How an Accounting Firm Can Find New Ways to Build RevenueIan McManus
Accounting firms has declined according to a report from IBISWorld (a research firm). This comes after half a decade of declining industry activity following the recession and stumbling economic recovery resulting in medium-sized firms shrinking or merging with others and causing several smaller firms to stop operating.
This has resulted in some of the largest firms reducing the services offered. Most of the firms that have stopped operating were small operators that depended on the small business market which was tremendously affected by the recession.
As for smaller firms that are struggling today, it’s important to focus on a particular industry and offer accounting-related services that go beyond audit and tax work.
Though accountants are known to handle the areas of tax and financial planning advice, many clients need help in other areas of their business. So, it’s time to think about value-added services for your clients.
Many businesses never really get themselves involved in succession planning even if they’ve been in the business for years. What they need is somebody who can lead them through the entire process. Other services that are highly in demand include estate planning, financial work, and valuation work.
Services that accounting firms may consider include:
Seventy percent of businesses in Australia are family owned. Some business owners may need the help of an accountant to help them with succession planning.
Often, a family-owned business needs lots of independent advice to resolve the many issues experienced. It is important to get those issues identified and on the table before a crisis forces urgent circumstances.
This type of service will become more in demand over the next few years. Sourcing finance helps create larger markets for clients and as a result they will demand more complex tax advice.
Sourcing finance should generate more profit and cash flow and business owners must learn how to make better decisions by developing strategies or building an investment plan for their business. You may have to prepare cash flow forecasts to support clients’ lending applications and also help them through the process of negotiation and evaluation.
Business coaching is another service that accounting firms may need to consider over the next few years. To become a business coach, an accountant needs diagnostic skills to interpret financial statements, along with their accounting expertise.
If this isn’t an area of interest to you or you lack the expertise, form a strategic relationship with a business coach and benefit from the revenue stream plus be involved in the Clients’ plans.
Providing a business advisory service can give firms a stable flow of income which means it’s more profitable compared to traditional, compliance-based accounting services.
Your accounting firm has many opportunity areas including business valuations, succession planning, forensic accounting, recruitment, staff retention, human resources, and business broking opportunities. There are many reasons why accounting firms need to transform from traditional, compliance-based accounting services to business advisory services.
Promoting better relationships with your clients and helping generate more word-of-mouth referrals is another benefit of incorporating business advisory services into your business. You can also demand higher rates when you provide a higher level of services to clients.