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Randy Johnston, shareholder, K2 Enterprises, is a nationally recognized educator, consultant and writer with over 40 years of experience in strategic technology planning, accounting software selection, paperless systems and network integration, and business continuity and disaster recovery planning. |
Plus seven tech keys to a holistic service model.
By Randy Johnston
The Holistic Guide to Wealth Management
In order to provide clients with the holistic service model that we’ve explored throughout our book, you’ll need a technology stack that can keep up.
MORE Rory Henry and The Holistic Guide to Wealth Management
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There are seven important reasons why a holistic service model is particularly beneficial for accounting professionals. Below I’ll explain how having the right technology in place will significantly facilitate your transition from tax preparer/financial historian to trusted holistic advisor.
1. Enhanced Client Relationships. By offering a comprehensive suite of services, accountants can become trusted advisors to their clients, forging deeper relationships beyond transactional interactions. In addition, a suite of services helps retain clients and fosters long-term loyalty.
- Efficiency and Automation: Technology can automate routine tasks, freeing up time for CPAs to focus on strategic advisory services. For example, cloud-based software allows you to be more responsive while communicating faster and more accurately.
- Data Analysis: Advanced data analysis tools can help CPAs provide more insightful advice based on real-time data.
- Client Communication: Digital platforms can improve communication, making it easier for clients to access information and interact with you.
- Personalization: Technology allows for better segmentation and personalization of services, which can enhance the client experience.
Padgett is an example of a firm that has successfully leveraged technology to improve client relationships. Padgett’s chief operating officer, Amanda Aguillard, CPA, believes that being “tech curious” is more important than being “tech savvy.” She encourages accountants to explore what technology can do for your clients and staff. By embracing technology, Padgett has been able to support clients in a far more proactive way, leading to deeper, more prosperous relationships.
2. Cross-Selling Opportunities. A holistic service model creates opportunities for accounting professionals to cross-sell additional services to clients. For example, an accountant who manages a client’s bookkeeping may identify opportunities to offer tax planning, financial planning or business advisory services, thus generating additional revenue streams. Let’s take a closer look at how this might work:
- Data Accessibility: Technology can mobilize large product datasets from internal systems into an easy-to-use app. Doing so helps teams access crucial information, whether they are online or offline.
- Relationship Building: Technology can help strengthen relationships with clients, which is vital for successful cross-selling. For instance, one CPA firm I know achieved an 80 percent success rate within 12 months of starting the cross-selling initiative with firms whose “rainmakers” had strong relationships with relevant decision-makers.
- Sales Enablement Tools: These tools make it easy to track and report activities in the field, where cross-sells are most likely to occur.
Cross-selling is instrumental to developing and expanding a successful practice. Cross-selling can help counter “revolving door syndrome” in which firms focus hard on getting new clients in the door but struggle to retain them as the service levels drops once the relationship is established.
Cherry Bekaert LLP and Parr & Associates, among others, are examples of firms that are accelerating growth thanks to successful cross-selling. Firms that keep their eye on existing clients’ needs at all times, not just when they need more revenue, will find they have happier, more devoted clients. Happier clients are more inclined to stay with the firm through the good times and bad and are more likely to sing your praises to friends, family and business associates.
3. Value-Added Services. By providing a wide range of services beyond traditional accounting tasks, accounting professionals can position themselves as valuable partners in their clients’ success. Value-added services may include financial planning, risk management, business consulting or technology advisory, which can help clients make better informed strategic decisions and drive growth. Let’s see how having the right tech stack improves your ability to provide value-added services:
- Automation: Technology, particularly cloud-based accounting technology, is used to automate repetitive and tedious tasks, creating efficiencies that free up accountants for more meaningful work. This includes automating day-to-day accounting activities, initial data collection, preparation, review and final delivery. Automation not only saves time but increases revenue and boosts staff engagement levels.
- Advisory Services: Accounting technology provides a solid foundation for streamlined accounting processes and automated tax workflow. This frees up your time to focus on serving clients better with high-margin advisory services. Shifting outside of traditional tax compliance positions you as the trusted advisor or consultant to both individuals and businesses.
