Challenges Faced by Businesses Today
Access to finance has remained a significant challenge faced by small businesses in America in 2019. While 32% of small businesses financed their company needs through business earnings, 31% through credit cards, & 29% through large or community bank loans, nearly 27% of businesses surveyed by the National Association of Small Businesses [NSBA] claimed they were unable to receive the funding they needed.
Additionally, the lack of necessary funding is a hurdle in recruiting the right talent. Rising costs of health insurance benefits and economic uncertainty have resulted in a scarcity of qualified/skilled workers. With increased emphasis on advisory services and strategic thinking, accounting firms should consider new small business solutions to smooth the road ahead.
Technology Driving the Change
Today, we’re part of a digitally connected ecosystem where technology is being leveraged to perform more compliance-related tasks. Technology is reducing the time spent on labor-intensive and time-consuming tasks, allowing CPAs to shift focus to advisory services and value-added strategic input.
Consulting & advisory services command high fees and high hourly rates. For instance, your firm might spend about 8 hours developing a brilliant tax structure for a client which saves them $75K/year while commanding $25,000 in fees in the process. These types of high fees simply are not attainable performing traditional assurance and tax compliance services that clients have come to expect from your firm. The focus is changing from laborious work to working smartly.
What should your firm invest in?
1. Focus on marketing
The same marketing strategies that worked several decades ago aren’t going to cut it anymore. Millennials and GenX, are perpetually connected and reaching them requires an omnichannel digital presence.
The first thing most people check these days is your website. Creating relevant content for the website is a priority. Pay for the expertise and get it done professionally. Your website is the face of your brand. Running social media advertisements also offers significant reach.
2. Train Personnel
Most CPA firms today require a college degree or formal training relevant to the position. With corporate firms offering multiple verticals to scale and new opportunities for their growth, CPA firms need to rethink their recruitment strategy. This translates to training existing staff and new personnel.
Automation will reduce the need for lower-level accountants, however, evolving client demands for expert data analysis will increase the need for experienced CPAs. It is increasingly imperative CPAs know and understand how to get the most out of technology. Training must encompass analytical thinking in addition to technical know-how. An effective way to do this is through computer simulations.
Offering training and promotions help small businesses retain employees: businesses offering neither are twice as likely to have an average tenure of less than those offering both.
3. Networking, Building partnerships
One of the best ways to boost your company’s presence is to get out there and market your services. You can start with a list of all the events that your company should attend for that financial year.
Start by fixing a budget for such activities. Clients will always want other services such as lawyers, financial planners, etc.. Building relationships with other businesses will be a mutual source of new clients. This will foster long-lasting partnerships that deliver a high ROI.
4. Personalize Relationships
In an industry that is as competitive as accounting, the key differentiator is personalization. Returning calls and emails, sending birthday and holiday cards go a long way in cementing business relationships.
Your clients need to understand that your company doesn’t just care about driving revenues but also genuinely cares for its clients. Spending the money and time on clients now will pay off in the end.
5. Leverage technology
Staying abreast of the latest technology is necessary for growth. About 1/3 of small businesses expect to implement some kind of automation in the next year with just 9% saying it will reduce the required number of employees while 24% say this will result in an increased need for employees, according to NSBA.
The road ahead
The above figures and suggestions go to show that CPA firms stand to better serve clients by providing higher-value services that save clients money and command higher premiums. Better yet, clients will gladly pay for these consulting and advisory services while CPA Innovations allow you to cut costs of the services they’ve come to expect as standard from you.
These types of fee structures just aren’t achievable by providing standard tax and accounting services which is why a partnership with us is key to your future. Consulting services can be one-off projects or ongoing services delivered on a retainer basis.
Looking for help in transforming your accounting firm? Please reach out to us today for your free consultation.