It’s fair to say that the past 12 months have been turbulent for accountants and their clients. With Covid, Brexit and their accompanying disruption, accounting firms must carefully consider how to win new customers, retain their existing ones and stand out with their service offering.
Here are some practical steps practitioners can take to get ahead and carve their niche…
Reconsider your billing
Fixed billing and/or hourly rates have been the industry standard for as long as there’s been accountancy.
While it is often the agreed upon approach, it actually harbours many disadvantages for accountants and it can fundamentally inhibit growth. This is because it presents a conflict between generating profit, providing value for money, and working more efficiently.
A better approach is value pricing, which assigns the price of a product or service according to its perceived value by the customer. It doesn’t calculate prices by the hours taken to deliver the service, or existing market rates. By removing the focus in billing from timesheets to providing business value, you’ll benefit from increased revenues and deeper client relationships.
This is both more lucrative for you and fairer for the client: in many cases, they’d rather receive money-saving insights than billable hours.
Track the right KPIs
2020 has been a year for reassessment for most businesses. So this is a good time for firms to reassess their metrics and how these might have changed in recent months.
Take a look at the following metrics, alongside traditional financial measures, to ensure your practice is capitalising on opportunities in a timely manner:
- Churn vs. new sign ups: Insight can be a key differentiator when competing for and retaining clients. These clients leave service providers for all sorts of reasons, but if firms are able to track customer wins versus losses, they’ll gain a better understanding of the correlating factors which underpin these peaks and troughs. As retaining customers is typically much less expensive than acquiring new ones, this insight will help management to hang on to more clients for longer. While this can be done manually, specialised data analytics solutions can effectively map the customer journey.
- Account management: Capacity vs. demand: It might seem counterintuitive to spend time and money on new hires to remain competitive, but as firms take on new customers, it’s important to have enough employees to share the load and give each client enough time and attention. This will be especially important when offering costly advisory services, where clients will expect attention to detail and personalised service from the team. If you’re not expanding your team, at the very least consider the time commitments of a new consultancy client.
- Service delivery cost: Phasing out services is a big decision, but it’s worth examining what’s working and what’s not, especially in changeable economic climates. Examine how much time is taken to deliver certain services, especially those which are admin heavy, compared to the profitability of these services. Consider what functions are draining resources, and if these can be phased out.
- Customer satisfaction: Satisfied customers underpin growth and stability, and it’s possible to quantify how satisfied customers are and if they’re likely to recommend their services to others. One well established way to do this is via a Net Promoter Score (NPS) survey, through the likes of Survey Monkey. These surveys can be automated and sent throughout the year, providing recipients with questions to answer on a scale of one to ten. This data can then be analysed and set against external benchmarks to give firms a clearer indication of their performance and what needs improvement
Become a one-stop shop
Businesses, naturally, have multiple needs, and they sometimes have to rely on numerous accounting practices to meet all of their requirements. So practitioners should consider expanding their remit beyond core accounting and tax services to ensure customers don’t have reason to stray.
Providing firms have the appropriate authorisation, additional services they could offer include those related to probate, as well as business valuations and strategic advisory. The latter of which is becoming increasingly lucrative, as more businesses seek out the counsel of their accountants to more effectively manage risk and monitor the health of their business. And with automated data entry software, accountants are spending more time on insight and analysis and less on manual data entry.
Identify your ideal customers
While, understandably, firms might be reluctant to turn down any new contract, the reality is that some customers are both easier and more profitable to work with than others. Accounting firms should consider what their ideal customer looks like in terms of size, sector and the services they require, and target customers based on these attributes.
For instance, strategic advisory work can offer high margins so customers who request these services should be prioritised - as well as ‘quick wins’ i.e. when it’s obvious at first glance how value could be driven for a prospect.
Accountancy is a service-based business with human relationships at its core. A lack of rapport or too much time spent chasing payment can often make a particular project more complex than the fees are worth. Therefore, those clients who have a flexible outlook, positive attitude and who pay on time should (in an ideal world!) be the only ones firms choose to work with.
Strengthen your marketing
A strong marketing strategy, effectively implemented, can more than pay for itself. Marketing doesn’t have to be complicated or expensive, but firms must craft their ‘brand’, so prospects can identify what their practice offers and how it’s unique.
An accountancy firm can build their following on Twitter and LinkedIn, by posting quality content and targeting businesses in the local area through sponsored campaigns and possibly advertising via Facebook Ads Manager. Don’t be intimidated if this is new to you; B2B social advertising is user friendly. A well maintained company blog will do wonders for search engine optimisation (SEO), and firms can also publicise case studies here as well.
Practitioners could offer free consultations for new customers, and speak at industry events to build their profile. If possible, they could consider launching an online learning platform as a lead generation tool; posting webinars and tutorials on topical issues such as tax deductions or working in the cloud.
Save time by automating activities
Just about every aspect of your practice will benefit from some form of automation, so every department should be investigating these opportunities. For instance, a CRM solution such as Salesforce collects client data from telephone and email communications, helping to streamline customer engagement. Elsewhere, automated onboarding tools simplify processes such as issuing proposals and creating invoices.
One of the most effective and immediate ways accountants can put automation into practice, is through the elimination of manual data entry. AutoEntry helps users do exactly that, by capturing and analysing scanned and photographed bank and credit card statements, bills, invoices, receipts and more.
AutoEntry helps users to work smarter with its broad range of features. For instance, AutoEntry captures tax summaries by default and if requested, full line item details including description, quantity and unit price. AutoEntry also remembers how users categorise expenses, such as the relevant supplier account, nominal account and tax code without ever creating duplicate supplier accounts or posting duplicate invoices in accounting software. AutoEntry even matches invoices to purchase orders.
Recent months have shown that agility and innovation are not just valuable, but essential. Companies that embraced the cloud, remote working and automation were preparing for Covid without even knowing it.
When it comes to surviving as a business, providing excellent service to clients is key, but making sure your practice thrives in a competitive environment takes strong leadership and meticulous planning. Accounting firms should continuously evaluate their performance, and reflect on client feedback in order to refine their service offering.