When the pandemic hit, accounting firms were already feeling the pressure to provide new services to their existing clients, and the industry was moving to automate more work surrounding compliance and tax returns through artificial intelligence.
Enter the pandemic, and it became even harder to network and acquire new clients. Considering these factors, firms are increasingly experiencing a shift, whereby the bulk of their business is no longer only focused on delivering insight to help clients stay in compliance with tax regulations. As a result, accounting firms must focus on building and nurturing relationships more than ever before.
Businesses are now more receptive to accounting firms that are looking to offer a more holistic approach when servicing them. Whether it be the need to consult around corporate structures or understand the tax liabilities of different business decisions, companies will increasingly come to expect a higher level of service than many firms have traditionally been equipped to handle.
AI solutions are key, but humans still count
According to a recent PWC U.S. CFO Pulse Survey, the continued focus on investing in technology for growth rather than cost reductions further signals optimism about where companies are headed post COVID-19. But it is about finding a balance and making good growth decisions, the survey said.
At the onset of the pandemic, many accounting firms were scrambling to get their technology infrastructure in place. Once things solidified, and remote work from home became the norm, accounting firms realized that even as they incorporated new technologies, they needed to transform their practices to accommodate the new reality.
One interesting thing that happened last year when the world went virtual was the focus on utilizing digital capabilities to reach clients and prospects. At the root of this was a key question: “Who are your contacts and how well do you know them?” Without the ability to connect in person, this question became ever more crucial for survival.
Many could answer this question, but others could not. Lessons were learned. At a basic level, we all were reminded that you never know when business conditions will change and how long you will be impacted. If you need to rely on a distributed workforce, the challenges will be greater. It does not matter whether you have great new services around “PPP” or a “cyber workforce” if you do not have the right data, or the appropriate contacts, to leverage those opportunities.
How can you effectively bring value-added services to clients?
In Jan. 2020, before any of us knew what the rest of the year would bring, a Wolters Kluwer article stated, “Accounting firms that continue to focus solely on compliance work as part of their practice deliverables can grow annually at between nought to 3 percent. If you compare that, however, with firms focusing on delivering advisory services to their clients, they can anticipate growth in the region of 10 to 20 percent annually.”
At the onset of the pandemic, a new light was cast on the critical work of the accounting advisor, starting with the realization that they could bring value-added consulting around myriad new government-sponsored programs. Soon, however, the role of the accountant as trusted advisor went beyond conferring on SBA and PPP loans and year-end filings.
Businesses that shifted to a remote, work from home model created a new risk landscape, and fraudulent behavior began to rise. As a result, corporate risk managers soon found that auditors at their accounting firms, with expertise around business continuity, crisis planning and cybersecurity, became ever more valued in these uncertain times.
To help their clients survive the wave of bankruptcies that unfortunately hit with the pandemic, accounting firms suddenly had their hands full. And the numerous changes in tax provisions and rules, as well as key HR requirements, left businesses turning to their accountants to help them navigate through it all.
Given new areas of focus, serving as a resource for clients began to require a multi-tiered approach. Firms learned to productize their new value-added services and make self-service, knowledgeable articles and information available to clients.
But after that, teams at leading accounting firms found themselves stuck due to a lack of quality relationship intelligence.
To be successful in reeling in new business and expanding existing client relationships, accounting firms found it necessary to take a hard look at their contact data to make sure it was accurate and reliable. They also turned to AI to evaluate their firm’s external relationships. They needed to discover who at their firm had the background, expertise and knowledge to strategically and effectively drive not only the delivery of those services, but the growth of those services. And they needed to understand which team members had key relationships — often relationships that they did not know existed.
Without this knowledge, it is nearly impossible to expand client relationships effectively. Global access to these relationships is the first step before any of your employees can even act on them. One national CPA firm, for example, upon taking on a new plan for expansion, soon realized that unless it was able to harness data more intelligently, it would not be able to keep tabs on its vast network of relationships.
Implementing predictive intelligence and automation was an important step, delivering a significant return on investment as the firm discovered thousands of previously uncovered relationships (including business development opportunities) and practical insights. Having these technologies in place before the pandemic hit also made a big difference in not only surviving, but thriving during and after the crisis.
As accounting professionals look to the future, data-driven strategies, best practices, AI technologies and automation will become even more of a requirement for firms wanting to expand existing client relationships and build new ones. Firms are already acknowledging this with the recent trend toward hiring a greater majority of new hires who have a background in areas other than accounting, such as analytics, computer science, cybersecurity to name a few.
The bottom line, however, is that at the end of the day, people buy from people — no matter how much technology and process are inserted into the mix.
What lies ahead is unclear, but the role of the accountant as a critical business leader is certain. To be a better steward of clients’ corporate finances and provide the analytical insight they need now and tomorrow, firms must discover the insights and intelligence that live within their own organization. Only then will they be able to adapt to current demands and plan for a brighter future.