Top Challenges for Accounting Firms

As 2018 draws to a close, I started to research the challenges accounting firms have been facing. Here are the top 5 that continually came up:

  1. Winning the Talent War – This concern is not unique to accounting firms. Many professional service firms are facing the same issue. So  how do you win the war on talent? Learn from your current employees. Find out what they love about their job and your firm. More importantly, find out what they wish was different and work to figure out ways to enhance these areas. It can be as simple as allowing for additional flex-time or more dress down days. However until you ask and actually listen, you will never know. Always remember, a Happy Staff = Less Turnover = More Productivity!
  2. Price Pressure – In my humble opinion, gone are the days of charging by the hour.  If you haven’t made the switch already, I highly recommend looking into value based pricing. I understand that walking away from the known entity of hourly billing is frightening – this is the way we have all been doing it for years. However in today’s world of trying to become our client’s “trusted and cherished advisor,” hourly billing goes against that concept. Regardless of the work that is being done, if we lose our clients  to another accounting firm due to pricing concerns, we have failed in proving our value to our client and gaining his/her trust.
  3. Commoditization of Services – It was a bit hard for me to separate items 2 and 3 as they can easily fall in to the same category. If you’ve successfully taken care of concern #2, then you are most likely in a better place than the average accounting firm as your client’s already see the value your firm offers. and if you haven’t fully established your value than the time is upon you to differentiate your firm from the pack. How do you do that? Leverage the traits that make you different. Whether it’s the type of clients you work with or the specific skill set of your staff make sure your clients are aware of what sets your firm apart from the rest. This way they no longer look at you as someone getting the job done, they see you as extension of making their business successful.
  4. Growing/Sustaining Your Practice – One of the concerns I hear often is “How can I continue to grow my business in such a competitive atmosphere?”  My best advice is to look in three ways…marketing, fully exploiting your niche or merging with another firm. There are advantages to all of those options pending how large your firm already is and if there is a niche that you currently represent. However, the easiest of the three to undertake is marketing. Is your firm active on social media? Do your partners have an updated LinkedIn profile and post articles or updates? Do you send out any type of weekly or monthly newsletter to your current clients letting them know what your firm is up to? If your answer is no to any of those questions, I think you just found a good place to start!
  5. Advancing Technology – In this new age of Big Data, blockchain and AI, technology is an integral part of the Accounting world.  The discussions revolve around the difficulty in keeping up with technology  to the potential of being replaced by technology. Wherever your conversation falls, the most important thing that you need to understand is where technology fits in with your firm! If you have a separate in-house IT department, make sure whomever is in charge has a seat at the table during your Partner meetings and any other meeting where the future of your firm is being discussed. One of the biggest mistakes I have seen, is when IT is left out of the mix!