A Deep Dive into the Strategic Goals of Today’s Accounting Firms
In 2020, only 47% of firms reported revenue growth – down nine points from 56% in 2019. Is it any surprise that in a 2021 survey performed by Accounting Today for Wolters Kluwer (the survey), 96% of firms are taking steps to grow their business in the next 3-5 years?
But how are they planning to grow? Only 52% of firms cited adding or updating technology as part of the plan to grow their business. Where are firms looking to gain additional capacity? The Great Resignation aside, the accounting industry has struggled with hiring, training, and retaining qualified staff for years, only exacerbated by a shortage of new CPAs in the pipeline.If more than half of CPA firms aren’t planning to use technology to support firm growth, and we already know there’s a staffing issue, what are firms saying about how they want to grow? And how can they achieve that growth?
Most Firms Have Multiple Growth Paths
The average firm surveyed selected at least three different growth paths. There are breakpoints in growth tactics, with a couple of rather significant outliers.
All firm sizes are focusing on recruiting new business clients, obtaining referrals, and updating their technology.
Large firms (50+ employees) seem to be spread across the spectrum, with approximately 50% of firms selecting every growth tactic except partnering with outside vendors or specialists. Not surprising, since 67% of large firms are working to increase the number of services used by clients.
Mid-sized firms (20-49 employees) are particularly focused on the top three mentioned above (new business clients, referrals, updating technology), along with marketing their services more. As with large firms, a key tactic for 67% of mid-sized firms is increasing the number of services used by their existing client base
Small firms (5-19 employees) are very tightly focused on the top three (new business clients, referrals, updating technology). Unlike mid-sized and large firms, there isn’t much deviation from the top three, dropping from 48% of small firms adding or updating technology as a growth tactic to 35% planning to market their services more. This intense focus on three main growth strategies by small firms could mean missed opportunities for smaller firms to create a competitive advantage and scale more successfully than their peers.
The tactics that firms are using to grow - and what firms can do to increase their success - is the focus of this white paper.
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