The items cited in the AICPA’s recent “Accounting Firm Top Issues” survey are no different than they were decades ago. This is very troubling.
“Big Account Firm Issues” are Tactical, Not Strategic
Accounting firms cite the following items as their biggest “issues”: finding qualified staff; workload compression; succession planning; retaining qualified staff; and, keeping up with changing, complex tax laws. My question is….”really???” Don’t get me wrong, these are all legitimate issues for Accounting / CPA firms. However, these are tactical issues and not strategic.
Seriously, accounting firms haven’t found answers to the issues of talent management, succession planning and workload compression in the last 30 years? Where is the “big thinking”? Where is innovation? Where is just pure leadership?
The Accounting Firm Magic Bullet?
There is no magic bullet answer to these tactical issues, but there are a number of solutions that, when combined, can easily solve these issues. There is also a mindset that has to change to solve these issues. Yes, you have to reward your employees with really good benefits (that don’t always have to be costly). You have to be direct and consistent in your feedback to staff. You have to be willing to manage your firm in a way that encourages client transition to younger staff. You must have strong corporate governance that facilitates transition. Again – these are all tactical accounting firm issues. These are not strategic issues.
The biggest strategic issue for accounting firms (especially small firms) is how to not go the way of the dinosaur. That’s right – small firms have to worry about extinction. Technological and social change is upon us and growing at an exponential rate. Young people communicate differently. They buy differently. They want to be challenged more. Larger accounting firms will invest in technology to automate certain tax and audit processes. This will force staff to work upstream which is a great opportunity.
Larger accounting firms have money to invest into this new technology. Smaller firms might not. As technology evolves, it’s only logical that large firms will be able to utilize their staff in different ways, adding more value to clients and taking on more clients. Prices will likely come down. Smaller firms will face tougher price and efficiency competition.
What Accounting Firms Should Do
Some will scoff at my predictions. They shouldn’t. This is the new reality. I don’t have all the answers, but if I’m a smaller accounting firm, I would focus on the following:
- Differentiation of services – Think software sales, bookkeeping, outsourced accounting. These items all have a personal component that will likely be important well into the future.
- Create a plan to be strategic about the future – The items are on the table. Be strategic about how to overcome the challenges in the future.
- Fix the current “tactical challenges” – Yes, firms worry about staffing, compression, etc. Fix it. These are tasks – not strategy. Deal with it so you can focus on other things.
- Be bold – Be the leader. Brand yourself as an accounting firm that is on the leading (maybe “bleeding”) edge. Use social media effectively. Tell everyone how you are overcoming. It will draw in new business.
- Learn – Continually challenge yourself to understand what’s going on in the market.
The accounting firm profession is changing rapidly. If you don’t make a bold move and get out in front, you will lose. It’s that simple. Embrace change! Be the disruptor, not the disrupted.