Today’s accounting firms are expected to do more than just offer tax services. They are expected to anticipate and meet the needs of shifting demographics and fluctuating preferences from their clients. Accountants must now act as guides that lead clients through their financial experiences, even if that guidance sometimes only involves pointing the client in the direction of another expert. But if accounting firms are going to continue to lead their clients through their journeys, these firms must be aware of what their clients want.
Charles Crabtree, director of strategic accounts for Bill.com, said the “millennial generation currently includes more than 75 million members, with its oldest members holding decision-making positions within organizations. With the considerable impact of millennials in the business world, accounting firms that can meet and exceed their expectations will have a considerable competitive edge.” Here are several things that modern accountants should know about their modern clients.
A prolific survey performed by Bill.com found that all age groups of business owners, especially those under the age of 55, prefer their accounting to be done with as little paper as possible. In fact, a staggering 78 percent of millennial business owners prefer paper-free accounting, and even 45 percent of those 56 and older prefer paperless.
Paperless accounting is about far more than reducing the stack of papers on a client’s desk, even if that surely is a benefit. Paperless accounting allows clients to easily access important financial information at any time, which streamlines their business and simplifies filing and storage.
With accounting clients becoming more dependent on technology at younger and younger ages, accounting firms must do their best to keep pace with these technologically savvy clients. The Bill.com survey also found that younger business owners are more likely to use accounting firms that “utilize and offer modern technology,” including cloud-based technology, online invoicing, and digital payments. Twenty-five percent of young business owners also found mobile access important for their accounting efforts.
In fact, one in four of these millennial owners said it was “critically important” for their accounting firm to use mobile and cloud technologies. Because these owners do much of their work over digital devices, they tend to look for accounting services they can access easily on a tablet or smartphone. And because modern clients so often use electronic communication methods, they also want accountants who are adept at using such methods and who respond in a timely manner.
These technological tendencies might impact how accounting firms seek out new clients. According to the survey, 23 percent of millennial business owners under 30 use internet searches to find accounting firms. While that might not initially feel like a substantial number worth adjusting company practices for, that percentage is higher than it has been in the past, and it is expected to continue rising. To continue attracting up-and-coming business owners, accounting firms might want to consider investing more in online marketing and updating their websites.
Sixty-four percent of business owners still find firms through referrals from peers, friends, or family leads, but that number has dropped from previous generations.
Value in Services
Today’s clients are not just looking for accounting services from accounting firms. As Sage mentions, accountants are more than simply money-handlers; they are also the “advisor, tutor, and mentor” of their clients. Sage also makes the argument that because small business owners do not have the time to go to many sources and hunt for business advice, they might ask their accountants for help in non-accounting-related areas such as law and marketing. While accountants should not be expected to be complete experts on all their clients’ concerns, they can at least point their clients to more experienced sources who can provide them with the help they need.
Clients also expect more out of their firms in terms of services. According to Bill.com, millennial business owners still select taxes as the “No. 1 service they use from accounting firms,” but the same owners expect more diversity in services than previous generations did. Included in the preferred services are bookkeeping, accounting technology recommendations and training, invoicing, and bill payment.
The same Bill.com survey illustrates that millennial business owners “cite their top accounting frustrations as forecasting, managing cash flow, and reporting.” As a result of these frustrations, 51 percent of owners want strategic insight and guidance that go beyond basic reports, and 42 percent want “complex financial concepts translated into terminology and reporting they can understand.”
The Bill.com survey also makes the interesting observation that millennial business owners prefer a flat monthly rate or fixed value-based fee rather than bills that fluctuate based on an hourly rate. Mary Ellen Biery of Accounting Today says this isn’t surprising since millennial business owners “have grown up with Netflix, Spotify, and other subscription-based services,” which makes them more comfortable with a billing method that might be less common among accounting firms.
According to Xero, by switching to value-based billing, firms not only satisfy their clients’ preferences, they might also be able to build the firm. Xero points out that hourly billing does not always reflect the value of the work completed in those hours, which means the firm is not making the profit it deserves. Billing by the hour also limits revenue by time. Value-based pricing, on the other hand, allows clients to know ahead of time the fixed price they will be paying for the firm’s work.
Xero also adds that clients “who know how much they’ll be charged in advance are more likely to communicate better with you,” which improves collaboration, making the firm’s job easier and ensuring a satisfied client.
Understanding the evolving preferences of today’s accounting clients can help accountants maximize their services and become their client’s firm of choice. If you’re interested in helping accounting firms keep up with their clients, learn more about the New England College Master of Science in Accounting Online. This comprehensive online master’s of accounting program helps prepare students for a successful career in the accounting field and for further professional certification programs.