As technology grows and evolves over time, consumers and industries need to keep pace. Firms catching on to these tech developments are said to be levelling between larger corporations and smaller firms. But to what extent can these smaller accountancy firms compete?
Cloud working lets smaller firms compete harder
The cloud has allowed smaller accountancy firms to occupy the space previously owned by the larger practices. Operating at greater scale, these small firms are succeeding in different verticals and outside of their traditional geographies.
There are two main reasons: instant access to real-time data, and lower cost of operation.
Rob Stone, National Partner Director at Xero said in our Predictions for 2018 webinar at the end of last year:
SME firms have more access to tools than ever to chase high-value clients. The tools we use to convert data into information, like Futrli, will become essential. We’re seeing clients unwilling to pay as much for just data conversion; they’re looking for more advice.
Real-time data – see results as they happen
The automation of previously manual tasks means daily tasks can be completed in a fraction of the time. This frees up your team to sell more valuable services, putting your knowledge first and relying on software to do the heavy-lifting in the background. This is a benefit for both small and large firms, but it gives the smaller practices a leg up they’ve never had before.
Software like Futrli allows you to monitor financial information in real-time, which is crucial for business owners as they can begin to make better business decisions. This is the kind of service that is becoming expected, as it provides such a lot of insight for advisors and clients alike. It’s this that is giving small firms an edge. They’ve previously been unable to focus so much energy on providing these kinds of insights as so much time was taken up by compliance and tax services. Truly adding value to client businesses is aligning the small firms with advisory.
Small firms may also find they’re saving money on hiring for specific tasks, therefore streamlining their teams. In turn. there will be more resources to upskill their teams. Being part of a nimble team with plenty of opportunities to learn will see advisors become more skilled in their work, faster.
Technology brings flexibility on overheads
The cloud brings benefits in infrastructure costs. It lowers the overheads of licensing, keeping software up-to-date, housing data and scaling. But, it might also open up opportunities for new, more streamlined ways of working.
One way to speed up your communication with clients is to use video calls. Being able to talk face to face (even if it is through a screen) makes meetings more efficient as questions can be dealt with instantly. At the same time, the personal nature of the meeting is maintained. By using features like screen share, you can interact almost as if you are in the same room.
While larger firms may have the ability to serve a wider assortment of clients, smaller firms can be more agile, therefore helping cure pain points quicker, as there are fewer people in the hierarchy to run ideas up. Smaller teams can also benefit from a more flexible culture – there are fewer rigid, long-standing rules and regulations, therefore working when they can might give these advisors an edge.
Technology brings the opportunity to serve new markets
Before the cloud, smaller firms would have only served the businesses around them, in their town or city, rather than accessing new markets. If a firm was located on a high street, for example, they would have likely only been working with the businesses neighbouring their practice. Now, because you can communicate easily with people globally, you’re able to connect with them with ease.
When you can be available to clients in a flexible way, you’ve aligned yourself with the way many business owners work. Furthermore, functionalities like alerts mean you don’t need to check into each client dashboard anymore. Keeping everyone’s business healthy, we’ve updated the alerts to automatically watch over the core KPIs of a business. Therefore, smaller firms are able to service more clients than ever before. Because of automation, workloads are decreased meaning smaller firms’ books can fill up without impacting the level of service being offered.
Recruitment and retention
With a less corporate culture, you may find you’re attracting different kinds of people in a small firm. People that are attracted to smaller firms are likely to be a little more laid back, so may be better suited to flexible hours. If overheads are saved by remote working, the working day can be scheduled for when it suits the market best.
You’re likely to reduce stress levels for your team if they’re able to work remotely, too. Cutting out the mandatory commute means your staff can log in as soon as they’re ready to work, without the sometimes painful battle to the office. Less stress means happier staff, and that usually equates to better service for the people that really matter – your clients.
In larger firms, though, advisors have the chance to progress up the career ladder faster. They may offer training across a broader variety of industries, too, which is a big attraction for some advisors. With a clear career progression path in sight, large firms will no doubt attract a large proportion of talent. In smaller firms it’s likely promotions will come up less often, but there is more professional support. For advisors choosing which would be better suited, you must weigh up the pros and cons, deciding what is the most important thing for you and your career.
The way technology is going, there’s so much space for smaller firms to compete against larger ones. The tools on the market now lend themselves so much to advisors being the go-to person for business owners, there’s not a huge amount of difference in what large, medium or small firms can offer. What’s crucial at this point, is making sure each team member and client is comfortable with how you’re working and understands the benefits.