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CPA Advisory Services

Get ahead of new trends in tax and accounting

Will Hill, MBA  Product Manager — Tax Professionals Advisory, Thomson Reuters

Will Hill, MBA  Product Manager — Tax Professionals Advisory, Thomson Reuters

Accounting firms deal with a lot of pressure from both inside and outside the firm to stay ahead of the competition. Regulation changes, different states governed by different rules, and many other factors can impact your firm’s success. Firms tend to add to that, making things more difficult by keeping knowledge limited in the firm and not defining their services clearly.

Firms need to experience that ‘lightbulb moment’ in order to get out of their own way and stay on top of new trends in tax and accounting. In this episode of Pulse of the Practice, “Reflections from the Road,” Paul Miller and I discuss the insights gleaned from speaking to accounting firms we met while on the road. We encountered some common themes, such as staffing and training. The most common theme: 2019 was a tough year for accountants.

New trends in tax and accounting

Many firms struggle to manage compliance issues. This means many are just looking for a better way to run their firms, manage their clients, and evolve and understand more about how to leverage advisory services. There’s so much to keep track of on the compliance side of accounting, making it hard to keep up with everything else. Another struggle for firms is retaining well-trained accounting staff who can keep initiates going, even if a senior level accountant leaves the firm.

The tax and accounting business is so deadline-focused that we get past a deadline, and then we think, “Ok, what’s next?” The next year comes around so quickly, and firms often wonder, “What could we be doing better?”

Firms need to take stock to figure out where they are going, then change their perspective. We need to stay on top of new trends in tax and accounting to remain competitive.

Find better ways to train staff

Firm leaders will often have great ideas they are passionate about, but they don’t know how to convey that idea to the firm as a whole, or how to make a change. Another common theme heard from firms is the difficulty involving staffing and training. Firm leaders considering their own retirement are concerned about who will carry on the work of the firm if someone leaves. As leaders invested in their firm, they want to keep building on what they’ve created, and are considering how they want to transition their clients. It’s an important piece of this whole process, seeing who you are bringing in to acquire and/or run your firm for the future of its growth.

One of the new trends in tax and accounting is not only the firm leader or a partner joins conversations with clients, but other members of their firm are also pulled into those conversations. If you want to add advisory services or make changes in your firm, you must make sure staff is also on board. You can’t do it alone.

It’s always great seeing firms bring all levels of staff into the conversation with a new client from the beginning for inspiration and training, especially when you are considering making a change. Bringing in a junior member of the firm in on the initial conversation is offers continued reinforcement to help them build muscle memory as they learn to speak to clients themselves.

Generational changes in accounting

The newer generation of accountants generally don’t want to do the same work in the same way as previous generations. They may be devising new ways to manage advisory and other services, as there are different ways to engage in a new and meaningful way with clients. That level of innovation really adds value to the firm.

It’s important to let the next generation know it’s okay to learn differently. Don’t try to force them into that older paradigm of thought. New technology and new ways of performing strategically can make a firm more efficient and profitable. One method firms might want to consider is offering a journey program with their younger staff, training them in case senior level staff leaves.

Adopting such a training process, could give new staff a deeper dive into all areas of the firm. For example, junior staff could spend a quarter doing all the payroll work, another quarter doing much of the tax work, and yet another quarter doing bookkeeping as well as some of the client and field work using technology.

New staff, especially, need time to experience a variety of accounting tasks. This longer length of time for hands-on training in any given area of study in the firm offers time to become saturated with a foundation of the actions needed to run the firm. It’s also a great way to keep newcomers motivated and learning. For fledgling staff which might be potential partner material, these extended training periods offer a framework to work from. Also, it can help them see the areas they may want to focus on in their career.

Team-building in the firm

Another benefit to a deeper level of training is it forces staff to learn how to communicate with others about how they do their work. This is a great way to identify if your inner departments have procedures documented. You’re also creating bench strengths. So, if one person leaves, then you have someone else with the experience who can step in as a back-up. This sets the firm mentality to a team environment, where more than one person knows how to do the firm’s tasks.

Firms can help build team morale and keep things fresh by moving clients around as well, assigning them to different staff. Invariably, when you work in a firm where clients are assigned to a single staff person, there will be some level of connection with that employee and the client.

Naturally, that staff member may know more detailed information about the client’s story. When onboarding new staff or managing workflow, it’s helpful to often implement the practice of moving that client to another person to build trust in your brand as a whole. It can be difficult for staff to let go of clients, too, but the main thing is keeping some fluidity in the firm.

Differentiating consulting from advisory services

The other question that stood out on our journey talking to firms was, “What’s the difference between consulting and advisory?” This is a good question for firms when it comes to framing their services. The term “advisory” gets thrown around quite a bit, but how does your firm differentiate it from consulting?

Consulting is when a client comes to you with a specific problem, and someone in the firm fixes it. Advisory is more about providing an ongoing, longer-term client relationship. When we talk about advisory services, this is managing a client relationship over a multi-year process, and consulting is more likely a one-at-a-time service. Although sometimes advisory will be termed into this idea of consulting or some kind of consulting services, think of it more as managing a client relationship over the long haul. Don’t get sucked into the idea that it’s a consulting thing, or simply a one-time job, and you are done.

Often accounting firms assume clients are there for a multi-year relationship, but clients don’t always have that same assumption. And, as a consumer of tax services, they may feel no connection to an ongoing relationship; they are just looking for someone to do their taxes.

One way to address the longevity of advisory services is by introducing the concept of a relationship that is on a long-term path trajectory, which tees off to future efforts. This is so the client really understands this isn’t just about this year. Advisory services are more about building a relationship with a progressive plan over time, and it’s worth it to trust and build that process.

Sometimes business owners have a little bit of hesitation when they consider adding services. Good client relationships have a general understanding they’re in it for the long term, and that this is a mutually-beneficial relationship. The goal is to help the client understand you are here to help manage that relationship in the present and beyond. Advisory services aren’t a fad; these new trends in tax and accounting are critical to your survival in the profession.

Listen to the “Reflections from the Road” episode of the Pulse of the Practice podcast on your preferred platform (Google Play, Apple, Spotify, Stitcher) or here.

 

 

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