Guest Article: Accountants Advisory Group

Guest Article: Accountants Advisory Group

Creating a Competitive Advantage Through Innovation

By Joseph A. Tarasco

Joe Tarasco

Joe Tarasco

Firms continue to experience significant compe­tition in traditional commodity-driven services; yet, few are attacking the marketplace with the new and innovative services necessary to survive. In fact, many accounting firms have been providing the same services to the same geographic areas for years— resulting in very little growth. As competition intensi­fies, traditional compliance services are quickly com­moditizing, causing firms to primarily compete on fees. This is taking its toll on profitability and, therefore, forcing firms to come up with new survival strategies such as joining forces with other firms (e.g., through an mergers and acquisitions [M&A]). Because traditional local practices are then forced to compete with much larger firms, many need to rethink their service model and how they position themselves in the marketplace.

Service Offering Strategies

One way for a firm to stand out from the competi­tion is to develop solutions-oriented specialty services in growing niches and become noted experts in those niches. Another way for firms to stand out is to bundle existing services and market them under one label (i.e., family office practice, litigation support, or personal financial business management), or promote bundled solutions to clients rather than present clients with a long list of individual services.

Here are some examples of new and innovative ser­vices that firms can provide to their clients:

  • LGBT services. These services are for same-sex mar­riage couples in the areas of tax compliance or fi­nancial estate planning, customized to deal with complex state-by-state laws. Currently, 25 states al­low same-sex couples to file a joint state income tax return and this number is growing. These services are excellent examples of bundling new services with a firm’s existing technical expertise and addressing the needs of a new and growing marketplace.
  • Divorce advisory services. These services include having a certified divorce financial analyst on staff to assist in pre-divorce planning, needs analysis, and goal-setting planning and implementation. According to Jennifer Baker, Psy. D., of the For­est Institute of Professional Psychology, 50% of first marriages, 67% of second mar­riages, and 74% of third marriages end in di­vorce. Divorce attorneys can be a significant refer­ral source for these clients.
  • Risk advisory services. These services provide infor­mation technology assurance and compliance ser­vices in areas, including Statement on Standards for Attestation Engagements (SSAE) No. 16, Re­porting on Controls and a Service Organization, Service Organization Control (SOC) audits, and HIPPA/HITECH compliance.
  • Medical marijuana business owner services. These ser­vices address a newly created marketplace with new issues and problems (e.g., best practices for proper compliance in areas of taxation and financial regu­lations for city, county, state, and federal govern­ment). They include consulting on entity selection issues depending on state law and interpretation and IRS Code Section 280E (i.e., expenditures in connection with the sale of federal illegal drugs).
  • Economic claims and disaster recovery services. These services target individuals and businesses, includ­ing monitoring and oversight services to govern­mental entities and agencies that are required to show accountability for relief or compensation funds provided by the federal government or the private sector.
  • Outsourced corporate development services. These ser­vices range from researching and identifying M&A transactions for clients to closing the acquisition.
  • Comprehensive workforce management services. These services include employee assessments, hu­man resources management, benefits, and insur­ance.

Suggestions for Gathering Innovative Ideas

Where does innovation come from? Innovation starts with ideas from partners, staff, clients, or referral sourc­es (e.g., attorneys, bankers, or insurance professionals). Taking these ideas from planning to implementation requires several steps, including: research; design; mar­keting; and delivering the final product.

Suggested ways for gathering new and innovative ser­vice ideas include the following:

  • Review competitors’ brochures describing their ser­vices and specializations;
  • Discuss with bankers and attorneys which special services they believe are needed by businesses in your area;
  • Review business newsletters, trade periodicals, and chambers of commerce publications for business growth trends and industry problems;
  • Solicit ideas from clients and non-clients through surveys or focused meetings;
  • Engage an outside marketing consultant to per­form a market research study; and
  • Request that partners and staff provide suggestions and perform research.

When firms offer new services to clients, they in­crease their exposure to a broader base of prospective clients and referrals, which can expand their network, thus leading to additional growth in traditional service areas. One way for a firm to expand its services is to merge with or acquire a company to combine/replace products to answer the needs in the marketplace.

There is a fundamental shift in the playing field as marketplace needs and demands change and consolida­tion reshapes the landscape. It is time to play the game to win. Develop a contemporary marketing strategy that targets segments in the marketplace that are un­derserved, but require value-added services.

While the mainstream accounting firms may be slow to adapt, there are firms around the country aggressively carving out opportunities for new kinds of engagements that the marketplace is ready to em­brace. In focusing on nontraditional examples, this article does not set out to diminish the need and im­portance of traditional services, but rather to add to firm’s service offerings and to complement and en­hance existing services.

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