The changes rippling through the accounting profession is a hot topic. At this point, the traditional compliance firm is rapidly becoming a thing of the past. So where is the future of accounting heading?
Technology, the pandemic, and working from home forced firms to change their business model. Consider it a professional evolution—adapt or become irrelevant.
History is littered with professions that failed because they didn’t adapt. One example are travel agents. Priceline disrupted the industry when it arrived on the scene in 1997. Once travelers could DIY their bookings, no one needed travel agents.
What does the future hold for accounting firms? There’s a lot of talk about emerging trends—here are 8+ for your consideration.
What’s hot for firm owners
Google “new trends for accounting firms” and the first page fills with information about the new direction for firms. This starts to answer the question about service options for growth-minded firm owners.
Client Advisory Services (CAS), topped the list. No surprises there. Going this route leads to 10-15% growth. Way more than traditional areas such as tax, bookkeeping, and audit which tend to be 6-8%.
Additional emerging trends for accounting firms include international tax, wealth management, cryptocurrency, and security.
Niche or specialty
Differentiation is key. First, your firm decides which service to develop. The next decision determines whether your firm chooses a niche, a specialty or both.
Those terms are often used interchangeably. However, they are complementary, but not the same.
Niche. This answers the question about who you serve. Choosing a specific industry is the common answer—this defines the demographics, but consider going beyond the demographics to psychographics. This details the personality and characteristics of the clients who are a best fit for your firm’s culture.
Specialty. Your firm’s specialty explains what you do. Rather than list all the various services your firm offers, start to consider the outcomes and benefits. This flips the focus from what you do to the problem your firm solves.
An advanced move is to future focus your specialty. With this approach, you tap into the transformation. This describes the change your client enjoys because of your specialty.
The most profitable firms develop a specialty for a narrow niche. For example, my company, Business Success Solution, shows accounting firm owners how to double revenues and lighten their workload.
Adding a new service line
Now that your firm’s decided which service line to add, strategy is next.
The logical approach is linear thinking, where you consider your firm’s current operations, then plan out how to integrate the new service line into your existing business.
Known as reverse engineering, starting with the end in mind disrupts your current thinking process. Envision what you want to achieve, then work backward to your firm’s current operations. Since it’s not linear, you’re likely to reveal new insights that would otherwise be overlooked.
President John F. Kennedy applied this approach when he declared the United States would win the space race. Putting a man on the moon was a long shot. Some of the materials and engineering didn’t exist when he made that promise; they still needed to be invented.
His team of advisors worked diligently to turn his vision into a reality. Being the first nation to land on the moon was rich with meaning and purpose. As you know, the impact would extend beyond Kennedy’s lifetime.
How does this apply to your firm? You don’t need all the steps to get started. All you need is a crystal clear vision, then consider who you need on your team to ensure success.
Roll out your new service line
Not everyone’s going to ideal for your firm’s new venture. Who do you want to serve? Clarify the type of client who will value your firm’s new service line.
Firm owners tend to consider the demographics, but overlook the psychographics. Psychographics define the qualities and characteristics of your best clients. If you want to intentionally attract clients who align with your firm’s culture, then tap into the personality of your quality clients.
Targeted marketing grabs attention and differentiates your firm. For best results, the content focuses on things that appeal to your quality clients. As a result, your message grabs attention and differentiates your firm.
Sharing too much about the tasks and services can be a turnoff for high-value clients. Outcomes have a higher value than workflow, so educate your clients about the solution your services offer.
Final words to expand your offerings
Clients don’t buy time; they invest in solutions. You may have heard of value pricing. With this price strategy, the fees reflect the value of the solution.
Unlike the traditional hourly rate or fixed fee, you price the output instead of the input. Time and costs are more important to you than to your client. Firms that value price earn two to three times more for the same service than similar firms that continue to charge a fixed fee or an hourly rate.
Choose a new service line that is a fit for your firm, then reverse engineer by defining the vision of your firm’s future. Next, define who’s a quality client for this offering. Tap into the solution that clients are seeking and will happily pay for. New opportunities will emerge as your firm’s new service line grows.
