Welcome to The Ledger where we sum up the latest finance and accounting news and trends for you. On this week’s entry, we’re diving into the topic of CPA firm growth outlook and how to navigate scaling your practice effectively. Read on to explore how to prepare your firm for a tough labor market, why your tech stack could affect your client experience, driving your firm’s growth with market research and the new normal for CPA firms.
Strategies to Prepare for a Challenging Labor Market
In a market dominated by uncertainty, it’s no surprise that firms are scrambling to find top talent. So how can businesses hire the right talent, or better yet, keep their current employees from leaving? One firm, Swindoll, Janzen, Hawk & Loyd (SJHL), took a different approach to growing their team: remote work. As Tamie Prieb, Marketing & HR Manager for SJHL, explains: “It was like an ‘aha’ moment… [we thought,] ‘we can hire Valerie from Florida. We have the technology. Let’s just do this.’” Other firms are in the same mindset as well. In fact, many are trying to convince new and current workers that a career in accounting offers longevity, balance and rewards. Mike Pharton, CPA, CGMA, managing principal and partner for Coulter & Justus, said it best: “If [firms] don’t adapt today, you’re not going to have enough people to take care of your clients. We’re being forced to adapt and evolve.” So, what are some effective strategies that firms can implement now?
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Refocus recruiting efforts. One way to do this is by connecting with local colleges and universities. Virtual recruiting is another strategy that’s worth tapping into.
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Incentivize your employees. The easiest way to attain new recruits is by having your current employees refer potential candidates for a successful hire. And according to Julie Wood, Chief People Officer at Crowe, “We want people to know: This is a long game for us. We want them to be a part of helping to shape this better tomorrow, that we have a sense of purpose in our work, that we’re focused on not just the short term but the long term.”
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Set expectations for clients. This labor market not only affects your hiring flow, but your work output with your clients as well. Make sure your clients are looped in on the timeline and aren’t kept in the dark.
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Change the mindset. The traditional 9 to 5 workday is outdated and has no place in today’s modern landscape. Leaders should “meet people where they are right now.”
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Create a path. The changes you’ll make this year should go beyond the next year. Moreover, giving your employees room for growth can ensure that accounting is not just a job, but a career.
For more on how to prepare your firm for a tough labor market, check out the full article on journalofaccountancy.com.
A Help or a Hindrance: Does Your Tech Stack Add Value? - CPA Firm Growth Outlook
Sure, the tools and resources you utilize in your day-to-day work are worth the investment as they streamline many of your processes. But while they may help you, do they do the same for your clients? Moving to the cloud and automating many low-impact processes has been revolutionary for the accounting industry and has moved many accountants into the next era of finance. But have we stopped and considered how our tools affect our client’s experience?
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Efficiency vs. experience. The tools we use should improve current processes and boost your company’s bottom line. But before you begin your search for the latest and greatest accounting tools, ask yourself, “How will this affect my clients?”
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Thinking in terms of added value. Your business benefits when work can be done faster. But that doesn’t matter to your clients. In fact, the value of the deliverables remains the same, whether the work is completed in a day or a week. But introducing technology that improves the client experience is what creates an “added valued”.
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Don’t overlook client experience. Most accounting firms are largely referral based. Which is why firms can’t afford a blunder in the client’s journey and experience.
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Don’t let your tech devalue your firm. It doesn’t matter if you’re married to your tech stack. If your client doesn’t enjoy using the tool, their bad experience can carry over to the relationship with the firm.
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Building client buy-in. Be transparent with your clients. Help them see why you’ve chosen this specific tool and how it can benefit them.
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Recognizing when it’s not working. It’s okay to admit defeat. What’s more, you should continually check-in with your clients to show that you care about their experience (while also offering training and resources).
To explore how to match your clients to tech tools that help them streamline and scale their business, head over to cpapracticeadvisor.com to read the full article.
Paving the Way to Growth Through Market Research
Who would have thought that market research could affect your firm’s performance? By the same token, how well do you even know your clients? A Hinge Research Institute’s ongoing study of professional services firms found a clear and dramatic correlation between systemic research and firm growth and profitability. The data? Those that conduct systemic research on current and prospective clients grow 3 to 10 times faster and are 2 times more profitable. So why do many leaders underestimate the importance of market research?
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Many clients don’t think it’s relevant to your work with them.
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It’s hard to see market patterns and trends when you’re up to the brim in other work.
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Your current clients don’t represent the market as a whole.
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It’s easy to put off dealing with complex, hard-to-resolve issues.
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Your staff is resistant to change.
But is it worth the investment?
The straight answer is yes. Let’s see how.
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Firms don’t know their clients as well as they think. In fact, professional services firms aren’t aware of 80 percent of their actual competitors.
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Clients who don’t want to be bothered won’t participate. Most clients appreciate being asked for their perspective.
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Investing in research no longer means taking a leap of faith. Shelling out money towards systematic research results in more innovative strategies and stronger competitive advantages.
To learn why professionally conducted research should be a part of your firm’s growth toolkit, read the full article on accountingweb.com.
Defining the New Normal for CPA Firms - Growth Outlook
Is that even possible? Since the onset of the pandemic, the world’s workforce has been in a transition period. We’re not quite back to pre-Covid days and we haven’t fully embraced the post-pandemic era either. So where are we?
Working from home. Not a new concept, but definitely one that many companies have embraced. And according to Bloomberg, “About 75 percent of the increase in telework over the course of the COVID-19 crisis will likely stick… twice as many workers will be 100 percent remote as before the pandemic.”
Accounting majors are down. Unfortunately, this is not a trend that can be turned around quickly. But there are solutions that can help remedy this situation: paying more for accounting grads, hiring non-accounting majors or waiting for a merger and acquisition to recruit more staff.
The end of organic growth. Gone are the days of traditional services. Instead, many firms are turning to advisory services like HR, marketing, operations and sales.
Will we ever return to normal? It’s doubtful. Are we in our new normal? Possibly. For more on defining normal for your CPA firm, including more information about the growth outlook, check out the complete article on accountingtoday.com.
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