5 Common Pitfalls Accounting Firms Make and How to Avoid Them
Every accounting firm wants to widen their client base, spend more time with each client in an advisory capacity and bring down overall operational costs. Only by achieving these goals can a firm move ahead and build a profitable practice. But, many firms make avoidable mistakes which could be hampering their growth. They might be using outdated technology that affects productivity, aren’t marketing their accounting services effectively or are unable to reach the right target audience. Are you ready to help your accounting firm reach its full potential? Then here are the five most common mistakes to avoid.
Poor marketing strategy
It is quintessential for every firm to have a solid marketing plan. Marketing is the basis of attracting clients for your firm. You must have a clear understanding of the market and the feasibility of your business in the market. Good marketing can attract many clients towards your company; the penultimate goal for any accounting firm. Many companies don’t make a sufficient investment in marketing, which affects their scope to achieve a high-profit margin. For accounting firms, a low-investment high-returns strategy to market your services is through peer recommendations or word-of-mouth marketing. One way to do this would be to give the lowest bid in public job offers. This will help to place your company on the radar of potential clients. This is a method of marketing that has proven to be successful and eventually, through word-of-mouth, your company will get the kind of advertisement it requires to reach the right ears.
Not knowing the target market
When you are charting out a marketing strategy, your focus should be only on the most relevant audience segment. Determining your client demographic will help you refine your marketing plan and benefit your firm in a multitude of ways. If you don’t draw a clear plan that is based on the research you have done on the market, you run the risk of targeting the wrong clients. Many accounting firms like to showcase all their specialities and services to attract a plethora of clients. But being an expert in one field will definitely be better than being the jack of all trades. The ones who seek an accounting firm’s help these days prefer specialists to generalists. So, picking a market segment and channelling a major chunk of your focus towards that division will not only be profitable, but will also help build a good client base. Once you’ve got the results expected in one sector your firm can spread its wings to other sectors as well.
Staying away from the digital world
When you are trying to establish your presence in today’s market, it is impossible to ignore the digital world. Relying just on conventional media to promote your firm’s image will not take its reputation to great heights. Having an online presence is important for your business irrespective of the sector you are in. The first step to building an online presence would be to create a good-quality website for your company. A chat support and a ‘call to action’ button on the website will aid your firm in building a good relationship with clients – both existing and potential. You must provide unique and relevant information about your firm that will help project a good image of it. Needless to say, having a strong presence on social media will provide your firm with good exposure. If you are clueless about where to start, you can outsource this to digital marketing companies that will help your firm build a stronger image.
Having an inefficient recruitment process
In today’s scenario, the recruitment process is as important as running the business. Hiring the wrong kind of employees can easily hinder the growth of your firm. Being strategic about recruitment will not only help your company hire the best talent but can also aid in cost-cutting. If your recruitment process is limited to just interviews by the Human Resource team, you might not be zeroing in on the right candidate. Although HR are the experts when it comes to finding candidates, their field-based knowledge might not be good enough to make the final selection. When candidates are not asked the right questions during an interview session, the firm runs the risk of hiring candidates who do not fit the brief. Interviews by expert accountants can improve your chances of selecting a candidate that is best suited for your company.
Lack of investment in technology
Accountants no longer have to sit in front of desks with piles of papers and manually enter every value. If you still have your employees manually entering values in an accounting software, your firm might be losing valuable time that can be used for higher-value work. After the advent of technology, the process of accounting has been transformed greatly. Smart business tools will help your company push its boundaries and explore new trends in the field. A major advantage is that there is very little room for error. One of the biggest technological developments in the field of accounting has been cloud software. Migrating to the cloud automatically keeps all your firm’s data secure, prevents breaches and enables work from remote location. In the age of the gig economy, moving to the cloud can help you take advantage of independent contractors. It is also an important precursor to outsourcing basic accounting tasks, another valuable way to grow your firm’s profits. Good tools also lift a considerable load off your employees thus leaving you with a happy team thus creating a productive and productive and positive work culture. With the extra time freed up, you can increase face-time with your clients. In this way, technology only helps in strengthening the relationship with clients.
Avoiding these pitfalls will help your company stand the test of time. With the world of accounting changing constantly, evolving with it will help your firm beat the competition.
To learn more about Sundaram Business Services and how we can support your organisation, visit sundarambizserv.com.