Business needs are changing, requiring companies to seek new strategic capabilities. Tax and accounting firms are uniquely positioned to be strategic advisors and service providers for their clients—but CPA firms must evolve, too.
Modern businesses face unique challenges when trying to grow and stay competitive in a rapidly changing business environment. Marketplaces are becoming tighter and competition fiercer. The workplace is becoming more technology-driven. People entering the workforce have different expectations than previous generations—and often more options about where they work.
These changes impact companies in just about every area of business: financially, organizationally, and from a marketing perspective.
As businesses work to keep pace with new these challenges—and the opportunities they present—they need to think and act differently. Some need to run leaner and more efficiently; others need to invest in emerging innovation to capture new opportunities. But all need to rethink how they operate, including their financial infrastructure and workforce.
Tax and accounting firms can serve as a consultant for clients working through their path toward modernization. Doing so offers firms a way to replace vanishing revenue from declining tax compliance work and an opportunity to strengthen the relationship with clients.
To be able to offer this service, though, firms will have to be able to evolve their own business; they’ll need to strategically pivot from being a traditional service provider to one that focuses on offering higher-value (and higher-margin) advisory services.
Now is the time for leaders to determine how their firm will approach this new reality and what their firm will look like five years from now.
How CPA firms can help businesses at various stages that are seeking help to evolve
Businesses looking to optimize workforce growth: Some companies have no finance or accounting professionals in-house and no desire to change. These businesses typically outsource most or all their finance and accounting needs so they can focus on core business and customer needs.
These businesses need work plans that enable work to happen fast and efficiently to maximize team time and talent. This can include payroll, accounts receivable and payable, and bookkeeping. But those are just the basics; any financial function—from these basics to advanced forecasting—can be made programmatic and predictable.
Tax and accounting firms can be there to handle these traditional CPA roles and creating needed work plans. They can also help businesses understand how business intelligence (BI) and analytics can help them spot trends and opportunities—and how they can act on them.
To do this, firms should use solutions that simplify and speed workflows, enable accuracy and collaboration, and give clients confidence.
Businesses that require occasional additional services and/or staffing: Some organizations have resources on staff to “cover the basics.” Outsourcing finance and accounting services gives these businesses an effective way to bridge the gap between predictable needs and everything else.
These additional services can scale and adapt as the needs of the business change, and smarter tax and accounting firms should be ready to provide this flexibility.
Firms will need to meet their client’s business demands for service while still managing seasonal compression challenges. If every business needs extra help at the end of the year, the stress can be immense, and firms are simply multiplying their compressed workload problems.
Firms can get ahead of this challenge by deploying technology and market research to gain insights to be predictive and proactive.
Senior staff can also be offered in a “fractional CFO” capacity. This not only enables small/growing businesses to get outside help; it’s also a great way to let senior staff get exposed to a wide variety of industries and challenges.
Businesses that need expertise in improving technology and process best practices: Some companies need help making processes more efficient and impactful without sacrificing security or dependability.
Firms can become advisers for these businesses by first becoming experts on their own technology while also understanding the greater impact of technology on a specific industry. This knowledge should include hardware and software and how best to utilize advanced tools like artificial intelligence and analytics. These are the skills firms need to offer client advisory services, but they can also be leveraged to fill gaps in client business capabilities.
Businesses facing change, from new markets to mergers and acquisitions: Entering new markets or growing through merger or acquisition can significantly impact both compliance and other needs.
Tax and accounting firms can offer their compliance and regulatory expertise to ensure these companies smoothly grow into their new markets or new, larger company.
Businesses seeking visibility through metrics and benchmarks: Organizations are often familiar with their own data. But many business decision-makers want visibility into how competitors are doing and how organizations with similar sizes and missions are performing. They want to know what lessons can be learned and leveraged.
Companies may not necessarily need more raw data, but rather help to figure out what to measure from the data. They need to know things like: What are the most appropriate key performance indicators (KPIs) to assess financial health? What benchmarks are the best way to establish baseline success and measure future success?
Firms can help these companies answer these questions and get the most out of analytics. But first, firms need to invest in their own analytics capabilities. This means bringing in data scientists or recruiting team members who understand the entire “data supply chain” where information moves from raw data to a valuable resource.
Firms can also train staff on next-generation analytics and reporting tools and always ensure some team members are watching the artificial intelligence/machine learning space.
Businesses needing auditing and assurance work: Non-financial audits covering cybersecurity, quality, or performance claims are more and more popular. As these frameworks become more complex, companies need to understand requirements, build controls, and then demonstrate compliance.
Firms can meet these needs for businesses. To be prepared for this service, firms should add specialist staff or create opportunities for existing staff to become certified in these specialized audits.
Firms should also invest in best practice tools and content that support these efforts. This can include specialized audit workflow tools and evolving content that ensures both the firm and clients are up to date on the latest version of a specific framework.
Conclusion
The world is changing for tax and accounting clients. To survive and thrive, businesses need to build a more adaptive business model, mitigate risk, and adapt to evolving customer expectations.
To get it done right, many businesses will turn to professional service firms. For CPA firms, this presents an opportunity to transform from merely a provider of traditional tax and accounting services to a strategic partner for modernization.
For more insights on The Big Shift and actionable steps for your firm to evolve with clients, check out the related blog, The Big Shift: Changing needs means changing tactics and whitepaper, The Big Shift: How CPA firms can reposition themselves to help clients evolve.
