Looking for new ways to build value in your accounting practice is a key focus as technology continues to replace manual processes of the past. Accountants have already seen how automation is changing the way they work. Basic compliance and data entry tasks have been automated and streamlined by cloud software and mobile apps. Bank feeds are automatically imported and reconciled; tax forms are mostly filled by lodgement ‘engines’ and ‘data mining,’ without human touch.
But accountants should welcome the chance to move into higher-value services, states Terry Bell, Partner in practice management group, Business Health.
“With a lot of the tax return work commoditised, off-shored or automated internally, accounting practices are definitely faced with the need to build value,” says Bell. And some are already looking at ways to change their business models to facilitate this growth.
Depending on their licence authorisations and/or conditions, some accountancy practices are expanding their offering, particularly for self-managed superannuation funds (SMSFs). Others are considering how to diversify – and into what services – but whatever they’re doing, the need to build value is “absolutely critical”.
“On our numbers, the average advice business attracts a valuation of somewhere to the order of 2.5 times recurring revenue, whereas an accounting practice alone, without planning beside it, attracts less than one times. That’s an historical factor, and it’s partly based on a lot of the big players. That may be changing, but it presents a big dilemma for accountants,” Bell says.
The key to building value, he outlines, can often be found in the accounting practice’s existing clients. “A lot of the value they need to build in their business is in their current client base – all they need to do is tap into it.”
The problem is twofold, he says. First, not enough accounting practices are able to articulate the value of the services they deliver. Second, many have not recognised the scope of opportunities in their existing client base, as many of their clients are investing in new areas.
“The average accounting practice has about 700–1,000 clients, individuals or small businesses,” says Bell. “They know you already, they trust you – so that’s your starting point. But how well do you know them? What are their primary drivers: are they looking to sell their business and retire, or to buy another business? If it’s the former, things like investment and income streams become every important, as do aged care, estate planning and succession planning.”
Accountants should be able to deliver those services, either directly in-house or through a network, says Bell. “Clients will certainly pay for advice in these areas, because they’re worried about them. The upside to all of this is that clients trust their accountant; they want their accountant to do a good job for them; and they will tell their accountant what extra services they want.
There is just one small step, Bell adds. “But the accountant has to ask.”
Whether you’re collaborating with advisers or managing your clients’ wealth end to end, BT has an SMSF solution that can be tailored to suit your business and your clients. Call 1800 812 131 or visit btpanorama.com.au/accountants to find out more.
Information current as at 21 August 2017. This information does not take into account your personal objectives, financial situation or needs and so you should consider its appropriateness, having regard to your personal objectives, financial situation and needs having regard to these factors before acting on it. This information provides an overview or summary only and it should not be considered a comprehensive statement on any matter or relied upon as such.
BT Portfolio Services Ltd ABN 73 095 055 208 AFSL 233715 (BTPS) is the operator of BT Panorama, BT Funds Management Limited ABN 63 002 916 458 AFSL 233724 (BTFM) is the issuer of BT Cash, and Westpac Financial Services Ltd ABN 20 000 241 127 AFSL 233716 (WFSL) is the issuer of BT Managed Portfolios (together, the Panorama Products). An Investor Guide is available for BT Panorama and a PDS is available for BT Cash and BT Managed Portfolios and can be obtained by calling 1300 784 207 or visiting www.btpanorama.com.au You should obtain and consider the relevant disclosure documents before deciding whether to acquire, continue to hold or dispose of interests in the Panorama Products. In addition, BTPS is also the provider of the SMSF Establishment Service and the SMSF Administration Service. A Guide and Terms and Conditions is available for each of these services by contacting BTPS.
BTPS, BTFM and WFSL are subsidiaries of Westpac Banking Corporation ABN 33 007 457 141 (Westpac). Apart from any interest investors may have in Westpac term deposits or Westpac securities acquired through the Panorama Products, an investment in, or acquired using the Panorama Products is not an investment in, deposit with or any other liability of Westpac or any other company in the Westpac Group. These investments are subject to investment risk, including possible delays in repayment of withdrawal proceeds and loss of income and principal invested. Westpac and its related entities do not stand behind or otherwise guarantee the capital value or investment performance of any investments in, or acquired through, the Panorama Products.
This Information may contain material provided directly by third parties and is given in good faith and has been derived from sources believed to be accurate at its issue date. It should not be considered a comprehensive statement on any matter nor relied upon as such. While such material is published with necessary permission, no company in the Westpac Group accepts responsibility for the accuracy or completeness of, or endorses any such material. Except where contrary to law, we intend by this notice to exclude liability for this material.
© BT Financial Group
BT Panorama can help you build capacity in your Accounting firm and provide more value to your SMSF clients. To find out more visit btpanorama.com.au/accountants