For larger, well-established accounting firms, remaining one step ahead of the new practices “on the block” is an age-old challenge – one that is increasingly complicated by today’s fast-paced, technology-driven economy. Long considered recession proof, tax, audit and advisory firms are now being tested like never before to employ a quick, meaningful and well-coordinated response to diverse client needs.
At a time when entrepreneurial businesses are on the rise in record numbers, larger, well-established accounting firms find themselves perplexed – how do we compete against smaller, more nimble firms for business? Some of these answers, my friends, are in the How to Keep Pace and Compete Against the Agile Practice, a practical guide compiled by the cloud-based accounting software company XERO and AccountingWeb.
Among the tips for evolving in this new era are keeping abreast of the latest technology, serving clients of all sizes and needs, conducting on-going thought-leader research and networking, networking and networking. Did I mention networking?
In key parts of the country, self-employment and small business registrations are on the rise – shoring up their position as the backbone of the economy. And just like the established firms of today, these are the thriving businesses – and niche service groups – of tomorrow. Regardless of their size and revenue now, the accounting needs of these startups cannot be minimized or overlooked.
Accounting firms must take a long, hard critical look at the industries they’re currently servicing and determine how they can expand their reach from the ground-floor-up with smaller, new emerging businesses. This is the very same formula boutique accounting firms are utilizing to compete and win assignments. The secret to their success: they are expert generalists who adapt to a client’s culture by providing a customized service approach.
Larger firms can do the same as long as they think like these clients think and talk their talk. In addition, personalized access can be achieved quite simply by designating a highly competent junior-level staffer as the primary point of contact. Once again, such measures are a win/win: the client has access to large firm resources/small firm value, the junior team member is empowered by professional leadership and growth opportunities and the accounting firm grows its revenue as the client grows its business.
Cultivating and building niche service groups, as an offshoot of these emerging business industries, also pays off. Most of the stalwart service industries operate on a cyclical basis. Just in the past couple of years, industries like real estate, hospitality and manufacturing/logistics have undergone a resurgence while technology and life sciences have advanced to the head of the class, so to speak. Today’s developing businesses – the ones that are home-based or part of a broader think-tank – have the potential to be the lucrative, front-runner clients of the future.
Just as small business is the backbone of the economy, core accounting work and general expertise are the foundation for cultivating new lines of business. So does networking and you can’t have one without the other. Sure, your clients will give you referrals, but that is not enough.
This is where interpersonal skills come into play. Meet with people – have lunch with them, take time to talk at industry events – to solicit their opinions on the state of their industry. Where have they been? Where are they now? Where are they going? What is their greatest challenge? Also, don’t overlook the innate value in “surveying” key gatekeepers, such as bankers, lawyers and other related professionals. Start the dialogue and keep it going. Like all things in work and in life, this takes a conscious effort but the ROI will be tenfold.
While there isn’t any secret sauce or magic pixie dust when it comes to being adaptable, large accounting firms must adjust their sails if they have not done so already. Competing against smaller boutique firms – many of which are led by former principals at larger firms who are filling a gap – for future business is not a phase. Healthy competition is good and only the most agile will survive.
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By Kyle Braun, CPA, CGMA
Senior Accountant
WithumSmith+Brown, PC