How to develop your accountancy practice’s competitive advantage
It used to be that you could win clients from the high street. Today, when people look for an accountant to serve their business needs, they’ll go further afield to find them.
Competition is everywhere.
Sage research says that 84% of small and medium-sized enterprises (SMEs) consider accountants critical, while 49% go to them for advice.
Potential clients may choose you because they can’t get what they need from their existing accountant.
If you have deep experience in a client’s area, your ability to examine their specific business and financial issues will be your competitive advantage because other accountants won’t or can’t.
Bobby Lane is the CEO of Factotum, a firm that advises businesses on different areas of their finances. He believes that offering additional advisory services isn’t just about keeping ahead of the pack—it’s necessary.
Bobby says: “Practices must be able to offer a broader service offering or will cease to exist in the future.
“This means working with clients in areas that may be lacking within their internal skill set, such as payroll, forecasting, preparing management accounts, staff incentive schemes, and more.”
In this article, we offer advice that will help you to develop your practice’s competitive advantage.
Here’s what we cover:
What is your competitive advantage?
Your accountancy practice is in a great position to become a trusted partner to clients.
You could win opportunities by marketing yourself as a financial specialist in tune with a specific area of their business—such as insolvency, tax, auditing, consulting, or payroll.
But first, you need to sit down and lay out what services you can offer.
At this point, it isn’t about understanding what you’d like to do but more about understanding what you can do.
Look at your clients, understand the capabilities of your team, and review your plans.
- What skills and experience does your team have?
- What specialist industry experience does your team have?
- Where are you based?
- What is the nature of your existing client base and the new clients you’re going after?
- What are the main industries your clients operate in?
- What interests you?
- What industry or area of accounting gives you a buzz or encourages you to go that extra mile?
Once you understand your practice and capabilities, you’re in a good position to provide the right clients with exactly what they need.
Scale your business advisory services
You may already be offering business advisory services ad hoc, but you should look at scaling them out, looking at your clients carefully to see what they need and what you should charge for.
Some clients are looking for an accountancy practice that extends their management team—where you can solve their problems, explain what’s going on in their business, and support them on their journey.
You want to get under the bonnet of a business and fix whatever problems it has with its engine.
It means looking at past performance to understand how they got into their current position and then using that insight to help them reach future goals.
Of course, this demands more time and effort, but clients could be willing to pay your accountancy practice more, as they will be more profitable in the long run.
There may come a time when your client grows to a point where they want a service you don’t necessarily have expertise in.
That’s where you need to think about adding more strings to your bow.
How to add specialisms to your accountancy practice
Adding a new advisory specialism may be easier than you think.
It could be as simple as hiring someone new with the right skills—like finding somebody with deeper regulatory expertise in a particular industry or experience working with Software as a Service (SaaS) finances.
Or you could give somebody the freedom to form a business unit within your practice. You might even fund training for people if they need specialist qualifications.
You could offer accountancy specialisms within industries.
While accounting fundamentals don’t change, somebody specialising in accounting for the building industry will have a unique experience set and focus compared with an expert in accounting for the food and drink industry.
If you develop a specialist niche and market that fact, finding new clients may be easier because the word spreads quickly throughout industries about accountants who understand the quirks of a particular business type—if you position and market your practice to take advantage.
Ask yourself the following when specialising in a particular business industry or area of accountancy.
- When do I plan to become more specialised?
- Is it a gradual process, or can I do it immediately?
- When should I stop chasing general accounting or bookkeeping customers?
- Can I partner with other accountancy practices and take more valuable customers who match my specialism while they manage the more general work?
- Do I need qualifications or accreditations to attract customers in my specialist area?
Turn up the volume on what your practice offers
Having a competitive advantage is useless if prospective clients don’t know who you are. Your dream clients might be out there, but your accountancy practice needs to win their attention.
It’s not just about winning new clients.
Business needs change constantly, and there may be opportunities to upsell your existing clients, where you gently persuade them to sign up for additional services.
Self-employed accountants must sell themselves. You could be the most incredible accountant in the world with the ability to help any business, but if you can’t sell your services to a client, neither of you benefits.
Selling isn’t about hustling a client.
Correct consultative selling is about standing alongside a business owner and building a long-term relationship where you overcome their problems and help them meet their goals.
When selling your services to a client, aim to:
- Understand their goals
- Identify their obstacles
- Recognise their current circumstances
- Understand the speed they want to move at
- Agree on the services they need now
- Outline the services they will need in the future.
Take advantage of client data
Any client wants value for money, and if you can find ways to prove they are getting it from your relationship, they’ll happily stay with you, even if a competitor tries to poach them.
Cloud technology allows your practice to have a 24/7 view of client data—everything from core ledgers to invoices and the timing when payments are received.
Technology opens a world of possibilities for improving client service.
Your practice can offer proactive advice moving forward, such as fully informed tax planning, where you spot problems before they have a chance to occur.
It’s all about client relationships
Your role as an accountant can grow and evolve in practice, and as you gain more experience, you’ll build stronger client relationships.
Once you’ve analysed your practice and defined your approach and competitive advantage, you’ll be in a great position to build and develop your client base.
To wrap up, here are three final takeaways to help you stand out from your competitors, while providing your clients with the service they need:
- Improve the client experience by offering the advisory and consulting services you’re good at.
- Improve and add to your existing services.
- Make better use of technology so you can better understand your clients.