In January I finished three fascinating business books, they made me think about the strategic options facing the accountancy firms we consult with!
Chances are this is relevant to your accountancy firm too.
By suggesting just four strategic options, I know I’m simplifying the complex. But see if this helps your thinking, and helps you plan for 2015…
- Do compliance work fast and well
- Provide useful management information in a timely way
- Help reduce tax bills
- Provide business growth guidance
Here’s the four in more detail…
1. Do compliance work fast and well. All firms are committed to do a lot of compliance work because this is the work accountants do! Competitively though, your challenge is that all your competitors do the same work as you.
Doing it fast can give your firm a competitive edge. Especially when compared with firms who are completing and filing accounts at the 9-month deadline, or completing tax returns on the 31st January.
Better relationship management around compliance work can also set you apart. The thing is most firms are focussed on doing the technical work rather than improving the relationship work.
But if you’re losing work on price it’s because your competition are busy undercutting you. And your clients and prospects see no other reason to stay with your firm.
You can’t influence what your competitors are doing but you can give clients other reasons to stay with you. Be seen to do compliance work faster and/or manage the relationships better and you could keep and win more work and more fees.
2. Provide useful management information in a timely way. Most firms do some management accounts for some clients but it’s typically a modest percentage of clients. And typically the management accounts are left for the business owners to interpret themselves.
Where we see firms doing management accounts well, their clients appreciate the insights and value the service. And this level of involvement raises the pricing expectations of clients.
A handful of firms are genuinely committed to providing management information to all/most of their clients. This approach positions these firms differently to most other firms and gives them a competitive advantage plus a pricing and profitability advantage.
3. Help reduce tax bills. Business owners see tax-reduction as an expected service, something all firms do. However this can provide your firm with a competitive edge if you are great at demonstrating to business owners the level of tax savings made. And of course this can position the firm so that higher fees are gratefully paid.
If there’s a challenge with a strategic tax focus, it is current attitudes to tax avoidance. Actively promoting tax strategies (as opposed to tax savings) is likely to attract unpleasant attention from the press and HMRC. When successful, tax strategies can be lucrative but have long term challenges on client relationships and are now being reflected in increased PI premiums.
4. Provide business growth guidance. A modest number of accountancy firms are committed to providing genuine business growth guidance.
The firms that do it well earn a pricing premium and earn a trusted adviser place in their clients’ hearts. We see firm’s with a business advisory approach earn premium prices for compliance work as well as the advisory work.
Business advisory work is not without its challenges. Finding people to deliver it is an issue, which makes scaling it a challenge. But what’s clear is that firm’s committed to this approach recruit and develop people to make it happen.
February can be a time for reflection after a hectic January.
So when you consider the four strategic options above what does it make you think? What discussions with colleagues does it make you want to have? What actions does it suggest you take?
Why not post your thoughts or questions here or on the LinkedIn post and I’ll be happy to comment and help.
Every success for 2015. For more vital business insights please read our latest blogs here.
Creator of ‘Business Bitesize’ – cultivating a greater flow of new clients for your accountancy firm through profitable word-of-mouth – BRAND NEW WEBSITE – http://businessbitesizeforaccountants.com
Author of ‘Bamboo Marketing For Accountants’ – the route map to marketing success for accountants in practice –http://www.bamboomarketingforaccountants.com/