Prediction # 12 – A hub of business success

When I enter the door of the new accounting firm I want to be met by my ‘client relationship manager’ (CRM) who manages my relationship with the firm. This person will assess my needs and determine which services I need to fulfil my future direction. They will then ask various professionals within the business to do the work necessary. I do not intend to visit division after division and be asked the same or similar questions.

The ‘silo’ and ‘division’ based model is an ineffective business model. This model does not encourage effective ‘cross selling’ or internal referrals. Rather it promotes ‘turf wars’, ‘client hogging’ worst of all the clients are not properly served with what they need. The client is a client of the firm – not the individual.

The new accounting firm will become a “Business Success Centre” and a hub of business – a delivery platform of likeminded providers.

Business Success Centre (see diagram)

  • Tax / Compliance (tax planning, quarterly / monthly accounts, audit)
  • Business Advisory (management accounting, budgets, cashflow, monitoring)
  • Consulting / Coaching (special projects, recruitment, succession, ongoing personal and business coaching)
  • Finance Broking (vehicles, leasing, equipment, property)
  • Risk Management (insurance and risk advisory)
  • Wealth Creation (stockbroking, financial planning, funds management, investment advice)
  • Concierge (all clients represented as nodes referring each other and the act is the central point through a web based portal)

Business success centre

The future is exciting for those firms who want to embrace it.

It is my life’s work (and that of my business) to help accounting firms dramatically improve their financial position. To supercharge your performance.

We want to lead you into this exciting new world. Come with us on the journey.

Prediction # 11 – Unless the culture changes it will be a less attractive option for young people

There is a general perception that the accounting profession is a bit dull and it does not pay that well. Unless it changes its perception (and perception is the reality in the eyes of the person perceiving) it be become a less attractive option for young people. It will be seen as a dying profession. With outward focussed marketing there is a massive opportunity to turn that on its head and offer a more compelling proposition to young talent.

Prediction # 10 – Corporate culture will prevail (see diagram)

The best run accounting firms are ones that adopt a corporate culture with a dedicated CEO who is making decisions and implementing the strategic plan. Typical firms use consensus management between partners to make decisions and as such few decisions are made – or if they are they are made very slowly. Many firms are adopting outside help such as independent chairperson and specialist business coaches to thrive. What growing business wouldn’t? It just makes sense!

The corporate culture has dedicated marketing, sales and management people doing their job and their job only. There are many successes worldwide of mergers, acquisitions and publicly listed companies within the accounting sector. This style of business will continue.

Organisation Chart - corporate model

Prediction # 9 – Marketing and sales focus will be needed to thrive

There is a ‘sea of sameness’ with the accounting profession. They pretty much all look the same and act the same way. If you want to stand out then you must market your firm. If you want to grow it then you must market for new business and have skills to sell the new business.

Firms are already hiring specific marketing people and dedicated sales people (often called ‘rain makers’) to generate new business. These skills can be bought in or learned.

Prediction # 8 – Clients will demand additional services

Clients are getting smarter and more business savvy. They have fast and inexpensive access to information through the internet and various industry associations. If they know what an accounting firm can offer they will start asking for it. After surveying over 7,000 business people they have told us that they are looking for 5 key service offerings over and above compliance.

  1. Growth – help with growth of revenue and wealth
  2. Profit – help with understanding and improvement
  3. Cashflow – help with understanding and managing
  4. Asset protection – help to protect all assets
  5. Succession – help with selling part or all of the business at some point

Progressive accounting firms can and should be offering these services to all clients. Your clients should know about all of your services. If you do not offer them another firm will.

Prediction # 7 – Business coaches & consultants will aggressively pursue SME’s

Business coaches or consultants have primarily offered leadership, management, marketing, sales and human resource services to the business community. They too are in business and are looking to expand. With the correct tools they can expand into the accountant’s space quite easily. There are many financial analysis software tools available that are relatively inexpensive.

If a current coach or consultant wanted to skill and equip themselves they could quite easily offer budget, cashflow, financial analysis, planning and monitoring services. When they do, it will erode away the revenue that the accounting firm should have.

Prediction # 6 – Unmotivated accountants will fade away

Like any changing business model those that are not motivated to change will fade away. There are thousands of partners making a tedious yet comfortable living adding no value to clients. This the crux of the current issue. It is too comfortable in the industry. As a partner you can make $200k – $400k without much effort. As the industry changes the motivation needs to change as well.

Prediction # 5 – The next partners will want faster results and be less patient

There is a definite ‘needs requirements’ difference between the so called generation Y,X and baby boomers. Around 90% of all partners are either Baby Boomers (current age 46 – 60) or Generation X (current age 30-45). As I generalise the baby boomers are less resistant to change mainly because they have their asset base sorted (or they should have). The next generation (X) are building assets for their future and are keen to adopt new ideas.

The next group of partners to come through, generation Y (current age 20-30), are a different breed. There has been much written about their needs and style. Hasten to say it is a faster moving generation than the previous two. The have grown up on the internet and other technology. When they become partners over the next few years they will want faster results and be far less patient. They are not going to wait for years and years to get a return on their investment.

Prediction # 4 – There will be less firms but larger firms

The accounting profession is still a ‘cottage industry’ made up of primarily small businesses. Even in Australia where it is a (approximately) $14BN industry with approximately 10,000 firms only (approximately) 400 firms have revenues over $3M. There is also an estimated 45% of all current partners over 50 years of age.

There are too many firms and far too many small sole practitioner firms. According to industry statistics approximately 65% of all firms employ less than 5 people. There should be half as many firms yet they should be larger in revenue. Many of the current partners should not be partners. If compliance is to become a commodity then some accounting firms may not be interested in continuing in their current format. To thrive accounting firms needs to offer a broad range of services (see prediction 12) and as such they need to be of a larger size with a broader range of people offering those services.

Prediction # 3 – Compliance will become a commodity

Because of predictions 1 & 2 general business compliance will become a commodity. There is a market for businesses that provides commodity services. They are typically volume / price driven markets.

Compliance will not go away completely. It would be foolish to think so. How else is the government going to check that you’re paying the correct taxes? As it becomes a commodity there will be less ‘mystique’ around what accountants currently do for their money.