A new white paper from Prime Financial Group urges traditional accounting firms to diversify their service offerings in order to survive and thrive into the future as revenue from compliance work (the bulk of work for most traditional firms) continues to fall.
Prime Financial Group pointed out that forward thinking companies who combine financial and accounting service offerings are seeing demand continue to swell as the popularity for such combined services increases throughout Australia.
“Progressive firms are now aware that to avoid losing revenue you need to provide more advisory services in order to grow your client base and help those clients achieve their financial goals. The clear message is that while accounting firms aren’t offering a diversity of service, they will struggle,” explained CEO & Managing Director of Prime Financial Group, Simon Madder.
This white paper comes in the wake of a Commbank Accounting Market Pulse Report released in late July of this year. It also highlighted accounting service diversification as integral to firm survival and growth into the future.
The Report was compiled using a survey of the country’s leading accounting firms to gain industry insights and spot trends. The major trends identified were:
1. Most of the firms who had adopted innovative strategies and diversified services expected to see their revenue from non-accounting services increase over the coming year to 2 years.
2. Larger accounting businesses are partnering up with specialised firms to broaden their service offerings and add value for existing clients. Ensuring a win-win scenario for both firms.
Paul Jansz, CEO of AMMA Private Equity believes changing & diversifying the traditional accounting model is inevitable in order for accounting firms to remain viable. Each firm will need to evaluate all the diversification strategies available and decide which suits their business best.
“While some accountants may merge with financial planners to provide the full financial service to their clients, for others in the industry this approach may not be the best. Many accountants are keen to retain their independence and bolster the practice they have worked hard to build,” said Mr Jansz.
With digital disruption shaking accounting up, it is important firms also look to cloud solutions to counter-balance the loss of what used to be a steady stream of compliance work, as well as reduce its cost and free up accountants’ time so they can focus on value adding and engaging with their clients.