Handling Competition: Is it Time to be Innovative?
Let’s get straight to the point. Despite what popular TV commercials may say these days, all people aren’t tax people. In addition, they might not be a CPA, an auditor or even a bookkeeper. The world of accounting continues to grow with “experts” trying to supplement their income by equipping themselves with software purchased at the local store or online. Thanks to new technology, even geography is no longer a barrier. The accountant located a state over is just as competitive in the market as the accountant down the street.
An accountant’s competition is no longer found just within the accounting industry as it could start appearing from Silicon Valley or even overseas. Looking at the types of technology firms use and the high costs of recruiting and retaining employees, it is easy to see the writing on the wall. Technology and automation will begin replacing accountants’ jobs if they haven’t already. At the same time, some firms outsource work to foreign countries. This puts more and more pressure on the modern accountant to adapt to today’s world so they can remain competitive.
The Value of Socializing
In a world of screen time, be human! Building relationships with clients, prospects and referral partners is even more important in 2020. Although some events and connections may seem insignificant at first, you never know who someone knows. Sharing who you are as a person, behind the business card, can go a long way. Many times, a contact has thanked me for taking extra interest in their business. That interest could be as simple as having a conversation with someone and just seeing where their industry is going or asking questions about how they operate. Although this might not directly translate into business, it does build more of a connection and give valuable insight that can be used with other contacts in a similar industry. More importantly, taking a small amount of time to show interest in a contact overcomes the introvert accountant stereotype. So if your contact is later out on the town, they can boast about how you aren’t the “typical” accountant.
Today there is software that can do almost every part of the accountant’s day-to-day tasks. To remain competitive with other firms, big and small, physical and virtual, it is important to implement technology to help automate tasks and mitigate manual billable hours. This could be anything from write-up work to audit sampling.
When searching for software options, it is vital to evaluate and test the software thoroughly to understand how it will work and if staff can handle it. If new software that costs tens of thousands of dollars can’t be used correctly, it is just a waste of money. At the same time, as awesome as it would be to automate all processes, it is important for software end-users to understand what the software is doing so they can interpret the results or output. A prime example would be scanning client source documents for a personal tax return and using the scanning software to automatically enter the data into the return. If a fresh graduate doesn’t understand tax law, they may assume a return is correct because the computer did it and time will be wasted making corrections. The more reliant a user becomes on software, the less likely they will truly understand a task.
Having top-notch technology at your fingertips is great, but when that technology fails, you need to have a backup plan so that the job still gets done. Having the knowledge to complete the task manually will provide an advantage over the competition that solely relies on that same technology. Many non-CPAs that enter the traditional CPA territory don’t always understand the theory behind tasks that they enable technology to handle for them. While technology is valuable and helps complete the tasks faster, CPAs still must educate not only their staff, but also their clients so everyone can understand the “why.” Technology gives everyone the ability to achieve the same result, but the interpretation could be way off if they don’t truly understand what they are doing.
When evaluating an app or software, it’s important to know when to realistically call it. If the hoops one is going through to be more efficient are actually making them less efficient and productive, it’s time to reconsider. Not every business can use the same tech stack and, in some instances, the client may not be able to use it correctly. Although the urge to use technology to compete with other firms will always be there, it is important to be smart about it and still focus on the core business. If the tech doesn’t work, turn attention to the client and find the most efficient way to complete the job.
Keep the Focus
Whether a CPA is at a conference or reading a monthly accounting journal, he or she will see new things in the industry that will often distract from core services. Today, many firms are trying to adapt to cloud accounting and outsourced accounting services. The truth is that this could possibly overextend the resources of some firms. At that point, the work product may suffer and actually be a disservice to clients. Many of the new faces in the accounting world that have no true accounting background are solely relying on a tech stack to help them complete their tasks. As accountants, we need to differentiate ourselves from the pack and provide more value to clients. Clients don’t want just a copy-and-paste tech stack. They want their CPA’s expertise, time and service. Those who do that well will be harder to replace.
As the outside world enters the accounting market, it is important for CPAs to remind clients and prospects who they are, what they know and how they got here.
This article appeared in the May/June 2020 issue of New Jersey CPA magazine. Read the full issue.