The 12th edition of The Good, the Bad and the Ugly of the Australian Accounting Profession has been released (www.businessfitness.net/gbu).
It’s no secret that the accounting industry is in the midst of an unsettling revolution. Familiarity and security is in the past; the future doesn’t hold this.
This year’s Good Bad Ugly report highlighted five key issues facing firms today, giving a sneak peek at the successful strategies of high-performing firms, along with insight and practical ‘how to’ strategies from industry experts.
Structuring and managing your practice as a business
An increasing trend in the accounting industry (and particularly for the more progressive and higher performing firms) is to run an accounting firm as a business (as 13% of our surveyed firms are doing) rather than a traditional accounting firm (42.9%), with a renewed focus on incentivised remuneration systems, competition, marketing, embracing technology for efficiency gains and negotiating fixed price engagements based on value billing with clients.
Key client servicing and relationship management
Effective relationships are underpinned by the time invested in them and by gaining a genuine understanding of a client’s circumstances. Technology and digital communications have a role to play in the regularity of communications, but ultimately, key client relationships will require more than automated response and contact systems. Only 28% of firms have a documented client contact program, with the majority of firms (67.4%) contacting their clients between 2 and 4 times per year.
Delivering relevant services
With the role of the traditional accountant rapidly becoming redundant, firms across the country (or the progressive ones at least) are revisiting their service offerings. Strategies to address what their clients truly need and how they as a firm deliver those services is now a common discussion in successful firms. Compliance is still the main service provided (61.3%), with business advisory services at 13.3%.
Achieving efficiency gains through technology and systems
As the value expectations of traditional compliance work become increasingly topical, efficiency in production of these commoditised outputs will remain in the spotlight. Firms are embracing technology and analysing their current systems to deliver gains in the data collection, processing and report production cycle. Firms are looking to implement new technologies over the next year for client portals (34% of firms), integrated workpapers (27% of firms) and workflow management (19.5% of firms).
Engaging a flexible workforce
The historical premium paid for localised labour is fast becoming redundant as more and more firms (and their clients’ businesses also) reach out through technology to appropriately trained and skilled resources, wherever they may be. Of the firms surveyed, 65% of firms will be looking to hire new staff over the next year, with 30.2% looking to outsourcing as a potential solution.
The headline key performance indicator results:
|Revenue||Median revenue per partner increased to $1,008,778 from $954,367|
|Profitability||Net profit (before equity partner salaries, super and benefits) came in at $323,000 (35.4%).|
|Leverage||Median leverage at 5.1 people per partner – on a par with lastyear’s 5.3.|
|Charge rates||An increasing number of firms are removing the need for timesheets and charge rates, but for the majority who are still implementing charge rates, there has been a narrowing of the range in charge rate multiples|
|Productivity||Median result was 66.0%, the same as last year|
|Partner return on effort||Median of $179/hour, up from last year’s $175/hour|
An Executive Summary of the 2014 Good, Bad, Ugly report is available to download and the full report is available for purchase at www.businessfitness.net/gbu.
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