Customer Survey Confirms: It's Time for Accountants to Diversify Services

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For the past few years accountants have been hearing that they need to diversify their services and offer more than just tax, compliance, audit and bookkeeping. None of this is new to any of you. And for the past few years I have seen accountants nod, agree, and then go right back to offering the same hourly services.

I hear accountants tell me over and over, the same reasons for not changing their practice:

  1. My clients don’t want it.
  2. I don’t know how to sell to them. I am not a marketer or salesperson, I just don’t know where to start.
  3. I’m not sure how to price my services.  

And then there are the objections that some of you keep to yourselves, but will sometimes openly admit:

  1. I am comfortable with what I offer. I know how to do it. I don’t want to change.
  2. I have learned the technology I need for my current business, I’m not sure I want to learn more
  3. Changing things up is scary and feels risky and time consuming.

But it’s time. Technology has really pushed the accounting industry to a point that there is no question commoditization is happening and happening very quickly. FinTech is making bookkeeping easier and more accessible virtually. Technology enabled firms are offering bookkeeping, tax and compliance so inexpensively that your clients are going to start pushing you on price, or will simply move to a more automated, virtual tech-enabled service.

The good news is that you are still best positioned to add the most value for your clients. And they need you. They want more than bookkeeping. Fiscal management is usually the hardest part of running their businesses, and they want you to step in and help solve their financial issues. They want more than just bookkeeping and taxes.

How do I know they want more? We recently conducted a survey with small businesses that use our LivePlan software to see what they wanted from accountants. Consider this survey your market research. Almost 60% of the small businesses said they want strategic planning and review from their accountants. 45% said they want help writing business plans, and 42% are requesting cash flow planning.

There’s more good news for you. You don’t have to stick to clients only in your town. About 89% of the small businesses we surveyed said they prefer virtual services. They want the help, they are willing to pay for the help, and they don’t really care where you are, as long as you are ready, willing and able to help them virtually.

The market is there for you. Small businesses want and need your help and you are well positioned to offer them help. Now, you just have to do it. Not only will you keep your clients, but you will actually completely change your business and make it worth more. Yes, I am telling you this change will increase your firm’s valuation.

Think about a small firm that does only hourly billing with two employees growing to 3.5 employees in 2021. You can see from the strategic forecast that growing your firm when you are only billing hours, is slow going, and takes more people to grow your hours. The business modeled below is plodding along, doing fine.

What if you could grow your practice by adding new small businesses and transferring some existing hourly billed small businesses to packaged services? What if every new business you brought on board brought you an average of $18,500 per year with a specific packed service offering with consistent, good margins? 

With just 150 clients on these packaged services by the end of year the first year, your revenue opportunity with this model is about $850,000. More than 4 times the revenue opportunity in the more common hourly model.

It’s not just that offering strategic advising and packaged services will give you a bigger and better opportunity to grow your business and scale it, but this business model also differentiates you from the commoditized tax, compliance and audit world of accounting.

I know that I am speaking to the choir, and that you want to differentiate, but how?

In order to actually change your practice and actually start offering strategic advising services you need to bite the bullet and find some good practical training and tools. You do not have to go at this alone. Mark Wickersham, an expert in value pricing for the accounting industry and a best-selling author has great books, online training courses, and on demand videos that will teach you how to price your services.

Remember, despite all the scary new online services and FinTech tools that feel like they are threatening your livelihood, no company or technology is going to replace humans using their judgement and brains to analyze information and give strategic advice. I can guarantee you that small businesses need your help and advice, and are desperate to get the right accounting service that helps them actually understand their financials and see through the fog of business numbers to achieve the growth and success they are looking for. Now it’s up to you to make the leap, beyond what’s comfortable, and provide customers what they are asking for.

About the Author:

Sabrina Parsons is CEO of Palo Alto Software, the company behind the best-selling business management software, LivePlan, their newest email product for teams, Outpost, and popular small business resource blog, Bplans.

Sabrina is dedicated to her community and developing the next generation of leaders and emerging companies. She serves as a board member for the Oregon Community Foundation, where she also sits on Strategic Opportunities Committee and is tasked with creating opportunity through investments in small business and under-served entrepreneurs. In 2018, Sabrina was appointed by the Governor of Oregon to the board for the Oregon Growth Board, where she helps guide strategic investments in to help grow Oregon companies.

A mother of three boys 14 and under, Sabrina authors a blog about the challenges and rewards of being a “Mommy CEO.” She is a long-time advocate for women in business, and is involved with organizations including International Women’s Forum and Family Forward. She also regularly mentors and writes about issues that impact women in leadership and business. Sabrina contributes to Inc magazine, Entrepreneur Magazine, Business Insider, Huffington Post, Forbes, and Bplans. Sabrina graduated from Princeton University.

Note from the Editor:

Ms. Parsons summarized a similar message and many of the concepts outlined herein to those in attendance during her Tuesday morning 6/18/2019) Main State presentation at Scaling New Heights in Salt Lake City, Utah. A recorded version of that presentation maybe available from the Woodard Events Scaling New Heights 2019 website.