FOR AMBITIOUS and entrepreneurial managing partners battling to grow in a shrinking marketplace, the bottom line is harsh but simple: competing on price is a short-cut to nowhere.
So why do many practices cling to a traditional model where accounting is sold as a commodity, and where high-volume, low-yield services are still championed as an organisations’ best hope for growth? They’re not. They’re driving value out of your business and, worse still, they’re damaging your multiple. If you do the maths – and, after all, it’s what you do best – the long-term forecast doesn’t look good. The current approach simply doesn’t add up. It’s time for a paradigm shift in the accountancy model. It’s time to optimise technology and align for growth – before your business’s days are numbered.
The profession’s continued focus on delivering management accounts and assuring clients’ accounting compliance is, quite literally, the law of diminishing returns. From tax returns to VAT returns, the dependency on providing reactive compliance-driven services could push some practices to the point of no return. So why persist? One possible conclusion is that you just don’t want to grow. Most likely, however, in a crowded marketplace, it’s that – perhaps – you simply don’t know how.
The key to long-term growth is to transform the old-school model to create a partnership approach that not only provides added-value for your clients, but can also bring value and scalability to your practice. The answer? Don’t compete on price – compete on service. Move beyond the maths, the box-ticking exercises and the standard compliance-led processes – and instead harness the specialist expertise and insight within your organisation, by offering strategic accountancy services rather than basic bookkeeping. And if you underpin your approach with the optimal use of leading-edge, disruptive technologies, the long-term value of your business will undoubtedly grow.
The most progressive practices are becoming much more commercial. They’re improving client engagement and encouraging customers to become more proactive in how they run their businesses, offering on-going dialogue and strategic advice to help them make and save money. What’s more, they’re seeing technology as the great enabler – optimising the benefits of cloud-based tools to empower their accountants with real-time access to accurate and detailed client information, and using it to inform strategic advice. The approach is transforming the client/accountancy relationship.
Sounds simple doesn’t it? That’s because it is… if your organisation is aligned for growth.
Aligning for growth
The question for managing partners is simple: is your strategic plan underpinned by technologies, people and systems that can drive long-term growth? Moreover, are you optimising technology and automating processes that can help you transform your operating model and develop revenue streams beyond the delivery of accountancy-as-a-commodity?
In a corporate environment dominated by the need to deliver productivity and efficiency gains, cloud, or online, accounting can help practices increase capacity and drive revenue. It can also be a scalable option that allows firms to be flexible for growth without the risk of disproportionately increasing overheads. But managing partners need to conduct an operational review to ensure their strategic vision is aligned with, and underpinned by, the most appropriate technologies.
Strategic vision: seeing the future
The most progressive and entrepreneurial practices will be those that create a strong vision for growth, supported by a clear roadmap of milestones, processes and timelines to achieve it. Critically, the vision will examine and outline how technology can be optimised to help meet strategic goals – and identify internal and external partners to help inform and deliver the vision.
Equally, specialist support from third parties can make all the difference. The best partners will work collaboratively with your internal team to develop and execute a robust implementation plan that sets clear objectives, manages expectations and delivers measurable progress against structured timelines.
A disruptive influence
The bottom line is that so-called disruptive innovation does not have to be disruptive. Ambitious accounting practices can no longer afford for the imaginary pain of implementation – and the well-established challenges of changing cultural mindsets – to be a barrier to progress. With the right support, it doesn’t need to be.
Barbara Kroll, managing director Twinfield UK
The Practitioner’s uncensored thoughts come from within their own practice – having left a regional firm in the heart of England
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