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Accounting

Future of accounting: Building the next gen accounting firm

Thomson Reuters Tax & Accounting  

Thomson Reuters Tax & Accounting  

You’re ready to take the next step to ensure longevity and be part of the future of accounting. You want to build the next generation accounting firm: yours.

In a previous post, we discussed how your profession is changing, and ways in which your business can change along with it to ensure it will succeed.

We talked about how technology and market forces can and are changing your business, but more important, how a reorientation of your business can make it thrive in a dynamic, if sometimes chaotic, environment. We also discussed the importance of looking forward, beyond transactions, to long-term advisory relationships.

In this post, we’ll take a look at some practical suggestions on how to prepare for transitioning your business and how to actually make the change. It is important to change the way you think about your business. Then, you need to begin taking concrete steps that effectively help you make the change.

From expanding your service offerings to hyper-specialization (and everything in-between)

Transitioning your accounting practice to an advisory service implies offering a wider variety of services than you are currently. That can be accomplished in several ways. But whatever you do, it’s ok to start slow. In fact, make sure you do. Make the change by building incrementally from your current core.

The first step is to identify your current areas of expertise and core competencies. To move forward, you first have to know exactly where, and who, you are. Identify what you do well and what expertise you have that you are not currently using with your clients. Identify what types of clients, industries, and organizations you serve and which ones you serve particularly well. Part of this exercise also includes assessing the skill sets of your staff members. Consider how to retain and nurture them in order to grow your business overall.

One approach to the advisory transformation process is to logically extend the range of services you provide. Take a matrixed approach that considers who your clients currently are and the nature of the services you currently provide. For example, if you offer estate tax planning services, maybe it makes sense to expand to related areas, such as elder care. Or, if you have a number of successful relationships with attorneys and financial advisors, consider expanding into legal practice management or wealth management.

Another approach is more focused specialization, and assuming an advisory and management role, similar to that of a general contractor. This is beyond just providing referrals, which you probably do now. It means being the central point of contact and the filter and coordinator for information. That’s because however careful you are about your referrals, it is possible that your clients could receive conflicting information from them. It also means, like a contractor, assuming responsibility. This approach is less likely to increase your revenue, but it is likely to increase client loyalty.

The most practical approach may well be a combination of the two: expanding your expertise and the services you offer, while leveraging your growing network of professionals and drawing them into a more formalized cooperative.

Whatever approach you take, you start with an advantage. You already have your clients’ business, and you already have their trust. As the AICPA puts it, “tax planning is an integral value proposition for clients, and it can also serve as a jumping-off point for providing other value-added services.”

Managing your new advisory-based business

A different kind of business requires a different management approach. You’ll potentially be dealing with different regulatory bodies, new clients, and a wider variety of industries and businesses.

There are a lot of vendors with software, platforms, tools, and other resources to help you shift your business model. Many are offered piece-meal. Consider the strategic vendor relationships that will help you manage workflow and customer relationship management with integrated solutions in addition to providing the guidance and support you need through the transition to the future of accounting.

You also need to consider how you price your services. If you are still using an hourly rate model, consider shifting to value-based pricing. Also, as you expand your business, make sure you evaluate your business insurance, as you may have greater potential liability depending on the services you offer.

Technology will play a much bigger role as you change your business model.

  • If you don’t already, should you use secure cloud-based storage as your volume of data rapidly grows?
  • Should robo-advisors have a role in providing efficient money management services?
  • What is the most effective and efficient way to educate yourself and your staff as you grow?
  • Do you have the right communications infrastructure in place to keep you, your staff, your clients, and your network connected?
  • Do you have an engaging, informative, and current social media presence?

Make a checklist for yourself. We’ve suggested some places to start, but in the end, only you know what needs to be done to reposition your business. And of course, establish reasonable but firm dates for each item.

Taking the next step towards the future of accounting

Preparing for and making the transition to an advisory business shouldn’t be, and doesn’t have to be, done on your own. A trusted partner who can provide the support you need to adapt, grow your business, and help your clients to succeed in this rapidly changing profession is an investment in your future.

Keep in mind, there is no such thing as an off-the-shelf, one-size-fits-all solution that works for everyone. There is no precise analog for your unique firm and its numerous relationships. Look for a comprehensive, integrated, consultative solution and service that is custom-designed specifically for you, and specifically to build, grow, and enhance your particular practice.

Advisory Services: A Differentiator in an Evolving Profession

The rise of DIY tax software is fueling the commoditization of tax preparation and placing pressure on firms to differentiate. At the same time, client expectations are growing increasingly demanding.

It’s a perfect storm that is bringing about significant changes and challenges for the profession. It’s also presenting a wealth of opportunities for those accounting professionals who leverage innovative technology and resources and set their sights on offering higher-margin, high-value advisory services that extend beyond compliance.

Read our Advisory Services: A Differentiator in an Evolving Profession white paper to explore how the shift in strategy will better position you as a trusted advisor and prepare for the future of accounting.

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