It’s no secret that the U.S. accounting industry is consolidating. With M&A comes an era of larger regional firms with more staff and more specific advisory services and clients than the general public accounting practice model our fathers and grandfathers knew. Whether they want to conserve firm value for outgoing partners or grow for the next generation — or both — firm managing partners face difficult choices.
Discussions with members of BKR International reveal five important to-do items that need to take place within firms to support continued growth and excellent client service in the coming year and beyond.
1. Stop Avoiding the S Word.’
Partners who are getting calls from potential buyers and those who are waiting for the phone to ring still need to sit down and discuss the future of their firm. Who are the emerging talents or potential partners who could help grow the firm from within? What kind of coaching and mentoring are they receiving? Who is missing in that talent pool that you should recruit now, regardless of your decision to hold or sell? Who is leaving and when? What do they need to retire comfortably? Are there alternatives to selling? Time is ticking to get a plan in place sooner than later. If you need an outside perspective, join and participate in an accounting association such as BKR International to network with your peers.
2. Take Your Own Advice About Business Value.
Accounting firms are very good advisors to their clients about confirming the true value of a business. Optimizing their own business model, margins, controls and processes may be another story. If your own financial house isn’t in order, how do you attract the best offers and get the highest value for your years of hard work? In other words, don’t wait for a buyer or sheer procrastination to dictate your firm’s value for you.
3. Onboarding is Not an Acquisition Afterthought.
If and when acquisition becomes a viable choice for growth, the real work begins once the deal is signed. Differing firm cultures, roles, client expectations, processes and even software choices can create a rift between your merging teams before you know it. Every managing partner should understand the importance of an onboarding process to bring everyone on the same page and the same team for the benefit of clients and growth. Don’t wait for key senior talent to leave before you pay attention.
4. Better Brand Equals Better Recruits.
How visible is your firm in key markets to build a quality reputation and attract new clients? If your answer is something like, “we rely on word of mouth,” that strategy went out with the general practice accounting firm. A consistently visible and reputable brand not only attracts clients, it also creates awareness of your firm as a contender for top talent. Strong compensation and flexible time commitments are still the most important, according to a recent study on reputation published in MIT Sloan Review, but a recognizable firm name still counts in accounting.
5. Pipeline Meetings Must Cross-Pollinate.
Not only are some accounting firms not holding regular sales pipeline meetings, they also fail to address the importance of cross-servicing their best clients. It can be a symptom of partners still working too many hours in the business with clients rather than on the business to ensure that the firm’s service teams are communicating about cross-servicing opportunities regularly. At BKR International, we hear this issue discussed frequently in our confidential MP roundtables. Partners need to include senior staff in these discussions to identify opportunities to sell four or five services per client, which leads to high retention.
Maureen Schwartz is executive director of BKR International, one of the top 10 global accounting associations, representing more than 150 independent accounting and business advisory firms in over 300 offices and 75 countries.