This is the time of year when accountants are usually taking a well-deserved break after a hectic tax season. This (hopefully) one-of-a-kind year, however, has many accounting firms still busy resolving issues related to extensions, sales tax reporting, delayed refunds, the PPP, and more. Plus, 2022 will be here before we know it, and that means that strategic planning for next year soon will begin.
As you do a post-mortem on your firm’s 2020 tax year workflows, processes, and services, don’t overlook potential new opportunities related to advisory services and moving into specialization. Both of these areas can prove to be beneficial for your clients as well as lucrative for your business.
A year like no other
In the past 18 months, many accountants found themselves helping both businesses and individuals navigate the uncharted waters created by COVID. Whether that took the form of additional financial data analysis, help with PPP-related issues, corporate budgeting assistance, or guidance on topics like hiring, furloughs, and compensation, accountants wore many hats for their clients — some of which they may not have traditionally worn!
And of course all of this was on top of dealing with accountants’ own pandemic-related challenges. Just like many of their clients, tax firms’ employees were trying to figure out the logistics of working remotely (while also juggling childcare or virtual students in many cases). Add to the equation the fact that the tax calendar accountants are so accustomed to was turned on its head with deadline adjustments, and the past 18 months have been unlike anything the accounting industry has experienced.
A recent article in Accounting Today makes an astute observation about another phenomenon that occurred in a lot of CPA firms this past year. “Though many firms report they mostly do compliance work, not advisory, often they are not recognizing that the pandemic pulled them into advisory services without a formal effort on their part,” the article says.
Indeed, in this one-of-a-kind year, many accountants were in uncharted waters as they tried their best to help clients navigate the COVID-19 storm. But in many cases, CPAs rose to the occasion, and in the process, may have inadvertently expanded their firm’s offerings to include advisory services. So, how can they capitalize on this serendipitous change going forward?
Industry specialization is the secret
A trusted accountant is an obvious resource for business owners to turn to when they are looking for tailored business advice. But an accountant can’t possibly be everything to every client when typically they are working with businesses in a wide array of industries. This is why industry specialization is often key to a firm’s ability to effectively pivot to advisory services provider.
Follow these five steps to get your firm’s specialized advisory services up and running.
- First and foremost, you have to select the industry or industries your firm will specialize in. When choosing your niche, consider industries where your team has particular interests or background. Perhaps that’s not-for-profits, agriculture, manufacturing, or real estate, for example.
- Next, you need to learn the inner workings of the industry — the ins and outs, the major players, the lingo. So, roll up your sleeves and dedicate some time to educating yourself on how that industry operates — the buyers and supplies, the latest trends, potential challenges, etc. The Industry Intelligence on Vertical IQ makes this step simple.
- Then it’s time to build your network of expert partners related to your chosen niche. For example, if you have opted to focus on real estate, you will want to tap into your network to connect to mortgage brokers, home inspectors, title companies, and so forth. These professionals in adjacent fields can serve as additional resources to you as well as your advisory clients. Also consider participating in trade organizations to build more connections and bolster your reputation in the field.
- Share Industry Intelligence with your client during every interaction. In conversations or phone calls, showcase your expertise in their industry. Incorporate industry trends and challenges into your presentations to spur conversation. Print relevant news articles to use as a leave-behind or drop in the mail as a follow-up.
- Continue to build your expertise in your niche by staying on top of changes within the industry. This means staying abreast of current events, how COVID has affected the industry, and trade publication articles, which can be found on each Vertical IQ Industry Profile. By continuously educating yourself on the latest industry news, you further build your expertise, which benefits current advisory clients as well as future ones.
A win-win for accounting clients and firms
Specialization has tangible benefits to your advisory clients. You become not just “some accountant,” easily replaced by another accounting firm that has lower rates, for example. Your knowledge of the intricacies of their industry means you can offer insightful, strategic advice. And this provides real value beyond just tax preparation.
But specialization also has advantages to your firm’s bottom line as you have the potential to be more profitable than generalists. You can garner higher fees, and you also can realize efficiencies with office management, marketing, document production, and more.
If you think your accounting firm would like to add advisory services to your offerings, Vertical IQ can help. Download our free eBook, 8 Ways to Use Industry Intelligence to Grow Your Accounting Firm, and learn how to use Industry Intelligence to develop a specialty, bring in new business clients, and grow existing relationships.
Image credit: Loui Kiær from Unsplash