How to Future Proof Your Accounting Firm
Dating back thousands of years to ancient Rome, Egypt, and even Babylon, accountancy is one of the world’s oldest professions. Better yet, in the last 100 years or so, it also became one of the most reliable professions: accountants are essential to modern businesses.
But that’s all starting to change.
Today, computers have advanced to the point where they can perform many aspects of an accountant’s job faster, better, and at a lower cost, which is threatening to make much of this once tried-and-true profession obsolete.
As a result, accountancy firms are faced with a choice. On one hand, they can stay stuck in the past, largely doing things as they always have while competing for a shrinking pool of clients. Alternatively, they can look to the future, seeking out ways to adapt, do things better, and, most importantly, find new ways to provide value to their clients.
While you can’t predict the future, you can look to it with confidence as opposed to shying away from it – and proof your accountancy firm against whatever’s lurking around the corner in the process.
So, with that in mind, here are 10 ways to future proof your accounting firm.
The first and most important way to futureproof your accountancy firm is to increase the number of services that you offer. If you’re like the majority of accountants, most of your income will currently be generated by compliance work. It’s usually the first thing that comes to mind when people think of accountants. As a result, your clients may assume that tax planning and preparing financial statements is the only way you can help them.
However, advances in technology, like cloud computing, machine learning and artificial intelligence (AI) means that compliance work is becoming increasingly commoditized. There are already companies that harness this technology to offer cheaper accounting services and as technology advances, more of your potential customers will opt to use them instead of you.
To combat this, you need to diversify your offerings, and the smartest and most lucrative way to do this is with business advisory services. You already have an intimate knowledge of the way a company operates and a strong handle on what separates a successful business from their competition.
This means you’re in an excellent position to advise your clients on how to grow their business. This includes general strategy, their plans for expansion and acquisition, accurate budgeting and forecasting, cash flow management, and so much more.
Offering advisory services helps you make the shift, in your client’s eyes, from a limited, technical resource to a trusted, multi-faceted advisor who they can consult with for a variety of their business issues. Your value has then grown way beyond tax season and you have an opportunity to generate more income all year round.
Best of all, even with the rapid pace of technological change, computers are a long way from being able to replace the wisdom and experience provided by a knowledgeable, business-savvy accountant.
While some accountancy firms aren’t accustomed to, or comfortable with marketing or selling themselves, as we head into the future, it’s going to become mandatory. More specifically, it’s going to be crucial to create a comprehensive and consistent marketing plan.
Marketing allows you to create an identity that will help you stand out in an increasingly competitive marketplace. It will also help you explain to potential clients why you’re better than the increasing number of budget accounting options.
Now, while on one hand, there are offline marketing options like networking, it’s important to become better at digital marketing practices like SEO, pay per click (PPC), building a social media presence, and content marketing.
Content marketing is the process of creating informative blogs, videos, email courses, and downloadables that prospective clients will find useful. It provides an excellent way to future proof your firm in two ways. Firstly, it’s a way to easily show off your firm’s expertise – especially when you’re launching new services. Secondly, it’s cost-effective: when you’ve created a piece of content, it will continue to help attract potential clients to your firm.
Heading into the future, if you want to protect your firm, cybersecurity can no longer be an afterthought – it has to be a priority.
For a start, clients are becoming increasingly cautious after high-profile hacks like Sony, Facebook, and Equifax and are concerned about their data. Plus, because of the highly-sensitive nature of said data, accountancy firms and similar financial institutions are especially attractive to hackers and other cybercriminals.
Worse still, because larger institutions like banks, government agencies and the biggest accountancy firms have bolstered security, cyberattacks on small to mid-sized companies are increasing – as criminals are having to set their sights elsewhere.
The first step to fortifying your firm to increase both your and your employees’ awareness of the types of security threats that are out there and the forms they can appear in. This includes phishing attacks, malware, ransomware, and hacking.
Next, undergo a thorough assessment of what potential holes in your security system. Common vulnerabilities include outdated software, predictable passwords, and forwarding work-related emails to personal accounts.
