Building a successful accounting firm starts first and foremost with delivering excellent services to the right clients. There is no substitute for delighting clients.
When accounting firm owners get this right — the right audience, the right deliverables — growth is inevitable.
Business owners are starving for great financial assistance and will pay for it. They have goals, and the right accounting partner is an invaluable resource in their pursuit of growth.
Accounting firm Growth
The result of this is growth. And accounting firms, of course, should want to grow. According to recent survey data, 16% of advisory practices reported year-over-year growth, while 72% said they have a pipeline of prospects for expanded growth.
While growth is great, it also comes with its own challenges. As an accounting firm grows, so does its need for additional staffing. This is where the challenge comes in.
Hiring remains the biggest challenge for accounting firms, and the problem doesn't seem to be getting better.
In a Deloitte study, 82% of hiring managers reported challenges in attracting and retaining accounting talent.
In this article, we’ll explore how to merge these opposing forces. How can an accounting firm handle increased growth opportunities with the challenges of growing their staff?
Increasing Efficiency with Your Current Team
Before looking externally at growth, the first step in growth is increasing efficiency internally. The math makes sense. If you streamline workflow so that you can support additional revenue per employee, you’ll be able to grow without adding staff.
Accounting firms have some great resources available to take strides in this area.
Collaborative Technology: By equipping your firm with tech tools that work well together, you can integrate everything from banking, to transactional data, to sophisticated reporting. By taking a proactive approach to your firm’s tech stack, you remove many layers of communicating and data entry which saves significant time.
Documented Workflows: In order to streamline operations, the critical first step is to have documented processes for everything you do for clients. This includes sales, onboarding, monthly reconciliations, and the entire delivery process. When you document your workflows, you can make the way you serve clients repeatable so that your team can move quickly in delivering the proper service to each client.
Client Analysis: It’s also important to understand which clients provide the most ROI. If you have growth opportunities, a good step is to look at your current client list to see where time may be wasted. It’s highly likely you know of some clients that aren’t at the proper price for how much time they take. Maybe it’s time to increase their price, or even decide they aren’t the right fit.
The next consideration as you increase your revenue per client is to evaluate your pricing. If you are billing hourly, there is naturally going to be a constant need to add staff as you grow.
A better strategy is to implement value pricing, where you define your deliverables and attach a monthly price.
It’s important to change the mindset when it comes to pricing, focusing on the value you are delivering to clients rather than how much time it takes.
Think about it this way - if you are inefficient with process but billing hourly why should a client pay more for this efficiency? They aren’t paying for your time - they are paying for an outcome. Set the price of services, then deliver that outcome in a predictable efficient way to increase your profits.
FP&A: Level Up Your Services
Ultimately, the most profitable way to grow is to level up the services and value provided to clients. The best way to do this is with FP&A (financial planning and advisory) services.
With FP&A, you’re shifting from backward-looking accounting to forward-looking projections.
Your advisory approach is to come alongside the client and give them a data-driven path toward their targets. Why is this important? Simply put, when you deliver FP&A you can increase revenue with fewer clients, and less need for staff.
For example, think of the increased value for your clients when you provide:
- Forecasting and budgeting
- Deep financial analytics
- Financial modeling
- Strategic business planning
- Consistent, reliable, recurring insights
When you do this for clients, you move to quality over quantity. You may have less total clients, but you’re doing more for those who are ideal fits.
According to the World Economic Forum’s The Future of Jobs report, accounting, bookkeeping, and payroll clerks are among the top 10 roles expected to decline by 2022, while data analysts and management analysts make the top 10 most in-demand jobs list for 2020.
The difference? The jobs that are projected to grow focus on analysis (outputs) while the jobs in decline mostly process data (inputs).
FP&A is a benefit for your firm and your clients. They are looking for a strategic financial partner, and you’ll have the opportunity to increase revenue without always adding staff.