Go from Surviving to Thriving in 2017!!
With 2016 calendar year coming to a close, it’s an appropriate time to evaluate current Accounting trends and how they may impact your business. The 2016 Bstar Accountants Research Report provides valuable insight into the current Accounting market and the top four issues facing Accounting practices in 2016. With the market being more competitive than ever, can you afford to be lost in the pack?
The Top 4 Concerns for Accounting Practices in 2016
1. Attracting new high value business clients
At the top of all Accountant’s mind in 2016 appears to be attracting new high value business clients, increasing as a business concern by 54% from last year. Cloud technology and low compliance fees mean that practices are more than ever in the hunt for new high value business clients, which is reflected in the need and desire to transition from a compliance to an advice service business model.
2. Transitioning from a compliance to an advice service business model
With new technology and more automated bookkeeping systems, compliance fees have dropped dramatically in recent years. Now more than ever, Accounting practices must adapt with these changes and move forward with current trends and service offerings. While most if not all Accountants want to grow their business, reality is that they are unsure how to do so. As such, in 2016, more than 57% of Accounting practices now have a trusted practice adviser to assist with this transition.
3. Declining fee growth rates and profit margins
Falling from the top concern of 2015 to the third for this year, Accountants appear to be managing their cash flow more successfully, however still echo concerns about how to successfully grow fees or alternate revenue streams.
4. Capacity and time constraints
As technology and outsourcing efforts continue to go from stride to stride, Accountants are now less concerned about capacity and time constraints. The Cloud evolution has been adopted by the majority of practices however regardless of the efficiency, gains produced are still expected to be short term.
ALL Accountants admit growth planning is important NOW. So why do LESS THAN HALF have a growth plan?
There are eight strategies to growing your accounting practice:-
1. Acquisition of an Accounting Practice or block of fees
2. Marketing through lead generation and conversion
3. Increase hourly rate
4. Decrease hourly rate
5. More transactions with existing clients
6. Transitioning from time billing to fixed pricing
7. Applying the 80/20 Rule to your practice
8. Offering business advisory services.
With more than 81% of Accountants admitting they need more confidence in their ability to deliver business advisory services, it comes as no surprise that the majority of Accountants shy away from offering these type of services to existing clients. For those forward planners, Accountants that receive independent advice and support for practice planning are more successful with the implementation and transition from being a compliance based practice to an advice practice.
Don’t know how to make the transition from a compliance to an advice based practice? BStar suggests following these 5 phases:
4. Protect and Grow
Professional associations identify and recognize that there is currently a ‘high awareness but low action’ trend within the accounting industry with regards to transitioning to an advisory business model. Through our own research and BETA testing, we have found that the best tool to overcome capacity and time restraints and implement this transition is by accounting practices forging a strategic alliance with a marketing specialist.