Grow Your Accounting Practice
infinityglobus
15 May 2024

Looking to grow your accounting practice, explore practical strategies and take your firm to the next level with our expert guide and growth hacks.

1. What are the Challenges in Growing Your Accounting Practice?

In the dynamic accounting industry, there are many challenges which must be navigated with strategic planning and innovative solutions to grow your accounting practice. Some of these challenges are mentioned below:

  • Competitive Market

When we talk about competition, it is a significant factor in the accounting industry. As per the latest data available from the American Institute of CPAs (AICPA), there are over 46000 CPA firms in the USA. This data indicates a very competitive market where firms get very little market share, and it is difficult to grow accounting practice.

  • Technology Integration

Despite the advantages of technology, it is very challenging to integrate new technologies into accounting practices as it is time consuming as well as requires large resources. According to a survey report by Sage, 67% of accounting firms believe they are struggling and lacking in technology adoption.

  • Regulatory Compliance

In the USA, regulatory compliance is a major challenge for accounting firms and non-compliance with these regulations can result in heavy penalties and fines. It is important for accounting firms to provide training on FASB accounting standards to align with GAAP principles. In 2023, the Securities and Exchange Commission issued total penalties around $4.9 billion.

  • Increased Automation and AI

If you solely rely on AI to complete all your tasks, even in areas where human judgment is required, it can create critical issues. While implementing automation and AI in your business, it is crucial to pay attention to ensure the ethical use of information as it uses algorithms to generate data. The majority of employees are reluctant to rely on AI.

2. The Current CPA Firms’ Landscape in USA

CPA firms in the USA are experiencing many challenges as well as many opportunities due to various factors such as new market forces, advancement in technology, regulatory amendments and so on.

Recently, in a report published by IBIS World, the accounting industry has grown at a CAGR of 1.0% in the last five years, with an estimated $146.2 billion in 2024. The report also mentioned that the industry is expected to grow even more in the next coming five years.

Based on the size of the firm and the services it offers, we can divide the CPA firms in the USA into several categories. Market segmentation is increasing day by day to cater for the diverse needs of each individual and eventually grow accounting practice.

The growth in recent years that has increased the demand for accounting services is the result of factors like corporate mergers, acquisitions, and the evolving needs of clients. According to the AICPA’s report, the employment rate of auditors and accountants in the USA is expected to rise by 7% by 2030.

The current CPA firms’ landscape in the USA is dynamic, competitive, and full of opportunities. With the evolving client expectations, it is crucial for firms to adapt to these changes and grow efficiently in the accounting market.

3. How to Define a Clear Growth Strategy for Your Accounting Firm?

Defining a clear growth strategy is crucial to grow accounting practice. Accounting firms must develop and implement plans to attract high-value customers and a large market share. Let’s explore some points for your growth strategy:

  • Know Your Target Market

The first step is to make decisions about your operations and decide with whom to work with, based on elements like the domain, company size, location, and specific problems. Market intelligence enables you to develop your services and campaigns in a way that is geared more towards them. This way, you can grow your accounting practice.

  • Network and Collaborate

After identifying your target market, create ties with different professionals, particularly lawyers, financial advisors, and business consultants. These professionals can be useful in recommending clients to your firm to grow your accounting practice. Networking through industrial associations, community events, and online forums can be used to raise your scope and skyrocket your reputation in the market.

  • Identify your USP

The third step to grow your accounting practice is cultivating a clear vision of how your organization can better appeal to your customers than your competitors. Clearly and precisely define how your company stands out and what its competitors’ benefits are for clients in the market niche.

  • Strategic Partnership/Merger

After building a strong brand image in the market, accounting firms looking for an opportunity to grow or expand their market share can consider effective partnerships or mergers/acquisitions. This helps in innovation, enhanced productivity, large resources, advanced technology and increased capabilities.

  • Building Skilled Team

Once you position yourself in the market the next step is to ensure perfect services to your clients, it is essential to build a skilled team of professionals who are well-versed in what they do. Your team must consist of individuals who are dedicated and committed to serving their skills effectively and efficiently.

