Tax and Bookkeeping is seen as a commodity by clients. Here’s what you can do about it.

Bookkeeping, payroll, and taxes are becoming commodities.

Business is not what it used to be for accounting firms. Now clients use technology and are aware of the multitude of options available. Various service providers and off-the-shelf DIY software seem to remove the value that accountants or accounting firms provide.

A good example is employee payroll. Payroll services on the internet, off-the-shelf software, business advisors, and accountants are all competing for the same clients. Payroll service is now a commodity.

To this effect, clients increasingly demand lower prices on regular services like tax returns and audits because they don’t understand the value their accountants provide. So, to them, the judicial approach is to select the least expensive option rather than paying a premium to build a long-term relationship with their advisors. As an accounting or CPA firm, you’ve been selling hours all these years but now, there’s a change in what the business community is thinking i.e. that firms are now more efficient which means fewer hours on the job. Therefore, fewer hours should mean a lower price.

How can CPAs fight this trend?

The best approach is to provide higher-level services that essentially guide business through their current challenges and economic environments.

A good place to start would be in thinking about ways to provide value and not just services for time.

You can provide services that enable clients to make knowledgeable decisions and help them in the competitive landscape. You can use reports to draft a comparison of their current financial data with industry ratios and present a strategy to get to a stronger financial position. With sound, practical, and in-time advice, they would need a strong case to choose a cheaper service provider and basic service companies could never provide such value.

Another practice would be to automate low-value tasks that are repetitive and time-consuming. Use the time instead to focus on more value-added services and position yourself as trusted advisors. The goal is to free up more time in the day to achieve this, for which the go-to solution is automation.

Companies have already taken the leap with automation and with all the extra time available, they’re able to create better experiences for clients and create new opportunities that add value, some of which are:

• Strategic planning
• Succession planning
• Business valuation
• Cash flow management
• Mergers and Acquisitions
• Industry-specific consulting
• New business formation
• New business consultation on equity planning or to go public
• Estate planning and gifting strategies
• Bank financing
• Cash flow management

As mentioned earlier, there is a shift in the customer mindset about engaging CPAs or accounting firms. Accurate bookkeeping, financial statements and tax returns are no more an allure and won’t differentiate your services. Firms must realise that clients want expert advice and new ideas to help them achieve their goals.

This is a powerful reason to leverage technology.

Why you need to embrace technology to break away from commoditization challenges.

Cheryl Meyer in her article for Journal of Accounting elaborates on the areas that clients find valuable and what they expect from CPAs

They want CPA firms to be

• More responsive
• Proactive
• Get up to speed on the client’s industry
• Communicate more frequently
• Focus more on trends
• Be more strategic

To thrive in a competitive market, firms must stay updated with the latest technology and automation solutions to stay ahead of the competition. RPA technology, cloud storage, and providing high-value services, etc. can become the key differentiators for your firm.

With accounting regulations getting more complex each year, how can you meet the challenge?

Partners can help in your efforts to use technology to stay on path with regulations and compliance, while maintaining costs. A partner is crucial in revealing the options that are the best-fit for your business. For accounting firms, the right solutions partner should help assess various factors before implementing the right technological solutions for your accounting firm.

They should be able to factor in the following:

1. The operational costs and staff costs
2. The basis of driving revenue and the investments in technology for the same.
3. Secure solutions that help you scale with sophisticated infrastructure
4. Software solutions that integrate with your core accounting functions
5. Process automation and report standardisation
6. Integrated systems that remove silos and the tediousness of disparate software that don’t sync your data.

CPA firms must realise that a significant amount of time in choosing the right solution and the right partner can help you achieve your goals and cater to evolving customer needs, manage remote-working staff, stay abreast with technological advancements and strike a chord with clients to improve your revenues.

To know more about how you can implement the right solution for your accounting firm, to future-proof your business and create revenue opportunities, reach out to me on LinkedIn.

As a bonus, I will have an expert on board to share with you the method to analyse and clarify which services are right for your firm to offer. Discover opportunities for growth through value-added services and the solutions that can help you manage your firm more efficiently as you chart out a plan to scale your business. Invest in a partner to do a methodical implementation with adequate training and onboarding users to the new setup, but without overwhelming your resources and the business with too much, while providing full-time support.