4 practice management trends you should consider
Is your firm operating at peak efficiency? You have the opportunity to leverage insights around certain practice management approaches that could help you become more effective and profitable. Recently, the American Institute of CPAs’ Private Companies Practice Section (PCPS), in collaboration with CPA.com, invited firms of all sizes across the country to participate in the National Management of an Accounting Practice (MAP) Survey. More than 1,900 firms responded to the survey, and the findings revealed some important practice management trends you should be aware of. Consider the following:
- Engaging clients outside the hourly billing box
More and more firms are strengthening client relationships by shifting the conversation from time spent on services to the value of those services. Value pricing/value billing and fixed pricing allow the opportunity for you to potentially expand service offerings and become an even greater trusted adviser to your clients. These billing models might help minimize stress on your staff members while also promoting a healthy work/life balance.
According to the MAP Survey’s results on value pricing/value billing and fixed pricing:
- There were big increases in the number of firms of all sizes using these models, with smaller firms leading the way.
- Firms with less than $200,000 in revenues increased their use of these billing models by 10%.
- Firms with $200,000 to $750,000 in revenues more than doubled their use of value pricing and value billing from the 2016 survey.
- Most firms had increased their use of fixed pricing.
- Your cyber risk potential — regardless of your firm’s size
Some smaller organizations believe the risk doesn’t apply to them, when in reality, 61% of data breaches happen at small businesses. That’s an important message for your small business clients. You can help your clients be prepared to handle a cyberattack and assess your cyber risk with these resources. And if your firm is a member of PCPS, check out this toolkit, which explores cybersecurity client opportunities.
Accounting firms are not immune from cyber risks, and the MAP Survey found a growing number of firms are insuring against cyber liability risk:
- Among firms with under $200,000 in revenues, 60% now have insurance, compared with 41% just two years ago.
- In firms with $200,000 to $500,000 in revenues, 67% were insured, up from 53% in 2016.
- For firms with $500,000 to $750,000 in revenues, the percentage went up to 70% from just 47% in 2016.
- Investing in time-saving technology
CPAs who aren’t regularly upgrading and enhancing their technology assets should give it serious consideration as the benefits for productivity and profitability are immeasurable. Firms are investing more and more in technology. And to remain competitive, you’ve got to keep up with this pace.
- Diversifying services to keep up with your competition
Traditional services may be a firm’s bread and butter, but many firms also are making solid inroads into client advisory services. More than half of firms in almost every size category are providing some form of these services. If you don’t already have a foot in the water, now’s the time to dive in and distinguish your services from your competition.
The good news: Firms continue to enjoy solid growth
According to the MAP Survey, most firms have increased net client fees — up 4.2% across all firms since the last survey results in 2016. Given the continuing demand for CPA services, there’s even more incentive to make sure your practice is working at peak efficiency and you’re maximizing opportunities. Benchmarks are an important way to assess your firm’s inner workings, set priorities and establish goals. Make sure you’re considering these practice management trends from the MAP Survey, and you’ll be on the road to optimal success. (AICPA)