional advisory services to your offering will provide benefits that help resolve these concerns while contributing to a positive, long-term relationship with clients.
Technology is critical to cost savings.
In a Sage survey of accountants, the majority of respondents (56%) cite the increased productivity allowed through technology advances as the main benefit of technology, with an additional 27% viewing the time-saving aspect as its most important value related to enabling them to focus on customers.
Businesses are leaning on data insights more than ever to cope with the pandemic’s fallout and task their accountants with providing it. How can they ramp up data efforts while maintaining costs?
Let the statistics paint the picture. New research shows that 67 percent of accountants prefer cloud accounting over locally installed software options, and cloud software reduces labor costs by up to 50%. Finally, 57% of accountants find technology literacy a critical additional skill for future employees in the field.
It is projected by 2020, that 78% of small businesses will be relying solely on cloud technology. Additionally, 58% of large companies are utilizing cloud accounting services. Companies that use cloud accounting exclusively add five times more clients than companies that do not. In addition, companies that exclusively use cloud accounting also saw a 15% revenue growth year over year.
Specializing in a business or industry establishes expertise.
There are over 1,076,179 accountants currently employed in the United States. About 79% of accounting firms provide the same essential services to their clients. However, firms are beginning to specialize their services, helping accountants streamline, become experts, and attract specific clients. As stated in AICPA’s Career Planner, “the more expert you are, the more clients will clamor for you, and the more money you’ll make. Simple as that.”
Value pricing benefits the firm and the client.
In a CPA.com survey, clients showed high acceptance of value billing arrangements. 63% of clients reported paying for accounting services through fixed monthly fees. While only 28% of them said, their accountant changed them by the hour. Once implemented, bundling and packaging value-rich services are on the rise and prove to be a durable, ongoing success. Value pricing enhances the client experience. It creates accountability, establishes reliability, and showcases the shared knowledge of the accounting firm.
Entrepreneurs need your help.
According to data from the U.S. Census Bureau, aspiring entrepreneurs filed paperwork to start 4.3 million businesses in 2020 — a 24% jump from the previous year and the highest volume of applications since tracking began in 2004. This entrepreneurial upswing during the pandemic has created a surge of opportunities for accountants. Around 70% of small businesses don’t have an accountant. More than half of those businesses rely entirely on the owner or manager to handle their financials.
Pay attention to strategic advisory services.
Enhance growth and client satisfaction by offering strategic advisory services focused on areas that are valuable to clients: revenue growth and business modeling, budgeting, tax planning, and risk management. Take the time to know your client base by reaching out and discussing their wants and needs with them. Simple surveys, polls, and feedback will help you get to know them more quickly. Once you get the pulse of your clients, look at your firm and ensure you can advise them specific to their goals. If not, it is time to explore your staffing strategies and educational opportunities or elevate your technology.
The bottom line.
Clients’ needs are growing, and they are looking and willing to pay to get the help they need. If you are not willing to do it, your competition is. More and more firms see the reality of needing an accountant and a financial advisor on the same team with the common goal of supporting the client. Reach Reporting is here to help you strengthen your clients understanding of their financial data without extravagant cost or time. Truly make a difference for your clients and support your firm’s evolution.