Bookkeeping and accounting tactics have evolved over centuries as technology has revolutionized the way we work. The first major inflection point for the industry was the launch of computers, which ultimately led to the rise of cloud software.
These initial innovations paved the way for new tools like Ignition, which helps professional services businesses to automate proposals, invoicing and payments, to bring about a better way of doing business.
By changing how professional services and their clients do business together, Ignition now serves more than 6,000 customers worldwide across industries like accounting and bookkeeping. Since inception 10 years ago, Ignition has helped accounting and service-based professionals engage over 1.1 million clients and get paid on time by facilitating over 6 million payment transactions.
But as the US accounting industry reaches a turning point, accounting, bookkeeping and tax professionals need to prepare for the next decade.
The industry is at an inflection point
In 2020, according to the Association of International Certified Professional Accountants (AICPA), 75% of CPA professionals reached retirement age(according to AICPA), and as a result, the industry has been strained by the acceleration of the talent shortage. In addition, the industry is experiencing rapid adoption of technology—it is estimated that around 75% of revenue for professional services businesses will come as a result of digitization efforts, within the next few years.
We also are seeing major institutions, like the IRS, accelerate the modernization of their operations in order to streamline their practices, and thus, others will need to follow suit. In order for firms to thrive during this inflection point, it is important to balance the use of technology while keeping a human touch.
This hybrid approach to accounting will become the hallmark for the next generation, and firms will need to unlock their own approach in order to remain competitive and attractive, especially if they wish to sell.
Unleashing “Accounting 2.0”
Along with the shift towards technology, client and consumer expectations from their accountants have shifted. Similar to ride share services, customers expect certainty on things like pricing and arrival time, so engaging with an accountant should not be any different. Clients’ perception of their accountants, bookkeepers and tax experts has changed beyond the transactional work they typically provided.
As we move into an uncertain 2023, clients are seeking transparency and certainty from their financial and business partners more than ever before, especially when it comes to pricing—they want to be clear about the scope of services and the costs associated. With these shifts in mind, it is essential firms continue to stay abreast and evolve with client expectations.
As the profession steadily shifts to digitization, accountants, bookkeepers and tax professionals may feel less burdened when addressing time-consuming compliance matters for their clients. During the height of COVID restrictions, many small businesses leaned on their accounting teams for advisory support in order to navigate the once-in-a-generation event, ultimately accelerating this shift across the industry.
By changing how professional services and their clients do business together, Ignition now serves more than 6,000 customers worldwide across industries like accounting and bookkeeping.
Firms and their teams are now implementing any number of client advisory services (CAS) to address deeper client needs, whether it’s improving cash flow, helping with people and HR advisory or identifying new business opportunities rather than just the one-off, data entry work in the lead up to tax season. CAS strategies are not going away anytime soon, especially as this new era of accounting is being ushered in.
It is incumbent upon all accounting pros to understand how to communicate a firm’s value to new and existing clients along with pricing services and approaching new ways of billing, in order to remain profitable.
Succeeding Over the Next 10 Years
In order to withstand the next 10 years and beyond, firms need to think about the long game—building a more sustainable, efficient and profitable business. There are two key issues to consider:
- Adopting cloud technology and scaling through automation — In order for firms to focus on the bottom line, implementing technology to automate mundane and time-consuming processes will help streamline administration work and leave more time to focus on revenue-generating advisory services. For example, tools like Ignition can help accounting professionals automate letters of engagement to save time, and reduce outstanding AR by helping firms change their billing models and automate payment collection.
- Rethinking billing models — To meet client expectations around greater pricing transparency while maintaining revenue predictability, it is important for firms to approach new ways of billing. For example, moving away from hourly billing to more consistent and predictable up-front and recurring billing models.
Embracing technology, reevaluating billing models and keeping a client-centric and human touch at the core of the business, will help catapult the next wave of accounting and set up future generations for success.
Matthew Kanas is Managing Director at Ignition, North America.
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