One key question I seem to get asked regularly is; what’s wrong with being a compliance practice and why should I add new services when we’re already flat out? Both good questions however, with limited growth potential. Let’s consider a few key points.
Less billable hours & increased competition
While compliance has been the main practice income since … well … forever, software improvements mean that the number of errors in compliance data is potentially diminishing.
Features such as automatic coding rules and bank feeds mean human errors are slowly being eroded – which is a good thing. Accountants can also access their clients’ data directly at any time using cloud accounting.
However, there’s a flow-on effect in the practice. Accountants are now able to make adjustments to company files during the year – not just when they see their clients – and there are potentially fewer billable hours throughout the year.
Add to this the pressure of competition, and the idea of offering financial advice as well as compliance is a more attractive proposition than compliance-only. It’s clear why practices are under increasing pressure to expand their service offerings, and you’ll see this has been happening overseas for a while now.
Practices need to implement a “whole of practice” business advisory strategy. It’s no good just dipping your toes in the water. Becoming a business advisory practice requires a major commitment, but the payoff can be immense.
Three keys to success
- Identifying and solving capacity and workflow issues, to ensure service delivery is smooth and on-time
- Appointing a business advisory practice champion and ensuring their KPIs are appropriate to the role
- Committing to an implementation plan (and sticking to it) to make it all happen.
So what happens to practices that refuse to entertain a change to their business model? The answer is a “failure to implement”. Time, effort and cost is absorbed and there is little return of investment to show for it.
One of the biggest problems in accounting practices today is apathy. Practices need to get out there and prepare for the future – prepare for the greater advisory opportunities that technology is providing now and into the future.