Top 5 Business Challenges Facing Today’s Accounting Firms
Accounting, just like every other profession, is affected by our ever-changing world. The increase in technological advances alone can leave your head spinning. Though technology endeavors to make work easier for everyone, it requires your full attention to keep up.
However, technology is responsible for numerous positive changes in every field or industry. An accounting firm can get a lot more done each day with the professional software programs now available. Many boring, repetitive jobs are accomplished with these programs and this allows accounting professionals to utilize their time on more important tasks.
Today’s technology can make it much easier for you to find new employees for your accounting firm, qualified personnel who have already been vetted. Most of today’s accounting firms have embraced the changes that are occurring in our technology-driven world. And yet, many are undergoing dramatic changes that affect their business from various angles.
From cyber threats to rising costs, the accounting industry is facing its share of tough problems. Savvy business owners overcome these challenges and move forward. They turn these problems into stepping stones that lead to new opportunities. Still, these issues can slow down the workflow and require too much attention. The struggle can be tiresome and never-ending.
Below are our top five tough problems that accounting firms face today.
1)Retiring Baby Boomers
Each year, approximately 4 million baby boomers retire. This trend is expected to continue for the next 19 years. These people represent years of training and experience. Every industry is being affected by this, including accounting. As CPA firms across the country lose these knowledgeable employees, they reach out to secure the top talent available. But this trend has created a very competitive environment where an accounting firm must be able to offer more to get those well-trained college graduates. This problem reaches across all industries today and as noted above, it will continue on for another two decades. CPA firms are trying to balance their need for the best employees with budgetary restrictions.
2)Winning the Talent War
While winning the talent war is no easy battle, there are a few options that accounting firms can employ. One of the suggestions that has worked for many firms involves enhancing your company’s brand. Highly skilled workers want to be associated with a good company that has an outstanding reputation. As accounting firms are struggling to get the best talent available, they’re realizing how important their brand is. There are numerous ways to elevate your brand and in some cases, it will benefit accountants to hire consultants who specialize in this area.
Below, are just a few ways to improve your reputation and attract those talented college graduates you need to move your business to the next level:
- Get your CPA firm involved in community activities. For instance, volunteer once a month at a soup kitchen, children’s hospital, or orphanage. Nothing speaks louder than a group of professionals willing to give their time and talents to help the poor and needy.
- Improve your culture. Many companies have greatly benefited by improving their company culture. That’s the secret behind the huge successes of Google, Microsoft, and Disney. Employees love where they work. They’re proud to say they work there.
- Create High-Profile Events. This can be as simple or complex as you like. Some business owners write a book and then create book-signing events on a regular basis. Others do webinars each month. For instance, in the accounting field, you could create a webinar each month to show business owners how to save on taxes.
- Post Good Photos of Events. Now that your company is involved in volunteering, in conferences, webinars, and other events like this, be sure to take good photos. Post them online regularly so the public can see what your company is up to.
3)Pressure to Reduce Prices
One of the first things that companies think of when faced with an increase in their expenses is to simply go up on the cost of their services. As all accountants know, the budget has to work out so that it fits within a reasonable margin. Now that you’re having to hire new talent, fresh out of college, where will the money come from to pay those salaries? At the same time, new accounting firms are popping up all over the place offering lower prices than yours. Increased competition almost always drives prices down.
One of the most successful strategies that companies have used involves making your Brand more valuable. Of course, there are multiple ways to accomplish this. Get connected to industry specialists who already have good public visibility. Work at getting selected for local radio or TV programs where you talk about any number of accounting-related topics. As you boost your visibility in the marketplace, you set yourself up to command higher billing rates.
In this day and age, people tend to lump all accounting firms (legal firms, etc.) together. But, you’ve worked your whole life to set your business apart from the others. This means that you may have to work consistently at making your differentiators well known in your community. Why are your services worth more? Why is your accounting firm the best one to work at? These are all questions you should immediately know the answers to.
The last and perhaps most important challenge that accounting firms face is the constant need to update their technology. You want to have the latest and greatest software programs and network services, but all this can be expensive. To make matters worse, technology is constantly evolving. Today’s smartphones contain advanced features you couldn’t get a year ago.
For many small businesses, the best way to alleviate this concern is to find a great managed IT service provider and allow them to handle the technical aspects of your accounting firm. Make sure your contract with them includes regular updates to the latest network and computer technology. This can cut your overall costs and give you the same technology solutions as an accounting firm twice your size.