Tax & Accounting Blog

Do You Understand the Value of Your Firm?

Accounting Firms June 27, 2016

Authors: Will Hill and Christie Johnston

Do you understand the value of your firm?

Why making the move to advisory-based services is necessary in today’s environment

As technology continues to disrupt industry after industry, staying ahead of the game and capitalizing on opportunities to provide more value is paramount in keeping businesses afloat. When it comes to the accounting profession, there is no doubt that surges in technology are pushing traditional compliance activities closer and closer to full-blown automation. While some practitioners fear this upheaval, smart ones see it as an opportunity to transform.

By using technology to automate traditional compliance activities, more and more accounting firms are shifting their focus to providing clients with consulting and advisory-based services. This change in strategy not only positions the firm as a trusted advisor as opposed to strictly a number-cruncher, but also elevates revenue and increases satisfaction for practitioners and clients alike.

Focusing on the future instead of the past

In an era where your firm and your clients need to make more decisions faster than ever before, information that may have been useful a month ago may be outdated by the time you use it to plan strategies for the future. For this reason, accounting firms must stop looking at what’s already happened and instead give clients the tools they need to look forward to the future. It’s this “future forward” approach that brings true value to clients.

With disruptive changes in legislation and ever-evolving regulation, today’s accountants are often overloaded with tedious work. By shifting your approach to helping your clients focus on the future and make better decisions, you’ll reignite your passion for the profession knowing you’re truly helping others achieve a better quality of life.

However, before you can expect your clients to appreciate your change in strategy, you need to understand the value of your firm. Yes, knowledge and experience is hard to quantify, but profitable value-based billing models that put the emphasis on guiding and advising clients rather than “punching the clock” with a traditional hourly billing model is the approach that will guarantee your firm’s growth into the future.

A look at advisory-based services

So what activities should you put emphasis on when moving to a consulting and advisory-based model? Here are a few examples of ways you can provide clients with more value, in addition to your traditional compliance services.

1. Improving clients’ bottom line
Through proper tax planning and income strategies, you can help your business clients add more money to their bottom line. From helping them to understand compliance requirements and employee benefits to understanding allocations of gross sales to COGS, overhead, and taxes, your clients will be able to use their savings to fund their business in ways that will help them grow.

2. Planning for the future
By showing your business clients how to implement a more efficient tax structure for their business, you can help them realize a significant amount of after-tax cash. You could also help them set up a bookkeeping system that provides a P&L and balance sheet in real-time for planning tax compliance.

3. Successful succession planning
By helping your clients achieve a stronger cash position, they’ll be able to recruit additional talent and more effectively tackle their succession planning. Your expertise could also help them implement an organizational structure and internal management team that will ensure their business continuity.

4. Expanding assets and shrinking risk
By helping your clients forecast, you can identify business segments with the most profit potential and the least amount of risk. With the increase in profit, your clients can acquire assets with less financing and implement aggressive depreciation of assets to minimize taxes.

These are just some examples of the value your firm can provide when moving to a consulting and advisory-based model. If these examples resonate with you, it’s time to make sure your firm is benefiting from them.

Making the move to advisory-based services

The first step in moving to an advisory-based model is to organize your firm by separating duties for compliance work and consulting work. Once you’ve redistributed the work assignment allocations so the right people are handling the right tasks, you can free up that valuable time to focus on advisory services.

Secondly, you’ll need to change your engagement strategy for new clients based on the value your firm brings to their business and reinforce your value with your clients through continuous education. Further, your new client services should be geared toward identifying end goals, setting the path toward those goals, and guiding your clients down each step of that path. And because you and your staff will gain a deep understanding of the expertise your customers really need, your firm will be empowered to identify additional opportunities and bring them to fruition.

Once you’ve set this plan in motion, you’ll see a transformation take place within your firm. With client retention up, you can be more selective of the clients you choose to serve — and your client referrals will more accurately set expectations for your future clients. In the end, you’ll not only be firmly in the driver’s seat of your business relationships, but will experience increased revenue from your deeper interactions with your clients and, above all else, will feel you are truly making a difference in their business and financial lives.

Can we help you?

There is much to consider, but fortunately you do not need to make this transition on your own.
Thomson Reuters Practice Forward is here to help you learn from successful firms who have successfully made this change and speed up the learning curve. Learn more about Practice Forward here – and welcome to becoming a firm of the future.