Members tell us* that an increasing number of factors are combining to create the perfect storm for small accounting firms. Find out what you can do to stay relevant and protect your firm from taking a battering.
Cost pressures – shrinking revenue from compliance work
Technology continues to impact the supply of compliance work. As the ATO focuses on automating and simplifying tax returns, many believe the pool of compliance work is shrinking.
Accounting firms, including many small firms, are now being forced to send low-level work offshore to maintain margins and benefit from lower cost labour overseas.
A number of other factors - including the push towards a fixed-fee model, the increasing competition for the provision of tax services, and the increase in the number of virtual firms offering lower cost services - are also putting downward pressure on fees.
Client pressures – clients demanding more
Clients remain price sensitive and value conscious post-GFC, and increasingly want more than compliance services from their tax accountant.
Feedback suggests they want a closer working relationship that includes strategic advice to help them grow their profits, their wealth, and the value of their business.
And as cloud based software continues to change the way clients and their accountants interact, practitioners are expected to work much more closely with clients and in real time.
Employee pressures – protect your number one asset
Staff recruitment and retention issues continue to plague firms and small firms are not immune.
Younger professionals are on track to have at least 15 jobs over their working lives.
To attract and retain talented employees, firms must support the growth and development of staff through training and up-skilling.
What can you do to survive?
As the landscape for small accounting firms continues to change, it becomes increasingly important for smaller practices that traditionally relied on compliance work, to grow the advisory side of their business. Firms must demonstrate their ability to add real value to their clients if they want to remain relevant and profitable.
The Tax Institute is now offering a new ‘Compliance to Advisory’ training program designed to support suburban and regional practitioners who want to grow the advisory side of their business.
If you want to build on your solid compliance base and offer the advisory support your clients need, and/or build the advisory skills of your staff to not only increase the value they can provide to clients but to support their growth and engagement, then this program is for you.
We will be running a pilot session of the new 'compliance to advisory' program in Parramatta on Thursday 30 April. This full-day session will be run at a significantly reduced cost. To register your interest and find out more, please email email@example.com.
*Member surveys and focus groups undertaken in April 2014 as part of The Tax Institute’s Lifecycle Project.
Jessi Towns is National Project Manager at The Tax Institute.
Australia’s leading professional association in tax. Its 13,000 members include
tax agents, accountants and lawyers as well as tax practitioners in
corporations, government and academia.