For most small practices the majority of the year is spent running from one deadline to another, making sure clients don’t incur unnecessary fines for the late submission of documents and returns. That is not the way, now we are in 2020, of running a successful practice. There are a multitude of software providers that can help you automate even the most mundane of tasks, freeing up your time to do more important things. Who enjoys the compliance side of running a practice? Certainly not any of the 500+ clients I work with every year and the thousands of others that I know. They all prefer getting under the skin of their client’s businesses and providing real added value.
Compliance work has become a commoditised product. It is a race to the bottom – who can do it the cheapest. For those accountancy firms offering compliance work at the cheapest end of the market it is about churning out as much as possible rather than focusing on quality and accuracy.
By automating as much as possible, through the software available today, you can focus your time on the advisory side of your practice. It will set you apart from your peers. This is where the real revenue can be generated, and value can be added to your client’s affairs. Give or take, about 80% of work carried out by a practice is compliance and 20% is advisory. The key for firms over the coming few years is to increase the amount of advisory work.
Advisory services can take many forms. From business advice, consultancy and process improvements through to complementary services offered through key intermediaries, such as financial advice, wealth management, IT support and legal services. When sitting down with a new potential client talking about so many of these areas of support is much more exciting that talking about tax returns and sets of accounts. It shows where you can really add value to the client and, from a fee perspective, you have a blank canvas. You can offset what you charge against what savings/improvements/more profit you can bring to the table. This is all much harder to quantify when a client is being tapped up by another accountant. Other accountants can only quote based on binary information – simple compliance services.
To be a more advisory led practice the IT, software and systems you use need to reflect the advice you want to be giving to clients. This enables you to be forward looking by working with your clients using data in ‘real time’ rather than backward looking and using old historic data. If you give advice to clients based on accounts and returns submitted, then you could be looking at data that is as much as 9 months out of date. Who wants to make a decision based on data from nearly a year ago. With the cloud software that is currently available, all stakeholders can look at live data at the same time enabling quicker and more proactive decisions to be taken.
Continuing to be a form filler in to the 2020’s is a sure-fire way to see your practice struggle to keep pace with your more proactive peers. It is all about advisory services. Nail this down and you will stand head and shoulders about everyone around you with a thriving, growing practice.
Author: Laurence Vogel, Head of UK Operations at Informanagement UK