Please ensure Javascript is enabled for purposes of website accessibility

Future-Proofing your CPA Firm: 4 Tips for Anticipating Trends and Preparing for Change

Looking back at the past few years, it is bewildering to consider the concept of “future-proofing” a CPA firm. Yet, the unexpected impact of the pandemic has disrupted the field of CPA for years to come, making it challenging to predict what lies ahead. However, there are ways to anticipate the future and develop strategies that mitigate external influences on your firm.

It has become imperative for CPAs to develop anticipation skills, which help drive innovation, prioritize decision-making and enable effective problem-solving for accounting tasks. 

To thrive in the complex business landscape, focus on formulating analytical strategies to capitalize on available resources.

READ: GUEST COLUMN — President of Bank of America and DDP on the Power of Economic Diversification

The emergence of new ways of accounting

According to a report by Deloitte’s Q4 2021 Global CFO Survey, companies are expected to invest more in digital technology and assets to achieve their desired goals compared with the pre-pandemic trend.

That being said, companies that adapted more quickly had an easier time streamlining processes, predicting the future of accountancy, anticipating what their clients may need or expect, and preparing for those trends ahead of time.

Insider Intelligence predicts that the Neobanking sector, which consists of licensed banks conducting operations exclusively online, will experience significant growth, doubling in size by 2026 and causing a transformative impact on the banking industry.

Positive Impact 

  • Real-time collaboration with clients
  • Integrated technology enabling bank feeds and open banking
  • Implement the right strategies for future changes
  • Streamline and enhance practice effectiveness
  • Consolidate real-time data to improve decision-making

Negative Impact

  • Input data into multiple systems and limited data-driven insights
  • Increased cybersecurity risks and data breaches
  • Disruption and resistance from employees due to changes in workflows
  • High upfront costs of new technology implementation and maintenance
  • Reliance on technology can pose challenges during system failures or downtime
  • Potential loss of personal touch with clients due to increased reliance on digital tools

READ: Protect Your Online Business — Minimizing Cybersecurity Risks in a Remote Environment

4 effective ways to future-proof your CPA firm

1. Stay ahead of evolving trends

Trends keep evolving so should CPAs. As a CPA, attending industry conferences or events will help you discover new technologies dominating the market. Here are prominently leveraged technologies:

Artificial Intelligence: AI significantly impacted the accounting sector by automating numerous tasks and increasing efficiency. One prominent tool is ChatGPT, a platform that works per human instruction. 

Blockchain: This technology has taken the fintech world to great heights. Over 50% of payment infrastructure firms have already embraced this game-changing technology in their operations. And the impact? Brace yourself for a projected global GDP growth of nearly $2 billion by 2030. 

Cloud-based Accounting Software:  The flexibility to work from anywhere, anytime, has made cloud computing popular. With its ability to customize unique CPA firm processes and provide data at your fingertips, you can’t avoid using cloud-based software.

Data Analytics: Using data analytics is not new in accounting, but it has become more prevalent today. CPAs process massive amounts of data from multiple sources to operate and so using smart tools to manage, mine, and analyze is crucial. So, invest in tools like Excel, PowerBI, and AI.

READ: AI in Employment — A Troubling Issue in the Hiring Process

2. Analyze your competitors

As a CPA firm, keeping tabs on what other firms are doing is imperative. A close eye on your competitors can help you understand the industry benchmarks and network with professionals. 

Emerald Publishing’s research reveals that approximately 90% of Fortune 500 companies use a competitive intelligence strategy in their operations. It will help you can gain insights into the following aspects:

  • Unique strengths, weaknesses, and key differentiators.
  • Current position in the market
  • Competitive landscape and opportunities
  • Pricing model against industry benchmarks
  • Competitors’ client base and preferences

3. Outsourcing Solutions

Outsourcing solutions can significantly benefit CPA firms by providing cost-effective resources, freeing up internal staff, streamlining processes and enhancing scalability.

CPA accounting services can enable you to focus on core competencies, improve efficiency, meet client demands effectively and reduce overhead costs.

You also get flexibility, access to advanced technology, and the ability to handle peak workloads without hiring additional full-time staff. CPA firms can optimize operations, drive growth and stay competitive in the evolving accounting industry.

4. Identify and smartly manage risks

Prepare for the unexpected and safeguard your business’s future by taking proactive measures. Start by identifying potential risks of failure in areas such as people, systems, legal compliance, and data security. 