Lastly, invest in the appropriate tools to boost security measures. As well as protecting computers used in the office, you need to secure every device used to access your network, including smartphones and tablets – which are often overlooked and can be the most susceptible to cyberattacks.
Harness the Power of Technology
It’s pretty ironic that making better use of technology is a crucial way of future-proofing your accountancy firm – when technology is one of the things you’re proofing your company against! But it makes complete sense. If you can find ways to take advantage of the huge variety of software that’s available, you’ll work more efficiently and could potentially save significant amounts of time. This, in turn, will allow your firm to take on more clients, invest more time in innovation and professional development, and ultimately become more profitable.
To get started, examine your workflow and most frequent business processes. What are you spending the most time as a business? Are you doing them in the best way, or are there quicker methods? Which tasks could be automated by software?
From there, start looking at your software options and match them to your needs. As well as applications for better carrying out client work such as accounting, cash flow management, financial modelling software, etc., research software that allows you to better run your firm like company practice and project management software, collaboration tools, etc.
Now, admittedly, this can be a little time-consuming – perhaps even tedious, if you’re not fond of technology. However, when you consider how much time just one of these applications can save you and how much extra revenue they could help you generate, the juice is most definitely worth the squeeze.
Keep an Eye on Trends
For your accountancy firm to continue to thrive, it’s important to keep an eye firmly fixed on the future. This requires being up-to-date on emerging trends, both in the realm of accountancy and related industries that influence it.
Starting with happenings in the accounting industry:
- Which beneficial developments has your firm yet to get behind?
- Is any of your competition more ahead of the curve and what effect is it having on their business?
- Which accounting firms do you constantly hear about and why?
- What are most successful accountancy firms doing that you’re not?
Subsequently, what’s happening in other industries that could potentially affect your accountancy firm? Let’s take the IT industry for example. It’s now clear how technologies like AI and machine learning will continue to affect the accountancy industry, but what about cryptocurrencies, blockchain, smart contracts, and the internet of things (IoT)? What affect could they soon have on your business? It’s definitely worth investigating
Now, because the idea of emerging trends is so broad, attempting to keep up with them can be overwhelming; so it’s best to have a system. You could, for example, establish a forum on which you and your staff can post items of interest. This could be paired with a ‘trend discussion’ meeting that takes place weekly, monthly, etc. – depending on how much you have to talk about.
Create a Culture of Innovation
After identifying trends, you’re going to have to work out how to best apply them to your business, so you’re constantly going to practice innovation. The more you attempt to innovate, the easier it’ll become to implement desired changes in your accountancy firm. Innovation will become part of the culture within your company and you’ll be able to face the future with more confidence.
The best way to create a culture of innovation is to consistently ask your staff about their ideas. Firstly, they’re on the front line, so to speak, as they’re always in direct contact with your clients. More importantly, each one of your employees can offer a different perspective. This is especially true of newer employees who can make up for their relative lack of experience with modern insights you might be privy to. They could be less resistant to change than your more experienced employees, infusing your firm and with a spirit of flexibility and adaptability that’s crucial to innovation.
Also, when one of your employees comes up with an innovative idea, give them ownership over it. Let them take charge of its implementation while you support them in any way they need. Not only will that person be inclined to work harder on making their idea a success, they’ll appreciate the vote of confidence and recognition of their ability – which will motivate them further. Better still, your other employees will take note of this, which will spur them on to propose ideas of their own. Before you know it, innovation will be woven into the fabric of your accountancy firm.
Invest in Training and Professional Development
Investing in both your and your staff’s professional development is a sure-fire way to future proof your accountancy firm. Continually seeking out training opportunities makes you more competent and enables you to provide more value for your clients. Plus, frequently looking for and enrolling in the latest professional development courses is a great way to abreast of the latest trends within the accountancy and financial industry.
Start by prioritising whatever professional development allows you to successfully roll out new services. In the case of advisory services, for instance, this could include data analysis, strategy and general business acumen, and communication skills for accurately conveying what you’ve learned about a client’s business.
