Small business owners need help with their business bookkeeping and they certainly need accounting professionals to prepare the annual business tax returns. It would seem that these needs are two sides of the same issue, but many accounting professionals just don’t see it that way and continue to approach tax preparation and financial reporting as standalone services.
These are the firms that fail to differentiate themselves from their peers. They are the firms that will continue to struggle with client acquisition and value billing because their services are not perceived to be of particularly high value. Business owners are looking to get as much value as possible from each expenditure; the price of a completed tax return may be viewed as being too high if there’s nothing else provided.
Besides, what makes one tax return better than another, if they are both accurate?
Many accountants and tax preparers simply don’t recognize the additional value they could deliver to their small business clients, if only they would become more involved at the beginning of the accounting process where the information is generated and collected rather than taking a purely after-the-fact position and reporting only at the end of the cycle. Providing information after it is too late to do anything about it has little value in today’s fast-paced and competitive landscape. Small business owners tend to rely on those who help them; if your professional practice isn’t helping your clients in tangible ways, they will find someone else who does.
The unfortunate thing is that many accounting professionals fail to understand how their involvement in their clients’ operational and bookkeeping processes can make producing the tax return easier and become the foundation to offer even more valuable – and profitable – services to the same client. Competitive influences drive every market, and accounting and tax is not immune. The IRS estimated in 2010 that between 900,000 and 1.2 million paid tax preparers were operating in the United States. With increasing pressure from retail and do-it-yourself providers, tax professionals and accountants are facing more competition from more sources every day.
The professionals who demonstrate their value in meaningful ways, and efficiently find and drive additional revenue and work through existing client engagements, are the firms who will have staying power. For most businesses, getting new clients is harder than keeping existing ones, so offering more and more valuable services to existing clients should make sense, especially when it provides the means for differentiation and allows the firm to stand apart from the very crowded tax and accounting providers market.
Yet, accounting and tax professionals are “old school” in many ways. It can be a challenge getting them to see the value of introducing bookkeeping, consultation, or other services to the firm and clientele. While cloud solutions and connected technologies now exist to ease the integration and performance of these services in the practice, professionals continue to resist change. Bookkeeping services were once viewed as burdensome, low-margin work to be outsourced or avoided altogether. As a result, tax and accounting professionals stepped back from delivering this service, leaving room for bookkeepers and software consultants to step in.
The realization now is that this level of service – the attention to operational details and managing daily processes – is where the accounting professional’s expertise should initially be applied.
By helping clients establish better, more efficient processes for creating and managing business information, the accounting process benefits through more timely, more accurate management reporting and financial data. The ultimate result is a better-informed client who sees far more value in their “trusted advisor” than just a completed tax return.
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