There are 2 major threats (aka opportunities in disguise) for the Accounting profession.
- Cloud technology – massive efficiencies at your clients end with processing data and accessing information that you may normally provide
- Globalisation – the ability for an Accountant anywhere in the world to do work for your clients
You cannot control these threats. They are being led by social change and major technology companies.
In the market I am seeing price pressure for compliance work. It’s being commoditised. I am hearing about major time efficiencies when your clients implement cloud accounting – which means the client wants it to be cheaper. Already I am seeing Accounting firms not from our country promote to local businesses.
Around 50% (maybe more) of most accountants’ revenue is ‘checking data’ and ‘lodging forms’ with the government agencies. It’s this part of the revenue that will be hit hardest with cloud technology and globalisation. My estimation is that around 40% of compliance revenue will be wiped out by cloud technology. Let’s face it annual compliance is late and offers little value to the business community. It should be value priced… down!
The days of Accountants experiencing limited external competition and limited price resistance are over. Accountants the world over have to market better, sell better, give better service and offer more value added services.
To combat these threats there are 7 key areas to focus on in your firm:
- Strategy – developing a concise and exciting strategy to capitalise on the threats
- Workflow – getting as efficient as possible, reducing time taken on client work
- Cashflow – increasing profit through margin improvement and reducing WIP and debtors
- People – getting the ‘A’ team who are trained, resourced and excited. Maybe outsourcing is an option to get the best.
- Marketing – growing a strong brand and creating endless new enquiries every month
- Sales – learning how to sell based on value (not time) and making sure every client has every service they need to achieve their goals
- Value Added Services – reducing the volume of compliance and increasing the volume of value added services that make a real difference to your clients success.
The correct implementation of each area will enable your firm to thrive in this time of uncertainty. I cover all of these topics in detail at my Remaining Relevant seminar. So far 13 cities done, 8 more to go. We have had 1,608 Accountants register / attend so far. Last cities in July in regional Australia. You can register here