Accounting and Financial Services Firms’ Reviewed by Momizat on . Top 5 Business Challenges The author discusses the top five business challenges identified by professional accounting and financial services firms, and proposes Top 5 Business Challenges The author discusses the top five business challenges identified by professional accounting and financial services firms, and proposes Rating: 0
You Are Here: Home » Practice Management » Accounting and Financial Services Firms’

Accounting and Financial Services Firms’

Top 5 Business Challenges

The author discusses the top five business challenges identified by professional accounting and financial services firms, and proposes ways professionals can readily address those issues.

To better understand the business challenges confronting professional services firms, Hinge Research Institute conducts an annual High Growth Study, which NACVA members are likely familiar with.  Our most recent study surveyed over 1000 professional services firms of various industries and sizes.  Respondents included 269 accounting and financial services firms who, combined, employ over 645,000 professionals.

Two areas of special interest in this year’s study were how participants viewed their firms’ challenges over the next few years, and how those concerns have changed since the preceding year.  Below, I will summarize our findings.

The Top 5 Business Challenges

  1. Running Low on Top Talent

Last year, firms’ most pressing need was for new business; this year, it is finding the best talent.  To put this in perspective, last year, finding talent was number two on the list.

To investigate this trend, we recently conducted a separate study on the impact of employer brand for firms.  An employer brand is basically your firm’s reputation and visibility as a place to work.  While there are no one-size-fits-all solutions, the study did spotlight many specific strategies firms are using to improve their employer brands.

  1. Downward Pressure on Pricing

Downward price pressure is this year’s second-most frequently cited challenge.  Top management tends to see multiple factors as driving this concern, with commoditization of services (see item three below) leading the way.  Also playing important roles are increased competition and automation.

To combat price pressure, one of the most successful strategies is to make your firm’s expertise more visible in the marketplace.There may already be such experts, whom we call Visible Experts®, in your firm.  These professionals boost how both clients and employees view your overall brand.  More to the point, the greater the visibility of their expertise, the higher the billing rates they tend to command.  Our research shows that cultivating Visible Experts in your firm requires a program of consistent, replicable techniques.

  1. Service Commoditization

Commoditization happens when potential clients see a firm’s services as interchangeable with those of competitors.  This predicament is especially painful to partners who have spent large parts of their professional careers trying to help their firms stand apart.

The antidote is differentiation—changing how prospects perceive you in ways that are meaningful and valuable to them.  Many accounting and financial services firms wrestle constantly with differentiation, and more than a few are unsure how to evaluate their current differentiators or establish new ones.  Fortunately there is a proven process for doing so.

  1. The Rise of Artificial Intelligence (AI) and Automation

Last year, technology was the fourth-most-frequently cited business challenge.  This year, the issue has evolved so that it is not only about keeping up with technology, but also about avoiding being replaced by technology.  To name just one example, could a cheaper AI-powered solution for routine compliance be far off?

Fortunately, this is a case of a business challenge that is also an opportunity.  For example, firms that leverage marketing automation have a distinct advantage.  We are also seeing a growing trend toward technology and professional services packaged together as new “products.”

  1. Threats from New or Larger Competitors

Communication technology is allowing firms to market beyond their traditional geographic range.  There are also entirely new technology-driven business models emerging, as well as rising client expectations.  These are each drivers of increased competition, and problems like downward price pressure and commoditization of services seem to be the common result.

All clients expect stellar service, from professionals who have done it before—qualities that are now the price of admission for accounting and financial services firms.  What can your firm do to set itself apart from competitors offering similar solutions and service?  Work to identify the value your firm adds as part of its services—then, communicate that to potential clients, relying on best practices to heighten your differentiation and Visible Expertise.

Conclusion

As clients’ needs, buying behaviors, and expectations evolve, firms must adapt their marketing programs accordingly.  The firms that are best able to build a nimble, multi-purpose marketing machine will be the ones that not only survive, but grow.

Lee W. Frederiksen, PhD, is Managing Partner at Hinge, the leading branding and marketing firm for the professional services. Hinge conducts groundbreaking research into high-growth firms and offers a complete suite of services for firms that want to become more visible and grow.

Dr. Frederiksen can be contacted at (703) 391-8870 or by e-mail to LFrederiksen@hingemarketing.com.

The National Association of Certified Valuators and Analysts (NACVA) supports the users of business and intangible asset valuation services and financial forensic services, including damages determinations of all kinds and fraud detection and prevention, by training and certifying financial professionals in these disciplines.

Number of Entries : 1738

©2018 NACVA and the Consultants' Training Institute • (800) 677-2009 • 5217 South State Street, Suite 400 Salt Lake City, UT USA 84107

event themes - theme rewards

UA-49898941-1
lw