I know some Aussies get very frustrated when they see so many American trends being adopted here.
Sure, there are some really cringeworthy examples, like teenagers putting their baseball caps on backwards, but ask yourself where would the productivity of your practice be today if you’d turned your back on Word or Excel simply because they’re American.
Sometimes in business, you just have to take your lead from the U.S. and other western countries that operate pretty much as we do.
Like it or not, accountancy is now in a global market.
I’d like to take a few minutes to outline for you where I see the accountancy market in Australia heading and look at where I believe we are now compared to the changes that have already swept through the United States.
Indiana-based Adam Hale, who is a Partner in the accounting firm Summit CPA, gave us a great insight into the changes that have already happened in the U.S. market when he appeared in our recent webinar.
Adam told us that these rapid changes have occurred for a number of reasons, including:
- ever improving and sophisticated software which is reducing the amount of time that American accountants are spending on the preparation of income tax returns
- firms being faced with losing key staff unless they can offer them greater intellectual challenges, such as a broader range of interests, like Virtual Chief Financial Officer Services to help their SME clients
- discovering that the SME marketplace is receptive, and in many cases expects, to be offered a broader range of value adding services by professional accountants
If you stand back and take a look, you can see that these changes are also happening in the Australian market, sure, we may be 12 to 18 months behind, but I see these changes coming here and we need to be ready for them.
Australia follows American trends in many ways. For accountants, this doesn’t have to be a bad trend if you’re prepared to be open to new ideas. Why wouldn’t you want to learn from international trends and position yourself to deliver additional value-added services with premium revenues to your SME clients?
That’s almost a ‘no-brainer’. Oops … that’s one of those American sayings, isn’t it?
What’s become clear is that the impact on the U.S. accounting industry resulted from software, technology and improvements to communications. This evolution reduced the amount of time accountants were spending on tax return preparation work and it sliced into their revenues.
Same thing is happening here.
In the global economy we share more with our U.S. cousins than language, Black Friday sales and burgers with fries.
When the U.S. sneezes, often we catch cold – we just have to be ready for it.
During our webinar presentation, Adam Hale made the comment that his firm succeeded with changing their focus through trial and error.
They identified those areas of interest that resonated with the SME market:
- “Financial Forecasting” which is mandatory for all of their clients. The process incorporates Business Planning, Key Drivers that support the calculations and Budgets.
- Cash Flow Forecast
- Projected Balance Sheets
- Monthly Work Programme that could be selected by the client for weekly, bi-monthly or monthly operations, and monthly Board of Review meetings that his accountancy firm facilitates
- Tax Advice and Taxation Returns – the client can always elect to have this work undertaken by another firm however they’ve found that about 90% of clients contract with Summit CPA to provide this service
- Back Office Accounting and Administration – the client elects whether they will undertake this work themselves, contract Summit CPA or use a third party but about 1/3 contract with Summit CPA.
The real lesson is that “Financial Forecasting” is the most important task being performed for their SME clients.
Their clients agree to a 12-month contract of services and pay the negotiated fee on a weekly basis. Wouldn’t that be great? Virtually no debtors and very little work in progress!
The overall results, 150 clients paying an average $US80,000 a year – ranging from $US40,000 – $US200,000.
Adam Hale says his firm has no trouble attracting talent or retaining high quality staff. They love the new way of working!
If you would like to listen to Alan Hale’s webinar recording click here.
Andrew Geddes, an “Australian Accounting Industry Guru” and former public company director, watched Adam Hale’s webinar presentation with great interest. Later, Andrew joined me for an ESS BIZTOOLS Podcast and he made the following prediction:
“It’s a new business model – I think it’s going to revolutionise the sector globally!”
Check out the podcast with Andrew Geddes for yourself by clicking here.
We know there are extremely challenging times ahead for our industry, so here at ESS BIZTOOLS, we’re presenting a series of Free Education Events just for accountants. I hope you can join us.
In these sessions, we’ll be looking at how you can supply value adding vCFO services for SME clients by:
- creating interesting and challenging work to help attract and retain the best and brightest talent available; and
- having the confidence to outline the services that your firm can deliver for a reasonable fee
The first of our presentations “Introduction To Virtual CFO Delivery” was presented on 15 September 2022 and you can still access the recording by clicking here.
You can register for our upcoming Education Events/Webinar – “Offering vCFO Services”. These services will help your SME Clients add value.
When: 5 October 2022
Time: 11.30am AEST | 12.30am AEDT | 9.30am AWST | 9.30am ACDT
Peter Towers, Accountant, Company Secretary, Director, Consultant
Managing Director ESS BIZTOOLS
Telephone: 1800 232 088