If you rely too heavily on a single person, or a vendor, it can lead to significant problems when they are unavailable. Moreover, address any gaps in your business processes and overlook the critical aspect of data security; losing data can put your business at risk. 

 

Stacey Howard headshotStacey Howard is an accomplished blogger with over a decade of experience in the field of accounting and bookkeeping. With her extensive knowledge and expertise, she has been working as an accountant at a leading outsourced accounting firm, Cogneesol. Throughout her career, she has developed a passion for sharing valuable insights and information on various accounting industries through her engaging and informative write-ups. Her contributions to the accounting community have been widely recognized, making her a sought-after expert in the field.

Starting an Accounting Firm in Colorado: A Guide to Certifications, Business Structures and Marketing Strategies

Starting a business can be an intimidating proposition. However, if you’re committed to bringing your vision to life, you’re more than capable of pulling it off. If you’re ready to take the first step in starting an accounting firm in Colorado, having some guidance can make the process easier. 

READ: What Are the Safest Industries to Start Your First Business in 2023?

Make sure you meet all of the requirements to start an accounting firm in Colorado

When starting an accounting firm, there are many requirements that you’ll have to meet. Most importantly, there are certain certifications that you and your team may need to operate your business. A failure to get these certifications could result in accounting scandals that ruin your business entirely. 

One of the most popular certifications for accountants is the certified public accountant (CPA) certification. While you’re not required to have one when opening an accounting firm, not having this certification will limit the types of services that you’re legally allowed to offer. 

After meeting federal requirements for the types of services you wish to offer, it’s time to explore Colorado laws. For more information on Colorado-specific requirements and resources, visit the Colorado Department of Regulatory Agencies website and check out the Colorado Secretary of State’s checklist for businesses.

Decide how you want to start your business

Diving into a new business can be scary. In fact, many people forego their entrepreneurial dreams for the simple fact that this leap of faith can be so intimidating. However, while it may be better for some to go full-time with their accounting firm immediately, other options can make the transition less jarring. Some options for starting include:

Starting part-time

This allows you to make a softer transition into being a business owner. While offering services on a part-time basis, you have the opportunity to continue working another job until your business picks up enough to make the full-time transition. 

Buy a business

For many people, the act of creating a business and finding a clientele can be daunting. To avoid this, buying an accounting practice can be a great way to take advantage of an infrastructure that’s already been created. However, this option can sometimes be an expensive undertaking. 

Build from the ground up

While some prefer a slower transition, others thrive when throwing themselves fully into a situation. For those who identify with the latter, starting an accounting firm from the ground up can be a great option. 

While all of these options are viable, only you can decide which one works the best for your life. This being the case, it’s important to research all of your options and figure out which resonates with you the most before taking the leap and starting your business.

READ: From Employee to Entrepreneur — Top Tips for Making a Successful Switch  

Choose your specialization and write a business plan

It’s important to choose a specialization when starting an accounting firm. While you can always expand the services that you offer over time, it’ll be difficult to offer them all while you’re starting out. Some specializations you may choose include:

  • Auditing
  • Tax accounting
  • Fiduciary accounting 
  • Financial accounting

The specialization that you choose for your business will likely reflect your previous work as an accountant and your individual specialty. 

After choosing your specialization, it’s time to start crafting a business plan. This process will involve choosing what type of business structure to utilize, such as an LLC or a Corporation, what your goals are for your organization and an estimate of how much starting up your business will cost. 

In addition, this is where you’ll begin to make decisions about where you’ll operate your business and who you will hire for which positions. 

Market your business and attract clients

Once you’ve completed the groundwork and are ready to start succeeding with your business, it’s time to start marketing and attracting clients. This can include reaching out to your social network, taking ads out in local newspapers or cold calling various individuals or businesses. 

READ: How Brands Can Grow Customer Loyalty and Build a Positive Reputation in 2023

Ultimately, your strategy to gain new customers will depend on your unique business. As such, it’s important to try different practices and strategies and adjust your marketing practices depending on what works and what doesn’t. 

You’re capable of starting an accounting firm in Colorado

While it can be scary to commit to an entrepreneurial venture, the rewards that come from opening your own business are unparalleled. By making sure you’re thorough in every step of this guide, you’ll dramatically simplify the process of becoming an accounting firm owner and operator.

So if you get stuck thinking about failure, remember that you’re capable of pulling it off and bringing your vision to life if you’re willing to put in the time and effort.

 

Andrew Deen HeadshotAndrew Deen has been a consultant for startups in a number of industries from retail to medical devices and everything in between. He implements lean methodology and is currently writing a book about scaling up business.