Diversifying your accounting practice is a matter of growth and, within years, possibly a matter of survival. New technologies are freeing up accountants to spend less time tied up in data entry and details. Many of the most time-intensive tasks CPAs once faced are gradually having their difficulty trivialized. Times are changing.
Fortunately, your accounting practice has far more to offer clients than bookkeeping and tax preparation. As new technology creates new opportunities, investigating a variety of different ways to diversify your practice is essential to being proactive about adapting to the changing market.
New Technologies Open Opportunities
It’s easier to adapt if you have a better idea of what’s ahead. In an increasingly connected, increasingly mobile world, people expect to be able to access everything online. And the cloud now facilitates that kind of transparency between businesses and their clients in virtually all parts of the global economy.
Currently, cloud computing has had an impact across a wide range of industries, from ecommerce to manufacturing to software-as-a-service (SaaS). As a result, these industries changed the way they do business, adapting to the changes that have occurred as a result of adoption of digital technologies.
These changes have been increasingly more present within accounting. At this moment, cloud support is headed into the territory of payroll solutions, bank feeds, electronic payments, and virtually every place where digital transactions occur. And these are only the first changes of many to come.
Diversifying for the Near Future of Accounting
In the near future, developments in machine learning will provide greater insights into big data. Trends that could formerly only be identified by data scientists will become increasingly identifiable by artificial intelligence (AI).
What does this mean for accountants? With technology helping to automate some of the more time-consuming tasks, accountants will gain more freedom to tackle roles that require a greater degree of strategic and critical thinking in an advisory capacity. Accountants are then spared from the minutia of recordkeeping and data entry.
With the increased availability of productive time, accounting practices are well-positioned for a diverse range of advisory roles. Such strategic and higher-level advisory services provide clients with enhanced understanding and greater control over their finances — and cannot be replaced by AI or other software solutions.
Accountants are already the de facto chief advisor for many small businesses. That makes CPAs uniquely positioned to help fulfill a variety of business needs beyond basic accountancy. Rather than preparing financial reports or handling errors, accountants will increasingly be involved in creating growth strategies, or otherwise providing guidance and advice for business decisions.
Diversify with Value-Added Services
Small businesses often need capital. But roughly four out of five small business loan applications are denied. According to the Federal Reserve, these borrowers are spending two dozen hours on average in preparation. Already being familiar with a client’s financial circumstances, accounting practices are readily equipped to help.
Facing slim odds in obtaining a loan and hemorrhaging time, small businesses owners often find the loan application a daunting process. Loan advisory services solve these problems by introducing a client to loan products options, and then help prepare their application. It’s these types of value-added services that can help grow the relationship between client and firm.
Consider Valuation Services
Across all industries, public or private, companies need valuation. Clients may need valuation for creating an estate plan, seeking financing, or negotiating a sale or merger. Valuation is also involved in divorce settlements, insurance claims, business disputes, and bankruptcy protection.
In short, small business owners need planned acquisition structures and cash flow forecasts. And for these types of sensitive financial matters, they need an advisor whose judgement they can trust. That’s why client relationships are the gateway to these types of close advisory services.
Friendly Reminders for Compliance
CPAs are all too familiar with helping clients navigate tax revisions and ever-changing regulations. But many small businesses face additional barriers for legal compliance. That may include things like state legal filings, annual reporting, and change reporting.
Late filing can cause fees to accrue, or legal issues to mount. A helpful reminder to your clients can be a simple yet direct way to increase the value of your business relationship. Even the challenge of issuing reminders becomes simple when paired with the right client accounting services.
Keep Pace with Technology
Cloud-based services were adopted by leading firms nearly a decade ago. In the time since, technology has improved — and continues to do so. These technologies provide fairly clear competitive advantages for the moment, and may soon be essential for doing business. In any case, it’s important for an accounting practice to have a strategy in place now for taking advantage of these changes.