Being a good CPA is not enough to keep accounts and grow.
We made some observations based on the 30+ CPA and consulting firms we support that are impacting the ability of firms to generate business and keep clients.
While the economy and COVID have taken a toll, they are not the sole reason why some firms are thriving, and others are in decline.
We compared respected firms that are head-to-head competitors and while both logically should be doing well or badly, the opposite is the case.
One of the reasons the thriving firms are doing well is because they adapted to an evolved business model, that recognized that accounting services and QuickBooks / Sage / MSFT / NetSuite consulting alone are not even close to providing the service offering clients need.
What has been determined is that those firms that stubbornly held to the old business model of accounting services and myopic QuickBooks / Sage …systems support suffered. QuickBooks, Sage, MSFT, and NetSuite are fine, they are not the problem, the issue is the subservient business model CPA firms allow themselves to be put into when engaging with software vendors.
The way most CPA firms interact with software vendors only benefits the software company from a year over year standpoint.
The CPA firms often find the clients, nurture the clients…do all hard work and only the software company is assured of recurring revenue. The CPA firm allows itself to be just fungible labor and is not the “Landlord” of their own accounts.
The only explanation for this is that the CPA firms own structural disfunction and denial of technical change has cost them dearly. This is ironic because while CPA firms are selling best practices, change and operational improvement to their clients, they themselves did not take their own advice, which costs them clients, sometimes immediately.
The disruptive change is based on service offerings the clients require VS the limited ones many CPA firms deliver.
Keeping in mind that the successful CPA firms who had the courage to become “Landlords” VS timid and easily replaced mousy accountants did well. They leveraged the abilities of partners to secure “Landlord” status instead of trying to build their own internal skill sets which is myopic and prone to failure.
Accountants can take a note from software companies. There is no nice way to say it. Smart CPA firms need to leverage, license, partner with those who have offerings and skill sets the CPA firms, yet not squander monetary nor operational control to the account.
To keep the account, the CPA firm needs to collect the fees and supply the subcontractors that can help – including software! That is how Landlord status is obtained and retained.
Knowing this we can move onto what clients need so you do not get eclipsed.
Accounting services, which you already do.
Financial Systems services, which you are very limited in your ability to deliver.
Analytics on demand, which you are not capable of delivering now.
So, having one out of three of the requirements clients have, is no way to run an accounting firm!
The other thing to keep in mind is that applying service to support QuickBooks, Sage, MSFT, NetSuite… the way you do now is a losing proposition.
Your basic business model makes you fungible. Unless you can outsource the entire accounting process and administration of as many operational systems as possible, you are doomed to low fees or replacement.
The good news is that this is easily solved by partnering with service providers as trusted subcontractors. www.ayudatek.com
We cover 70+ accounting, analytic, reporting and database systems with a USA only, FINRA certified team that costs less than offshore options and 40% less than hiring internal staff. As part of the service, we get the clients Close process done 25% faster. '
No other firm can do this, and you collect a margin for as long as you are the Landlord of the account.
Accounting firms provide a fractional share of an accountant to clients, we do the same with systems support. We also provide software tools that pay both of us for as long as the client pays their fees.
We do not pretend to be accountants, and accountants should not pretend to be techies, so there is an alignment of services and we are both chasing the same clients.
We used to be accountants but found our way to consulting services and software. We sell to CFO’s, CEO’s, COO’s…the same people you engage with.
Our model leaves your firm as the Landlord, you own the account we make it work better, so you keep the account and generate a lot more RECURRING margin.
Let us have a conversation about how this could work for you & your firm.
Please contact us and we can set up an initial call.
Jim Burke | email@example.com | 609 750 8887