Four areas where firms should succeed in a time of radical change
Accounting firms should not only view current challenges in the profession as something to future-proof against, but opportunities to take advantage of, according to Scott Fleszar, vice president of product management at Thomson Reuters, speaking at the Accounting and Finance Show LA on Thursday.
“To seize the expanding marketing opportunities today, and mitigate the risks, firms must be successful in four areas,” Fleszar explained during his morning keynote.
Those four areas are: technology adoption, service culture, employee experience and service mix. Fleszar proceeded to drill down into each one.
1. Technology adoption
“Technology adoption is table stakes,” Fleszar told attendees. “You need to be there already.”
Firms should also think differently about the role of technology, he continued. “It’s not just technology to streamline you and make you more efficient, but to elevate the client experience and keep you safe and secure.”
Fleszar acknowledged the profession is generally slower to adopt technology, citing a Thomson Reuters UltraTax survey conducted over the last two years. According to those results, two-thirds of the profession is not currently seeing the value of operating in the cloud, and more than 50 percent of respondents are using paper/manual methods or Excel to manage workflow, due dates and routing through the office.
“The traditional workflow model is dictated by the client,” Fleszar explained, asking attendees how many of them receive emails from their clients with 18 different attachments. “Clients want to be led. You are in a better position to define how you’re going to interact with clients… With digital workflow, it’s automated, automatic, and it’s employee-friendly.”
Technology also offers the opportunity for firms to be in a key analysis mode with their clients.
2. Service culture
"When you engage clients, are you creating a frictionless client environment?” Fleszar asked.
The same UltraTax survey found that one-third of firms don’t have a website today and don’t have plans for a website. “These are the firms you want to compete with," said Fleszar. "Websites are your front door—that’s how clients will find you.”
Fleszar urged practitioners to design their websites to serve current clients, not market for new ones. Showcasing the high level of service provided to current client will be enough of a marketing advantage to prospects, he explained.
Back to the survey, Fleszar pointed out that 60 percent of firms are not deploying client portals, which Fleszar described as “convenient, client-friendly, employee-friendly and cost-effective.”
In this gap between adoption and client expectations—which are higher than ever, Fleszar added, especially to the next generation—is one question: “Is your firm easy to work with?”
Beyond websites and portals, Fleszar recommended utilizing video to answer common questions or explain concepts like business expenses. Firms cut down on the repetitive answers and create a resource center positioning them as thought leaders.
Another recommendation of Fleszar’s is utilizing texting with clients, as surveys show texting is so ubiquitous that when clients can text with their providers, they consider it a great service. Specifically, Fleszar mentioned business-texting platform Zipwhip as a good tool.
Overall, Fleszar said, good firm service includes:
- Anticipating issues and being proactive
- Removing the pain and providing solutions
- Clients liking the “feel” of the outcome
- Clients viewing the firm as an investment
- A trusted advisor approach
“At the end of the day, technology is an enabler—we are in the relationship business,” Fleszar said, imploring firms to annually survey clients to gain candid feedback on their current level of service.
3. Employee experience
Fleszar also recommended annual surveys as a way to benchmark employee satisfaction. Employee surveys are an important metric as they are “the most valuable asset in your firm.”
“It’s a growing trend you already know... it doesn’t matter what size firm you are, the top 1, 2, 3 issues are finding qualified staff and retaining qualified staff. The talent war has escalated. It’s really hard to find good people to bring in your firm.”
Additionally, the CPA pipeline is not as robust, with fewer accounting graduates sitting for the CPA exam. “This says the CPA brand suffers a bit, but the AICPA is working on this,” Fleszar said. The increased reluctance to attain a license speaks to its outdated branding as a number-crunching designation, as well as people not seeing it as in line with their career goals, Fleszar explained. “We need to reinforce the importance of the certification.”
Fleszar took his earlier question regarding client experience and tweaked it to a more internal query: “Is your firm easy to work at?”
The firm characteristics employees currently value are (beyond the table stakes of pay and recognition):
- Work-life balance
- Development opportunities
- A purpose-driven organization
“How do you effectively develop staff?” Fleszar asked, pulling up a matrix measuring complexity and ability of skills. Being higher on the ability scale and lower on the complexity metric leads to a common trap in the profession: boredom.
“When a complex scenario comes up, a partner takes it, and you bypass the opportunity to develop staff,” Fleszar said. On the other end of the spectrum, lower ability and higher complexity lead to stressed-out employees.
To balance the two, Fleszar suggests, “every once in a while, throw staff into the deep end to get a little uncomfortable, work on something they haven’t worked on before… Intellectual development improves employee experience.”
By the same token, the newest technology hardware should trickle down past the partner level, given that those employees will require it to do more of the “heavy lifting.”
As firms look to find employees with the ideal balance of technical and soft skills, Fleszar suggested finding those employees with good client-service abilities that firms can train on the technical side, as the reverse might be more difficult.
He shared the story of one practitioner who recognized the exceptional service skills of someone working at the front desk of the gym where he was a member. He decided to hire him, and he became one of the practitioner’s highest-preforming employees.
4. Service mix
This last area might be the most important, especially in the next five to seven years, Fleszar said.
“This profession has a long, proud legacy of compliance experts. Various dynamics in the profession make it so that value proposition is declining over time… You need to think of pivoting to being a more trusted advisor.”
Fleszar cited the new postcard-size 1040 tax form, which, while instantly “infamous” for being less simple than promised, ushers in a “message that’s still there. The government is trying to make tax compliance easier.”
Fleszar then called attention to a recent Accounting Today headline: New tax form a sign of shift toward Intuit, away from H&R Block. This signals a shift to more do-it-yourself tax preparation, and less business to paid preparers, Fleszar noted.
Fleszar then charted the evolution of tax-preparation technology, starting with the optical character recognition of today that can auto-populate tax forms, up to a 10-plus-year projection of artificial intelligence producing a fully capable CPA with the requisite technical skills.
This leaves accountants “perfectly positioned to be that trusted advisor,” Fleszar assured the audience. Overall, revenues will be driven down for rote compliance work and audit, Fleszar explained, but will create the opportunity for advisory work, which he defines as “helping business clients run better businesses.”
“Are you still selling reports and billable hours, or are you selling strategies and solutions?” he asked.
Many firms are already doing higher-level advisory work, Fleszar acknowledged, though not pricing for it. Something that could take a practitioner a few minutes could save a client thousands of dollars, he explained, though firms should take into account the years of expertise behind that solution.
Fleszar recommended the Tax Cuts and Jobs Act as one timely starting point for advisory services: “TCJA is a gift to us.” Clients are already aware of this issue, he explained, and seeking advice.
Again, firms need to price appropriately for this kind of work. “In my experience, practitioners often sell themselves short. Fundamentally, timesheets and billable hours are an anchor.”
“I want everyone to think differently about the real value you are providing clients—don’t [underestimate] the value, the difference you make to clients,” he continued.
Fleszar paraphrased a practitioner he recently spoke with who described firm owners as “reluctant entrepreneurs.”
“I’d say, be less reluctant,” he advised. “The status quo has risks in the long term.”
Instead, firms should strive to succeed in the four critical areas Fleszar outlined. Firms that have done just that, he said, are “growing, prosperous firms that are delighting clients.”