The interwoven nature of the global marketplace means that businesses the world over are seldom unaffected by the ripples of change. During the worldwide economic downturn of 2008, accounting firms of all sizes had to hold back on fee increases, bite the downsize bullet, or find new ways to generate additional revenue to keep margins sensible. China’s current economic woes are also making its effects felt far and wide, with the South African Rand being among many other currencies feeling the effects of what is transpiring in Beijing.
With this backdrop, it makes sense for firms to look a little further beyond common practices to expand their client offerings as a means to bolster revenue growth and stay ahead in a tough market space. According to Forrester Research, “We have begun a 20-year business cycle in which the most successful enterprises will reinvent themselves to systematically understand and serve increasingly powerful customers”. With almost every practice offering a standard set of accounting services, the stage is set for firms with a more innovative approach to seize a larger piece of the market share.
Differentiation in a saturated market is key
Honing in on a niche market is a great way to boost revenue. In a Moneyweb article, Sally Glick, CMO at Sobel & Co, says firms could, for example, “…focus solely on restaurants or construction general contractors, and beyond providing financial statements and tax returns, the firm could also point out ways businesses could improve margins or advise on industry trends and pending regulations that could impact their businesses.” The same article mentions developing expertise in areas such as tax planning, forensics and auditing for specific industries and thereby gaining traction with smaller, yet more penetrable market segments. With the now firmly entrenched internet culture having reshaped the way we live work and play, products and services are becoming increasingly commoditised and the onus is on businesses to carve their niche amongst the competition.
No business can afford to be technology shy
Market forces and global trends dictate that accounting firms should look to technology to build efficiency into their practices and use it to add value to clients. With next-generation networking infrastructures on our doorstep, small businesses can now affordably leverage computing power in the cloud. Hosted business applications that come at per-user pricing structures are a radical shift from the complex and expensive annual licensing models that was the order of the day 10 or so years ago. In addition, mobile technology makes client/firm collaboration possible and blows communication wide open. With internet spin-off technologies in full supply, small firms are better positioned to make an impact in their markets while keeping costs sensible.
Bring in the right solutions that speak to current and future needs
In a Q&A held with producers of well-known accounting software packages such as Sage, Intuit and Xero, all agree that young millennial firms will increasingly introduce high-tech solutions that will challenge practices to look beyond their usual service offerings. This includes rethinking the way you run your own practice with accounting solutions that offer scalability on a never before seen scale. According to a study conducted for the American Institute of Chartered Accountants (AICPA), “…80% of CPAs believe their role will change significantly by 2025, with consulting, risk management, and advisory services playing a larger role in their businesses.” This new lean, high-tech, low-touch firm will attribute much of its agility and broader skillset to the technology they engage with. That’s what makes finding and building the right partnerships a key role in how effectively firms will seize new opportunities.
With changing times come challenges – and opportunities
Traditionally firms operated within fairly predictable environments with little competition from the outside. These days, companies like law firms are claiming a piece of the market share by offering tax and auditing functions to clients. Technology has also challenged the status quo by forcing businesses to re-evaluate strategy and grapple with remaining competitive in uncertain times. For future-ready firms, these challenges are easily perceived as opportunities to make their mark in the industry and bring new solutions, new ways of thinking and new approaches to challenges to the table.