Inovautus Consulting has made a tradition of sharing an annual growth trends and prediction report based on what our team has seen and heard in accounting firms across the US. In 2016 we shared several observations and possible predictions; let’s see how we fared:
2016 Prediction Outcomes:
Non-Compliance Services Growth
This was absolutely on point for 2016. At Inovautus, we watched as firms across the US invested in Non-Compliance Services. To build this area, several firms turned to acquisitions, while many large and regional firms invested through hiring, marketing and business development. Small and mid-size firms still have some work to do, but many are beginning to seriously explore this area of service. We believe these investments will continue to grow and that we will start to see more mid-size firms break into this area over the next year.
While we didn’t see as much movement in these areas as we had hoped, we did see some. Firms are beginning to embrace the concept of flat-fee billing, but not in traditional compliance services. We think the primary obstacle to service bundling and flat-fee pricing is a lack of experience, process and framework. Many firms struggle significantly with properly scoping work. Most of the firms applying this approach are doing so with consulting services, which lends itself more naturally to this type of fee structure. For many firms, consulting is a new feature, and practitioners are almost forced to develop a scoping framework to know what to even offer. We think packaging and bundling services will continue to gain traction throughout 2017, but only if firms can get a handle on properly scoping projects.
Decision-Maker Demographic Transition
We are happy to share that we saw firms making very good strides in transitioning work and leadership to the next generation of partners and managers over the past year. We are seeing this positive shift continue through multi-year transition plans for retiring partners and business development training for new managers and partners.
Firms are wholeheartedly embracing virtual/flex programs. We believe 2016 was a tipping point for many organizations. While firm leaders have traditionally talked about interest in providing virtual or flexible work options, they haven’t always developed the concept or put it into practice. As client expectations and technologies evolve, we believe virtual service will become standard operating procedure for most firms. We are seeing firms start to solidify the procedures and protocol to support this transition.
Investment in Softer Benefits
While it wasn’t an original prediction, 2016 was the year of employee benefits improvement and mostly in soft benefits like paid time off, maternity/paternity leave and dress code policies. We watched as firms from small locals to the big four and national firms rolled out competitive soft benefit packages in the hopes of attracting and retaining key talent.
2017 New Predictions and Trends:
International Business Is Trickling Down to Smaller Firms
Over the last year, we have seen a large uptick in the number of international requests. While large regional and national firms have traditionally been on the forefront of this work, we are seeing smaller firms finally feeling the impact of the global changes. This is presenting both opportunities and challenges.
Training & Management
Training and development has always been important, but this year these disciplines will be even more prevalent. As firms transition leadership and business development responsibilities to younger managers and staff, we would like to see them taking a more proactive approach to training and developing in non-technical areas like management, leadership, communications and business development. The trend toward training is being driven by firms that need to build their partner bench strength but find they don’t quite have the management skills required for success. That being said, training and development is also just good business practice.
Evolving Business Finance Technology Will Change How CPA Firms Deliver Compliance Services
Compliance services will need to evolve as new finance technology emerges. Blockchain technology has made significant advancements, with more than a billion dollars invested into this database over the past three years. Many banks have the blockchain and are playing around with it. It won’t be long before this technology completely changes the way firms audit and do tax returns. If you aren’t exploring it now, your firm may struggle to make the necessary changes to survive. (See non-compliance services above)
Influencer Marketing Will Become More Personalized and Creative
Digital advertising and media have created a lot of opportunities to reach target audiences, but the changes around privacy control are making it increasingly difficult to get mass-distributed emails through or have advertisements seen. While influencer marketing has never diminished in its importance, we believe we will see a resurgence of programs designed to reach individual COIs and prospects directly. The reinvestment of influencer marketing will go well beyond traditional networking or joint events. We believe we will see more firms creating truly unique opportunities to build brand awareness and gain access to these individuals within their target markets.
We are excited about the many trends and changes we are seeing in the profession. As we work with firms to help embrace new trends and the many other changes they face, we continuously remind firm leaders to find the right balance between what continues to work today and what will need to be developed for tomorrow.
Have questions about these trends or growth in general? Contact one of our team members at firstname.lastname@example.org to learn more about how we can help you grow faster and in the right direction.