20% of Accounting Services providers have average to severe risk of financial failureCreative Curiosity
20% of Accounting Services providers have average to severe risk of financial failure
As an offshoot to the SV Partners Commercial Risk Outlook Report March 2017, SmartFee completed a specific analysis on the Accounting Services sector.
Adrian Jenkinson, Managing Director of SmartFee said “The good news is 80% of Accounting Services providers are performing well however we are now seeing the reality of what has been a much talked about issue for the accounting industry. The combined impact of commoditisation, automation, regulatory changes, and unfortunately some less than best practice business management, have put many accounting firms at the tipping point of do or die.”
Now more than ever, firms that want to survive and grow need to look at their approach and determine their positioning and relevance in the broader market of trusted advisors. This is also true for the higher performing firms.
It’s not just a case of adding the much talked about advisory services – in fact the opportunity for many firms has already passed and the risk of doing nothing in the next 12 months may see them move to an irrecoverable position as the firms that have already implemented advisory solutions and integrated financial planning pull away.
Advisory services should not be seen as the panacea either. The reality is that automation will continue and powerful use of big data from the likes of MYOB, Xero, and Intuit will see much of the performance advisory component delivered straight to the business owner through their accounting solution. Mr Jenkinson believes it’s only a matter of time before facebook, Amazon, Google and Microsoft become the “go to” providers of business advisory solutions.
The key for accountants now is to understand their share of wallet and plan the implementation of solutions with their clients that embed themselves as the trusted business partner.
For firms in the average to moderate risk category, there’s a window which is closing rapidly so the time for action is now. To close the gap, many firms they may need to consider a collaborative partnership or hiring new skills into the firm.
To view the Australian Accounting Industry Commercial Risk Snapshot follow the link