The glory days of the reactive Accountant who makes $300K plus profit (per partner) are coming to a grinding halt. Unless of course you know of the signs and you do something about it.
In the past it has been ‘easy’ to make a good living in the Accounting profession. Clients have been loyal. There has been little competition. The government has kept the profession in business with legislative changes. The costs of operation have been low and you really have not needed to market and sell.
It’s all about to change. And fast.
There are 3 current impending threats and if you do something about it they can be 3 wonderful opportunities.
1) Internet based (Cloud) Accounting.
There is a groundswell going on with business based accounting systems. There is a massive push to take accounting systems mobile – in the cloud. It makes total sense. Every other type of information is going mobile through tablet PCs and Smart phones. It was just a matter of time before accounting information caught up. Cloud based accounting is brilliant for the business owner. Real time everything from wherever you are. Debtors, Creditors, Revenue, GP, Profit, Cash-flow – all on your mobile device.
Because of the ‘realtimeness’ of the data and because it is already connected to the internet the time taken to have the annual compliance completed drops. It is estimated that it takes around 30-40% less time at the accountants end to prepare the compliance accounts when the client has cloud based accounting. This means fee pressure from your clients for compliance as compliance becomes a commodity. This is already happening. It also means (for you) much more capacity as well. So you either downsize your team or have capacity to offer value added services. Please choose the latter!
Cloud accounting reminds me of internet banking 8 or so years ago. Some early adopters and a lot of naysayers. Now? What’s a cheque book? The same is happening with cloud accounting. Jump on it and promote it. If you don’t someone else will promote it to your clients.
2) Client education.
Clients are more savvy these days when it comes to dealing with accountants. The days of ‘Dad used XYZ firm so we should as well’ are numbered. Clients are asking more questions of their accountants and expecting more. They are interviewing a number of firms before switching. Clients are more connected than ever to information and the business press is promoting more and more ‘what your accountant should be doing for you’.
Are you going to stay on the back foot and react or get on the front foot and market your firm? Are you going to just stick to compliance based services or are you going to actively seek out products and services which can make a difference to your clients?
In the western world there is (approx.) 1 accounting firm per 2,500 head of population. That’s a lot of accounting firms. The issue is that it’s a sea of sameness out there with the accounting profession. For you to differentiate you must differentiate.
3) Other ‘professionals’.
Bank managers, financial planners, insurance agents, consultants, business networking groups, industry associations, real estate agents and business coaches all need to develop new products and services to remain relevant. And they know that you are the gatekeeper to businesses. They know that to remain relevant they must offer ‘value added services’ – not just what they have been doing in the past.
They can buy financial analysis software, attend the course and overnight they are a financial whizz. With the new information they can provide cash-flow analysis, KPI reporting, benchmarking, planning and even management reports to their (or your) clients. THIS IS YOUR SPACE. Do not let them erode the value that you can provide to your clients. Get on the front foot and offer these services – NOW.
Take the positive approach to these 3 threats and use them to your advantage. There are 3 great opportunities here if you act now.