It is a truism to mention that digitalization is transforming the professional services companies (Accountants, Auditors, Tax Experts, Legal) and that they must adapt.
More companies are reinternalizing accountancy using software that processes accountancy tasks. It becomes usual that an employee leaves an accountancy company to go to a former client to support the reinternalizing process.
The emergence of the accountancy’s platforms is a new competitor that commoditizes the services and leads Accounting firms to lower the pricing.
HOW WILL ACCOUNTING FIRMS REACT TO THESE CHALLENGES OVER THE NEXT 5 -10 YEARS?
The largest ones will buy an IT company to develop their technology, and IT companies will buy the medium ones. Many will merge to reach the critical size with fewer employees but with the same number of partners. Very likely, Accountancy firms will reduce their costs by laying off Senior Accountants who will face the same situation of the blue-collar workers when production moved to China. Senior people will develop their practice adding even more pressure on fees, but the competition with IT companies will be fierce.
From our conversation with Accountants, many of them anticipated this situation and invested in replacing human interaction with more technology expecting their loyal clients to finance these investments.
But few Accountants expect to lose clients due to digitalization, which also means a change in clients’ habits, and the signal to check what the competition offers. But today competition is software, and it is cheaper.
Still, Accountancy firms can manage the threat differently. They can develop a recurrent source of income by leveraging the relationship they built with their clients while reinforcing their position of Advisors.
Banks use to say that if a client has less then three products, it is a volatile client. Facing the digitalization and the emergence of new competitors more agile, Banks have proposed more services to their clients, and Accountancy firms must adopt the same strategy.
Proposing new services means that Accountancy firms recruit specialists and make new investments. Investments and additional expenses are not realistic when the future is uncertain, and the company is considering restructuring. Besides, legacy is complex to manage as Partners fight to protect their status quo, jeopardizing new ideas, and easing the path for more agile competitors.
OPERANDI PROPOSES A NEW IDEA FOR PROFESSIONAL SERVICES COMPANIES TO MITIGATE THE RISK OF LOSING CLIENTS, AND TO DEVELOP NEW SOURCES OF INCOME
Accountancy firms have three main assets: brand, employees, and clients. Disruptors have new solutions, but they lack reputation, clients, and sales force.
Operandi recommends a partnership in which accountancy firms sell third-party services to complement the core activity and reinforce their clients’ relations while developing a recurrent income.
Operandi selects the solutions, monitors the providers, helps the accountancy firm to implement these new solutions within its portfolio of services and supports the sales.
Operandi developed a portfolio of solutions around Business Information, Debt Collection, Compliance Solutions, and Financial Planning for individuals. All these services are today promoted by accountancy firms and reinforce their status of Advisors.
Operandi started in 2016 intending to help professional firms (Accounting, Audit, Tax, Legal) and independent Advisors. In the last four years, we have been building partnerships and knowledge that created a virtuous circle between trusted partners. Operandi currently works with 29 partners that are accountancy firms, chambers of commerce, independent advisors, and suppliers of solutions.
We are proud that we developed a growing business relying on integrity, loyalty, and transparency.
Karim Kheirat and Elena Paraschiv-Pop develop Operandi. Karim has developed similar solutions while working at JP Morgan, UBS, and KPMG. Elena is a marketing specialist who worked for accountancy firms. They also worked together in a Business Information company while Karim was the country manager and Elena, the marketing manager.
Operandi has developed solutions for large accountancy firms and independent advisors, for any information, please contact us on Linkedin and check www.operandi.ro
WHICH SERVICES OPERANDI RECOMMENDS ACCOUNTANCY FIRMS TO PROMOTE?
Business Information is the services around the credit commercial that a company gives to its clients. Before delivering an order, every company must assess its client’s ability to pay the invoice. Small and medium companies use outdated financial data from the Ministry of Finance to do it while large companies have their team to perform clients’ analysis. Accountancy firms can provide their clients with reports done by analysts to mitigate the risk of unpaid invoices.
Debt Collection: without a dedicated debt collector, companies often have unpaid invoices. If there are outstanding invoices over 3 months, the situation is critical, and every additional day decreases the chance to collect the money. Accountancy firms are well-positioned to alert their clients on the risk of unpaid invoices and to recommend a specialist to speed the collection.
Compliance solutions: The compliance pressure is increasing, and companies must apply new rules (UBO, KYC, anti-corruption, GPPR) to avoid substantial penalties. These are new operational risks for companies that combine regulation, process, and technology that accountancy firms can promote to their clients.
Financial Planning for individuals is a solution promoted by numerous accountants, lawyers, and notaries in western Europe. It is mainly to check the adequacy between the saving and the family’s financial goals: purchase of a house, prepare the retirement, finance the college fees. Once a year, the financial planner updates the “family report” and proposes actions. The users of these services are usually executives, entrepreneurs, and sportives that experience substantial incomes for a short period of activity.
Article republished from Operandi – https://operandi.ro/an-idea-for-accountants-to-develop-their-activity/