  • Client Retention

The last step in the process is to always ensure timely and high-quality service to your clients to build strong relationships. You must pay attention to their specific needs and resolve any issue or difficulty they are facing with the utmost efficiency. This way you can retain a large client base and attract new ones through reference.

4. Tips to Grow Your Accounting Practice

How to grow your accounting practice? This is a very comprehensive aspect that needs strategic planning and implementation. You must follow certain tips to navigate the challenges smoothly you face and grow your accountancy practice to ensure sustainable growth. Unlock your success journey with these helpful tips:

  • Invest in Technology

Technology adoption to automate, simplify, and offer better service is a must. This shall comprise the essence of cloud-based accounting software, automation tools that can manage routine tasks and client portals can be a useful option for secure document sharing and communication.

  • Focus on client Relationship

To keep the existing clients and get new ones, building good client relationships is very important. Eventually, it helps to bring more people via the referral way. Ensure frequent communication, good insightful advice, and display that you know your stuff and your clients will trust you for life.

  • Optimize Your Online Presence

Have a professional outfit that highlights your services, expertise, and customer reviews right at your website. With regards to digital marketing, do not forget to invest in Search Engine Optimization (SEO) to enhance your online visibility in searches. This way you can grow your accounting practice.

  • Additional Services

Offering additional services that are related to your core accounting services can easily grow your accounting practice. This will add value to your clients, eventually leading to more client satisfaction. This way you can grow your accountancy practice.

  • Update Your Knowledge

In this dynamic world where accounting standards and regulations are continuously changing it is important to update yourself with the latest amendments and changes to provide your clients with the most effective strategic solutions to their problems.

5. Can Outsourcing Help you Grow Your Accounting Practice?

Outsourcing for performing non-core activities has become a widespread business strategy that aims to help companies improve performance through cost reduction. Approximately 70% of firms stated it to be the main reason for outsourcing according to a survey- “Deloitte Global Outsourcing Survey 2020”. Outsourcing can offer several benefits to grow your accounting practice. About 60% of CPA companies outsource at least some of their accounting work, according to a survey done by the American Institute of CPAs (AICPA). According to the Global Industry Analysts, Inc. prediction, the global market for accounting and finance outsourcing will reach $43.4 billion by 2027.

  • Optimize Cash Flow

You can manage your cash flow effectively by paying outsource providers according to the tasks that need to be carried out instead of having a full-time staff for performing trivial tasks of the firm.

  • Enhanced Scalability

Outsourcing can help firms to scale up their operations efficiently. When the firm is looking to expand or experiencing a high fluctuation in demand, they can outsource their tasks for effective management of business operations.

  • Effective Training

Organizations no longer need to hire, train and retain new employees to tackle a rise in loads with the help of outsourcing. Through outsourcing, you can increase your productivity by focusing on the main business activities.

  • Cost Saving

It can provide cost savings and flexibility by replacing the overhead fixed expenses with variable ones. You can allocate your savings to other aspects of your business and grow in this competitive industry.

  • Skilled Expertise

Outsourcing firms are engaging professionals with special knowledge and skills to ensure accuracy and quality service, which has enabled accounting firms to avoid large investments in training and infrastructure.

6. FAQs on How to Grow Your Accounting Firm

Q: In what ways does technology facilitate the growth of accounting firms?

A: Technology has many advantages contributing to the growth of accounting firms such as enhanced efficiency, automation of routine activities, cloud-based software solutions, data analytic tools, and many more.

Q: What are some of the most impactful marketing strategies for accounting firms?

A: To grow your accounting practice, marketing strategies that are effective and beneficial for the accounting firms are: content marketing, networking, search engine optimization, building distinct identity, strategic advertisements and building client relationships.

Q: How can accounting firms structure their pricing policies for growth opportunities?

A: You can adjust pricing to grow your accounting practice in various ways such as value-based fixed fees, package services, pricing based on business size, subscription-based pricing, etc.