- Real-time Financial Insights: Accounting firms can leverage accounting software and other technological tools to streamline processes, improve efficiency and provide real-time financial insights to clients. This can include such features as automated bookkeeping, cloud-based collaboration and advanced data analytics.
The field of accounting has undergone significant changes as software programs and cloud-based tools have revolutionized how accountants work. Today, accountants can access real-time data and analytics from anywhere in the world, allowing them to make better decisions and provide more accurate advice to their clients. This is a dramatic improvement from the days when accountants relied heavily on manual processes and had limited access to real-time data.
Technology has improved the speed and security of the accounting process. Again, it has freed up accountants from burdensome bookkeeping and compliance, to focus on value-added services and advice. Technology can mobilize large product datasets from internal systems into an easy-to-use app, helping teams access crucial information whether they are online or offline. Farmand & Company, Genske, Mulder & Company LLP, and Marcum LLP are examples of firms that have made an impact for their clients by providing value-added services.
4. Competitive Advantage. As the business environment becomes increasingly complex and competitive, a holistic service model enables you to differentiate your firm from competitors who may only offer a narrower range of services. A holistic service model can help you attract new clients and bolster your reputation as a comprehensive financial solutions provider. Let’s see how the right technology can bolster your firm’s competitive advantage:
- Cloud-Based Solutions: Cloud-based accounting solutions allow accountants to manage their work from anywhere, at any time, and give access to people all over the world. This flexibility can be a significant competitive advantage.
- Artificial Intelligence (AI) and Machine Learning (ML): AI and ML can be used for predictive analysis, for decision-making support, and for spotting unusual or suspicious activities, such as fraud.
- Data Analytics and Visualization: These tools help accountants analyze large datasets, spot trends and make informed decisions.
Amaka is an example of a firm now using cloud-based accounting solutions to create digital ecosystems where different digital tools can interact. This has significantly improved its accounting operations. Firms such as Postlethwaite & Netterville and Delerme have used technology as a competitive advantage in their practices. Both firms have modernized their tools while focusing on client needs in their respective markets. Besides traditional compliance services the firms have expanded their consulting, advisory and accounting services.
5. Adaptability. The accounting profession continually evolves, with technology and regulatory changes driving the need for new skills and services. A holistic service model enables accounting professionals to adapt more effectively to these changes and to draw on a broad range of expertise and resources to address clients’ emerging needs. Let’s see how the right technology can enhance your firm’s adaptability:
- Automation and AI: Automation is a cost-effective way for CPA firms to streamline processes and reduce labor costs. It can also help reduce errors associated with manual data entry, which is vital in an industry where compliance is essential. AI technology can be used to automate processes further by enabling CPA firms to increase efficiency and accuracy while reducing costs. AI can also help CPA firms identify patterns in large datasets that may otherwise go unnoticed. This allows practitioners to make better informed decisions about their clients’ financial situations.
- Cloud Technology: Centralizing data management, particularly using cloud technology, reduces waste and lowers costs considerably by improving communication and collaboration. Standardization and a cohesive datasphere make it easier to capture, access, share and analyze data.
- Advanced Analytics, Machine Learning and Natural Language Processing: These technological innovations empower accountants to discover insights, uncover trends, plan effectively and add an unprecedented amount of value overall.
Many firms have begun leveraging automation and AI technology in various areas, such as tax software, audit procedures, customer service, risk management and predictive analytics. For instance, some firms use automated bots to respond quickly to customer inquiries. Others use AI-powered audit tools to review financial statements more efficiently. These adaptations not only improve efficiency, but free you to focus on strategic tasks requiring creativity, collaboration and ingenuity. The firm Xendoo has been offering innovative online accounting and bookkeeping solutions, along with data-driven insights, to small business owners in south Florida.
