Accounting firms that add business consulting and IT service lines report growth that eclipses that of adding financial services, according to a recent report from SourceMedia.
Nearly half of the 298 CPAs and tax professionals surveyed by SourceMedia Research reported that adding business consulting and IT services lines brought high to moderate growth, where less than 1/3 of those who reported adding financial services lines reported growth at those rates. That trend was consistent across large and smaller firms.
Adding capacity and products in IT services and business consulting is crucial as customers increasingly look to their CPAs and tax partners for help beyond controlling and bookkeeping, according to a recent Oracle NetSuite webinar conducted with SourceMedia’s Accounting Today trade publication. This is particularly important as the role of the CFO continues to evolve from “bean counter to business model strategist,” as Constellation Research Founder and Principal Analyst Ray Wang puts it in his research, “The Rise of the Postmodern CFO,” which is cited in the survey.
“CFOs are increasingly driving the business and relationships from a sales side,” Mike Kean, a CPA and Partner at Sikich’s Technology Group, said on the webinar. “Clients are looking at their accounting and tax partners to give them the information—not just spreadsheets—that they need to make decisions. CPAs are no longer compilers of information but advisors.”
When it comes to augmenting IT services, firms see promise in adding ERP practices. Of those firms surveyed, 20 percent said that they would likely consider adding an ERP practice in the next 12 to 18 months. They see that expansion as a huge opportunity to improve the client relationship, offer competitive advantage and engage the next generation of clients, according to the survey.
“Businesses are looking for a strategic partner that cares about their business and adds value instead of a commodity like accounting or auditing,” Tom Kelly, Senior Director of Product Marketing and Development for Oracle NetSuite said on the webinar.
A lack of experience and resources were named the biggest challenges in launching an ERP practice. Choosing an easy-to-use system that offers a clear cost/benefit analysis, while also being flexible and easily scalable to meet the needs of firms of different sizes, is a key to success. Cloud-based ERP allows accounting professionals to interact with clients, and access and monitor key financial processes. Working with their clients, they can use the visibility the system offers to help develop and build new experiences that differentiate their clients’ businesses – such as accelerating expansion into new markets, implementing new billing models, or developing new sales and distribution channels.
“Making applications like ERP readily available on any device in a very consumer-friendly way has been a huge intermediator to bring accounting and tax firms closer to their clients,” said Craig West, Vice President of Alliances and Channels at Oracle NetSuite. “They can verify journal entries, trial balances and check financials efficiently.”
In all, the firm becomes a trusted advisor and partner in innovation, not simply an interpreter of historical financial reports.
“If you can use technology to make your clients more efficient, they become more profitable, which in turn will make them more profitable clients to you,” Sikich’s Kean said.
View the full Accounting Today report and our one-hour on-demand webinar based on the data here.
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