In today's competitive accounting business world, growth is essential for survival. With the evolution of new technologies, client perspectives, and global markets, an accounting firm needs to be ahead of its competitors.
However, that is easier said than done. In order to achieve growth, accounting businesses must overcome the major challenges within the firm as well as outside of it. Let's check out some of these challenges CPA firms face, along with some solutions for them.
1. Keeping abreast of the latest technology
There are several accounting tech solutions available in the market for CPAs, each with their own pros and cons. With so many options, it has become confusing for the firms to choose the right one. Moreover, even after selecting the right tools and platform, there is the challenge of its adoption.
You can keep track of emerging and popular technological accounting solutions by signing up for relevant seminars and industry trade shows happening worldwide, for one. But also keep abreast of accounting blogs and podcasts as well that address the most pressing technology issues, as well as product news. Moreover, you can create an internal research team to try out new accounting solutions to see which best suit your business.
2. Acquiring new clients
This is of course no easy task, with how competitive the market has become to differentiate on both service and price. CPA firms also face numerous challenges, such as low visibility, client expectations, and competitive pricing. Needless to say, there is little growth without a constantly growing client base.
To acquire new clients, you need a presence in the market. Hence, you need to rejig your marketing strategy to reach as many prospects as possible. Additionally, you must direct the strategy to reach the right audience at the right time.
Here are some strategies you can use to acquire new clients:
- Client testimonials. Client testimonials are an efficient way to showcase your firm's reliability to prospects. When clients talk good things about you, it usually tells prospects that you will serve them well.
- Partnering with influencers. There are people in the accounting domain with a good reputation. A good word from them increases your chances of client acquisition.
- Attending events. Once again, attending accounting events is a great way to help you meet prospects looking to upgrade their accounting services. You can also showcase these events on your website, conveying to prospects that you are up-to-date with market trends.
3. Employee retention
A CPA's life has always been associated with heavy workloads and responsibilities. However, after COVID, the mindset of many CPAs has changed drastically. The contemporary CPAs prioritize life-work balance, mental health, and flexible leave policies.
As a result, most CPA firms are facing the issue of employee retention due to their conventional modus operandi. Moreover, the challenging working environment has also led to an increase in premature retirements.
To ensure skilled talent stays in your firm, you must focus on facilitating an employee-first working environment. Employees must be given enough time and freedom to contribute more than just work. They should also be able to take time off at will to reduce burnout. Organizing a company offsite is another way to increase employee satisfaction.
4. Data security threats
It's been widely publicized that the increase in connected technology use goes hand-in-hand with data security threats. Phishing attacks and ransomware are the attackers' most preferred ways to access private and confidential form data, such as client payment details. Moreover, hackers have increased the use of AI-based methods to lure employees into providing information.
These cyberattacks can be detrimental to your CPA firm as even a small one conveys to your clients that you can't keep their data safe. Apart from denting your reputation, a data breach can also lead to huge compensations to clients.
Studies have found that the biggest reason for data breaches is employee ignorance. Hence, apart from investing in advanced security infrastructure, it is imperative to build a cybersecurity awareness program for employees. The program should include regular training on best practices, the latest security threats, and risk management. Moreover, you can opt for managed cybersecurity services to ensure complete data security and work worry-free.
5. Managing client expectations
In the present scenario, businesses don't look at CPAs as number-crunchers. Instead, they want them to be problem-solvers, involved in all critical financial decisions and growth strategies. Hence, CPA firms need to adapt accordingly to meet the changing client requirements.
6. Upskilling
The accounting industry is more dynamic than ever. With changing regulations, the introduction of new technology, and increasing client expectations, CPAs are expected to grow and evolve regularly.
Create an employee growth program where they are encouraged to attend conferences and seminars on technology, best practices, and personality development. You can also reward employees for getting the latest certifications and courses in accounting, such as the
7. Remote work
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Create a hybrid workplace where employees can work from any location at their convenience. You can use advanced solutions like cloud hosting to facilitate a seamless remote work environment. If your accounting process does not allow a fully remote work process, you can at least make the working hours flexible.
8. Encourage innovation
Fostering innovation in your CPA firm ensures you get things done faster while keeping the employees satisfied. But, it is easier said than done, as the workload of CPAs seldom allows them to find time for innovation.
Create an innovation-led working environment by building a comprehensive innovation program where you reward employees for innovative ideas will set your firm apart. Furthermore, senior officials need to motivate every employee to come up with ideas frequently without the fear of embarrassment. Not just CPAs, but every department in the firm should be a part of the innovation journey.
Conclusion
Growth initiatives by any accounting firm need to be fulfilled by keeping these challenges in mind. However, as every accounting business is different, you must also analyze your process to find the bottlenecks slowing down your growth journey.
CPAs must be trained to evolve into skilled strategic advisors well-equipped to plan an organization's financial roadmap. Moreover, CPAs should aim to build long-term partnerships with clients by maintaining constant dialogue, taking regular feedback, and trying to understand their business processes.