6. Efficiency and Collaboration. By offering a comprehensive suite of services, accounting professionals can develop a deeper understanding of their clients’ businesses. This leads to more efficient and effective service delivery. Further, it enables accountants to identify service areas where they have the expertise to provide more integrated solutions. Let’s see how the right tech comes into play here:
- Automation and AI: Automation driven by AI can manage colossal amounts of data at a pace that outshines human abilities and significantly diminishes the possibility of human error. This liberates accountants from monotonous tasks, allowing them to pivot their attention toward more strategic functions such as financial planning, business analysis and consultation services.
- Cloud-Based Accounting: Cloud-powered accounting software has revolutionized the way accountants operate, providing instantaneous access to financial data from any location at any time. This facilitates seamless collaboration between accountants, clients and colleagues across geographical barriers.
- APIs in Accounting Firms: APIs can increase efficiency and reduce redundancy by enabling disparate systems to work together to compare datasets. This helps accountants automate numerous manual functions and save a significant amount of time.
Real-World Examples
Bookkeeper360 is a U.S.-based financial technology firm specializing in accounting and advisory solutions. It uses Xero and BILL cloud-based accounting, which has made it significantly easier to have accurate, up-to-date books around the clock. Meanwhile, the firm MBE CPA is using NetSuite accounting technology and cloud-based platforms for automation, sophisticated diagnostics and predictive analysis to serve clients better and to utilize its knowledge more effectively. The firm is evolving these techniques into Practice ERP.
The above examples illustrate how technology is reshaping the accounting industry, making it more efficient, collaborative and client-focused. Technology not only streamlines operations but opens new opportunities for you to provide value-added services to clients.
7. Risk Mitigation. A holistic service model can help accounting professionals identify potential risks and compliance issues across various aspects of clients’ businesses. Taking a proactive approach saves you time and money and protects your reputation and financial well-being. Let’s see how tech plays such an important role in risk mitigation:
- Improved Data Accuracy: Accounting software improves the accuracy of financial data, reducing the risk of errors.
- Increased Efficiency: It streamlines the financial reporting process, making it more efficient and less time-consuming.
- Enhanced Internal Controls: Accounting software provides better internal controls, which can help identify and manage risks.
- Better Compliance with Regulations: Technology can help firms comply with various regulations and standards.
- Risk Management Platforms: These platforms can track complex risk-and-response interactions, stimulate actions that reduce risks across the organization, and act as a single source of truth regarding risk.
CPA firms are increasingly recognizing the importance of technology to manage risks. Some firms are considering tools beyond standard Excel spreadsheets for risk management, such as ClusterSeven from Mitratech. Integrated platforms can support organizations in implementing and maintaining robust risk, control and assurance frameworks. CPA firms are also addressing risks associated with the use of generative AI. For instance, they are taking measures to ensure data privacy and security and are aware of the reliability issues of AI models. Firms are proactively detecting risks and vulnerabilities. They’re also putting measures in place to protect against breaches and active concerns such as phishing and ransomware to mitigate risks, to protect their clients’ financial well-being and reputation. While technology provides significant benefits, we must always be mindful of the risks associated with its use. This balance is key to effective risk mitigation.
Overcoming Your Three Biggest Concerns about Tech Adoption
1. Fear of Technology Itself: Some practitioners may be apprehensive about adopting new technologies because of cybersecurity and data privacy concerns or a lack of technical proficiency. Here are four helpful ways that I’ve found for firms to make the adoption and integration process smoother:
- Education and Training: Knowledge is one of the most powerful antidotes to fear. Our firm, K2 Enterprises, provides resources, tutorials and guides about using various technologies effectively. This can help increase technical proficiency and confidence.
- Cybersecurity and Data Privacy: Our firm provides updated CPE courses about best practices for maintaining cybersecurity and data privacy. Courses cover the importance of using strong passwords, enabling two-factor authentication, regularly updating software and understanding common cyber threats.
- Gradual Integration: Instead of adopting all new technologies at once, it can be beneficial to integrate them gradually. Start with technologies that are easy to understand and use, then slowly introduce more complex tools.
