Small Business Accountant Services: Maximizing the Accountant-Client Relationship
By Heather Sperduto, Executive, ADP Accountant Channel
According to an ADP survey, 90 percent of business clients are interested in advisory or consulting services from their accountant. Yet more than half admit they are not fully utilizing their accountants for the breadth of services and insights they can offer.
Small- and medium-sized business owners (SMBOs) are busy. They're hiring employees, creating a business strategy and keeping customers and clients happy. With all that to manage, it's no surprise SMBOs traditionally reach out to accountants only once or twice a year to schedule an annual audit or file tax returns.
But this relationship is changing. While traditional tax, accounting and audit services remain a foundation of small business accountant services, today's SMBOs want more.
According to an ADP survey, 90 percent of business clients are interested in at least one advisory or consulting service from their accountant. Yet more than half admit they are not fully utilizing their accountants for the breadth of services and insights they can offer. Understanding how accountants and SMBOs can work together more closely could bridge this gap.
The evolving role of the accountant
Traditional accounting services focus on transactions (such as recording income and expenses) and compliance (such as preparing financial statements and tax returns). These services are necessary and will continue to be necessary to help SMBOs comply with tax laws and financial reporting requirements.
But the business world is constantly refining the best practices for how, when and why things get done — and that includes business accounting. Clients are turning to their accountants as trusted advisors to help them navigate uncertainty and prepare for whatever is next. This evolution from a compliance-focused role to include advisory services is a win-win for accountants and their clients because these services can help ensure the survival and growth of small and mid-size businesses while also providing new revenue streams for accountants.
According to a recent study by the ADP Research Institute, 78 percent of accounting professionals said they need to move beyond traditional accounting services to survive. When we asked clients what services they want from their accountants, 62 percent said talent management insights.
Other potential advisory and consulting services include:
- Cash flow forecasting
- Budgeting
- Technology stack implementation
- Systems integration
- Process automation
- Business planning
- Financing and loan applications
- Operations reviews
- Profitability consulting
- HR, payroll and employee benefits
- Key performance indicator (KPI) monitoring
- Industry benchmarking
- Strategic planning
But in the landscape of the accounting profession, there's a disparity in the services being offered. For example, when looking at the data by generations, next-generation firms are offering HR-related services 72 percent of the time compared to 34 percent in baby boomer firms and 63 percent for Gen X firms.
Leveraging technology for expanded small business accountant services
The good news is that integrating technology into accounting services has been a game-changer. It has accelerated the ways accounting professionals can broaden their suite of services and expand into advisory work.
What's held most accountants back from offering these services isn't a lack of expertise but a lack of capacity. It's tough to find time to dig deep with clients when they're continuously pushing to meet the next deadline.
Today, accountants can automate time-consuming administrative tasks, freeing time to focus on providing more value-added services and making a bigger impact on their clients' businesses. The right mix of tools, technology and support builds an infrastructure for firms to thrive in their consultative practice.
Payroll data as a gateway to business insights
So, where to start? Fortunately, most accountants already have a treasure trove of data from which to build their advisory practices: payroll data. These analytics can be a starting point for a conversation about many aspects of running a business, from seeking out talented employees to preparing for retirement.
For example, when an accountant sees a client has payroll in a new jurisdiction, this might prompt a discussion on sales tax nexus in a new jurisdiction. When a business hits an employee count threshold, it can prompt compliance updates, such as conducting HR-related training or updating employee benefit plans to comply with state-specific mandates.
Access to the data is critical, but the real value comes from helping a business owner make sense of it. That's where an accountant's keen insight comes into play.
Overcoming hurdles to service expansion: The accountant's perspective
The transition to offering a broader range of services can be challenging, particularly in terms of packaging, pricing and internal training. However, clear communication and a strategic approach to service model transformation can help overcome these challenges.
For accountants, the biggest challenge is often moving away from billable hours to a value-based pricing model. It's simply not feasible to charge by the hour for advisory services.
If a client asks for advice on structuring compensation and benefits for a new C-suite hire, and you save them $40,000 in a 20-minute phone call, is that advice truly only worth one-third of your hourly billing rate? Even the client would likely agree it's worth much more.
Get a clear understanding of the services you can offer, and package and price them in a way that communicates your value proposition.
Often, as accountants expand their service offerings, they realize they've been offering advisory services all along and, in some instances, weren't charging for their expertise. Training and upskilling your team to align with the firm's business model is essential.
Launch this webinar anytime: Pricing Must be Client-Centric
Finding the right advisor: The client's perspective
For business owners, selecting an accountant who offers comprehensive support is crucial. Seek out accountants who are not only knowledgeable but also curious and proactive in providing insights and solutions that can elevate the business to the next level.
If you don't hear from your accountant outside of the annual tax filing or audit season, ask what else they offer. They might have a whole suite of services they haven't communicated with you. In our fast-paced world, it's OK to slow down occasionally and ensure you're getting the most out of your relationship.
Your accountant can do a lot more than handling your small business accounting and filing your taxes. If your accountant uses ADP's Accountant Connect SM, they'll have access to an extensive library of resources for adding value to your business, including compensation benchmarking, cash flow management, HR compliance, client insights, industry reports and business valuations.
When you hire the right accountant, they'll use their talents and technology to help you reach your goals, whatever those goals may be.
