Five questions for accounting firms

June 23, 2022 4:07 PM

Last month, I put up a set of five questions that accountants should be asking themselves so they’ll know what they want to be when they grow up. This month, I’ve got another set of five questions — but this time it’s for accounting firms to ask themselves, so they’ll know what they want to be when they grow up.

It’s no longer enough to simply want to build an accounting firm: You need to decide what kind of firm you want yours to be, and how you expect to achieve that. There are other questions to ask, certainly, but if you can answer these, you’re well on your way to a successful future.

And remember — it’s never too late to start asking and answering these questions; you can start a new future for your firm every day.

1. What’s our approach to technology?

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If you’re just treating IT as overhead, rather than as a strategic investment, you’re thinking about it wrong. Technology needs to be a part of every decision you make, and in some cases it needs to drive your decision-making as it opens up new opportunities.

2. What is our short-, mid- and long-term strategic plan?

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You need to have one of each that you share across your firm — and you need to be able to adjust them on the fly when necessary, because the pace of change is only getting faster, and you can’t afford to be stuck with an outdated plan. What’s more, your strategic plans need to include an exit plan for partners and owners.

3. How are we handling commoditization?

The fact is that more and more bread-and-butter compliance work is being computerized and commoditized (or at least appears to clients to be being commoditized), which means firms can’t rely on it as a value proposition. Instead, they need to do two things: Embrace digital efficiencies to free up time, and then use that time to focus on higher-value advisory services, including upskilling staff and incorporating new technologies to drive new value propositions.

4. How are we handling the staffing crunch?

This may be the most important question to ask right now. The structure of the profession and the lure of a partnership used to take care of recruiting and retention, but firms need to recognize that that’s no longer the case, and they need rethink who they’re hiring, the value proposition they’re making to staff, and the career paths they’re offering.

5. What are the hottest areas in accounting?

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This is the only question that overlaps between the two lists, but firms need to ask it of themselves for different reasons. To start, there are a host of fast-developing, highly profitable new service areas in the offing — from CAS and ESG services to cannabis and data security — that are yours for the taking. That doesn’t mean you have to take them all, but it does mean you have to make a conscious decision about it, rather than just leaving it to your competitors. And second, the need for differentiation makes curating your service offerings, and keeping up with what your clients need and expect, all the more important.