- Support and Assistance: Look for IT providers that will answer any questions and provide assistance. Whether it’s troubleshooting a problem or explaining how a certain technology works, they should provide you with the necessary support at all times.
Example: Let’s consider a CPA firm owner named “Chris.” Chris was initially hesitant to adopt new accounting software because of concerns he had about data security and his team’s lack of technical skills. Here’s how we addressed Chris’s concerns:
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- Education: We provided him with resources and training materials about how to use the software. These included step-by-step guides, video tutorials and live demonstrations.
- Security: We explained to Chris how the software uses encryption and other security measures to protect data. We also provided tips about enhancing security, such as using strong passwords and enabling two-factor authentication.
- Gradual Integration: Instead of transitioning all at once, Chris started by using the software for a few clients. Once comfortable, the firm gradually expanded its use to more clients.
- Ongoing Support: Throughout the process, we were there to answer Chris’s questions and provide assistance. This gave his team the confidence to integrate the software into the practice fully.
Remember, the goal is not to eliminate fear entirely, but to manage it effectively. With the right approach, firms can overcome their fear of technology and reap its benefits.
2. Perceived Complexity: Adopting a holistic service model might seem overwhelming to some practitioners, especially if they are unsure about how to transition from their current business model or are unsure about how to integrate various service areas effectively. Here are five good ways for firms to make the transition smoother:
- Education and Training: Provide comprehensive training and education to your team about the holistic service model. This includes understanding the benefits, how it works and how it can be integrated into your current practices.
- Step-by-Step Transition: Instead of a complete overhaul, your firm can transition gradually. Start by integrating one service area, understand its impact, and then move on to the next.
- Leverage Technology: Modern technology can simplify the process. There are numerous software and tools available that can automate and streamline various aspects of the holistic service model. The most common tools for automation and streamlining include practice management products such as Canopy or TaxDome; portals such as Liscio, Suralink, HubSync, Truss and StanfordTax; and AI automation such as Black Ore Tax AutoPilot, Additive, Aider or 4ImpactData. We expect even more assistance in client accounting services and in advisory.
- Consultation and Guidance: Seek advice from tech experts or other firms that have successfully adopted the holistic service model. Their experience and insights can be invaluable.
- Change Management: It’s important to have a well-planned change management strategy. This includes communicating the change effectively to your team (and clients), addressing their concerns and providing support throughout the transition.
Remember, change is often met with resistance. It’s important to address the concerns of all stakeholders and make the transition as seamless as possible. The key is to start small, learn, adapt and then expand.
3. Time Constraints: As a busy practitioner, you are likely preoccupied by day-to-day work and client demands. This leaves you little time to explore new business models or to keep abreast of industry trends. I’ve found five good ways for busy practitioners to make best use of their time when it comes to technology adoption:
- Automate routine tasks such as data entry, report generation and basic calculations. This can free up valuable time for you to focus on more complex and strategic tasks.
- Make staying updated a team sport. Assign someone on your team who is fascinated by technology to keep abreast of industry trends, regulatory changes and emerging technologies. This can help you stay informed without having to spend much time researching yourself. Look for success stories in the research process, providing summaries of relevant articles, reports and studies. Ask your clients what they need!
- Provide resources for continuous learning and development. This can include online courses, webinars, articles and more. Doing so can help practitioners and their team enhance skills and knowledge at their own pace.
- Leverage your practice management system to assist in managing client relationships by providing reminders for important dates, organizing client information, and even drafting emails or other communications.
- Integrate project management. Manage projects more efficiently by prioritizing tasks, setting deadlines and tracking progress.
By leveraging these tactics and techniques, you can overcome the challenge of time constraints and focus more on delivering value to clients. Remember, the key is not to work harder but smarter!
Conclusion
It is crucial for accounting professionals and firms to invest in education, training and technology and to foster a culture of continuous learning and adaptation. By doing so, you can better understand the importance of adopting a holistic service model and be better equipped to implement it successfully.