When we think of accounting’s Big 4 firms clientele, we usually picture blue chip corporates far removed from the Main Street.
But accounting industry trends have shifted. Having thoroughly colonised the large corporate market between them, large firms are now muscling in on the UK’s SME market.
It’s not hard to see why: viewed as a whole, small businesses accounted for 99.3% of all British private sector businesses. Altogether, SME turnover sits at an astronomical £1.4 trillion, according to the Federation of Small Businesses.
The Big 4 now offer SME accounting packages
So what’s a modestly sized accountancy firm to do? Simply put, it’s impossible, given the economies of scale at work, for a small practice to compete on price. Instead, the key is to compete on value.
Transition from low margin, process driven jobs to high-level advisory
The last thing accountants need to do when competing with heavily resourced, large competitors is to turn it into a pricing arm wrestle centred on compliance. Bigger competitors’ economies of scale would make this a one sided battle.
Producing accounts, doing tax returns, running payroll - these are important, no doubt. But they’re also:
- Low margin
- Easily automated
- Process driven
Bigger firms have the capacity to perform these tasks en masse and affordably. Cloud accounting software has simplified compliance work even further, turning it into a packageable commodity.
But technology doesn’t just erode your bottom line. It also provides a smaller practice the power to offer personal, advice led accounting powered by smart accounting platforms.
Your strategy to avoid a price war is three pronged:
- De-emphasise the importance of process driven jobs that can be done at scale
- Evolve your practice into a more advisory role
- Use technology and analytics to offer real advice
Up close and personal
A big accounting firm has a manpower advantage, that’s for sure. And, every year, they take on a new batch of fresh-faced recruits to bolster their ranks.
But far from being an advantage, when it comes to SME accounting, it can also be seen as a weakness.
Big firms client service drawbacks:
- Frequently rotate their accountants every few months
- Are far removed from a small business owner’s reality
- Don’t have the face-to-face accountability of a smaller practice
- Have very high workloads, damaging one-on-one service
For a small business owner, a personal, meaningful relationship is far more important.
How to beat the big firms on client service:
- Get to know your clients and understand their goals
- Place an enormous emphasis on building close, friendly relationships
- Use technology to quantify and map the journey to achieving those goals
- Use the business’s data to accentuate your personal service
Specialise your practice’s offering
The bigger firm’s offering will always need to be one-size fits all. They need to be everything, to everyone. For some industries, that won’t work.
Smaller practices can afford to intelligently craft their services. The accounting firm Ward Williams, for instance, has zoned in solely on the creative sector. But your specialisms can be broader (and less glamorous).
If you choose to specialise in a sector, there are some questions you should consider:
- Are you credible in your chosen sector?
- Do you have a passion for the sector?
- Are you able to add value?
- And, perhaps most importantly, are there enough companies to make a profit in your sector, and do they have enough money?
Technology has a vital role to play here. Offering specialist guidance to a particular sector means offering hyper-relevant information.
Tech can help you tailor and illustrate the information you provide to a specific client in real time. It’s is a powerful way to differentiate yourself from big firms’ mass market appeal.
You can also take a leaf out of the big player books and try to poach new (and bigger) clients yourself using these tactics. You can even broaden your horizons with potential clients located further and further away from your practice.
With more and more meetings going online, geography is less of a physicality issue and more of a personal relationship one. Get your client service processes right by making sure you add value to your online engagement and there’s no reason why you can’t win more business.
With that in mind, you’re in luck, as we’ve just written a practical guide on exactly how accountants should approach online meetings, where we point out actionable tips on how to maximise added value and personalise client engagement. Get your free Guide here: http://info.getsilverfin.com/ebook-the-connected-accounting-series-1.