This is especially true for less experienced employees who haven’t built up their business knowledge from years of dealing with clients. So to speed up the process, they could go on courses to help them build their business acumen.
Lastly, as you’re going to have to become proficient with increasingly more software and technology as we head into the future, it’s wise to invest in the necessary technical training in order to use it. Not only will you and your staff feel more comfortable with each additional tool you’ll use but it’ll be easier to make sense of future technological advancements.
Identify Your Biggest Weakness
Seek out the weak points within your accountancy firm and develop a plan for systematically fixing each one. Now, as already discussed above, chinks in your armour could include not offering enough services, leaving you vulnerable if demand for them suddenly went down. Another common weakness that we briefly covered is your cybersecurity. Similarly, many accountancy firms have an inadequate disaster recovery plan, in the event your firm’s security is breached and you’re the victim of a cyberattack.
However, to future proof your firm as much as possible, you need to conduct a thorough assessment, or audit, of your company and determine where your weak points are. From there, you can start to make the necessary adjustments.
For example, as opposed to a particular service, are you overly reliant on a small number of clients – or maybe even a single client? Similarly, are the majority of your clients in a single industry? Or, are there skills and competencies within your firm that are only held by a single employee? As a result, does your firm struggle if they’re away? What would happen if they left the company?
Asking questions and running scenarios like this aren’t comfortable or easy, but they can highlight weaknesses that you wouldn’t have otherwise identified.
Get Comfortable with Remote Working and Virtual Employees
Now, no doubt, you’ve had some experience of working from home – every accountant takes their work home with them during tax season, right? However, advances in technology, namely high-speed internet and portable computers, have made remote working more feasible and more commonplace. Then, of course, 2020 came along and forced every company to quickly get on board with remote working – or risk having to close their doors altogether.
But there’s another aspect to consider when thinking about remote working and that’s the concept of the virtual employee: someone with a particular skill who you hire on a contract basis. The main advantage of virtual employees is that they can be based anywhere on Earth.
This means that you’re no longer restricted to employees who live within close proximity of your firm. You’re also no longer handcuffed by local, labour skill shortages – you the entire world’s talent pool at your disposal. Better still, you can benefit from the lower labour costs in countries where it’s cheaper to live
Virtual employees could include virtual PAs that take care of day-to-day admin, coders, graphic designers, writers, video editors, and even accountants who are based overseas! Virtual employees not only make it easier to keep your costs down but they make it easier to get your ideas off the ground.
Listen to Customers
And lastly, one of the most effective ways to future proof your accountancy firm is to simply listen to your clients. By consistently getting feedback from your clients, you’ll not only learn things that will help you to retain them long-term but that you can also use to better connect with prospects. Your clients will feel more appreciated, valued, be more loyal towards your firm and will be more receptive to hearing about your new services. They will also be more likely to refer your business.
In order to gain this invaluable feedback, don’t wait for clients to give it to you, be proactive and ask for it – and ask regularly. You can achieve this in a number of ways including surveys, questionnaires, or even a quick poll.
Insightful questions could include:
- What do they like about doing business with you?
- How you could their experience as a client be improved?
Which additional products and services would they like to see?
One of the most opportune times to get some feedback is when you’ve just had an interaction with a client and the experience is still fresh in their memory. If the reviews are favourable, you’ll gain some reviews or testimonials that you can use in your marketing to attract more clients.
If they’re not so positive, on the other hand, you now have ideas for how your firm can improve. Best of all, the chances are that most of your competition won’t be doing this; most businesses are wary of ‘bothering’ their clients or, more commonly, are scared of bad reviews. But those bad reviews often contain gold.
While it’s impossible to predict the future, it is indeed possible, and highly advisable, to prepare for it. By future-proofing your company in the 10 ways outlined in this post, you’ll be moving with the tide instead of against it. Best of all, while some of your competitors may be struggling to survive, you’ll have put your accountancy firm in the best position to thrive.