Is It Time for Firms to Transform Their Business Model?

A recent article in the Journal of Accountancy, written by Miti Ampoma, quotes Lisa Simpson, CPA, CGMA, vice president–Firm Services and head of the Private Companies Practice Section (PCPS) at AICPA & CIMA, as saying "it's important to acknowledge the effects of the past few years. “Many practitioners in public accounting are feeling burned out. They have been in crisis mode instead of being strategic about where they are going, Simpson said. This was necessary to help clients get through the pandemic, but now firms need to recognize how changes caused by COVID-19 — most notably the technology-fueled explosion of remote work and a talent shortage in many firms — have transformed the workforce and firm-client interactions.”

"Everything's different," Simpson added. "It gives firms an opportunity to think differently about how they operate."

According to the article, there are five areas firms should assess as they evaluate how to succeed in a changed business landscape:   

1. Review your operations and business strategy. Start by analyzing your current business model and by making sure your firm has a clearly defined and current strategic plan.

Ampoma says that a strategic plan offers a road map that guides operational decisions and ensures your efforts are aligned with broader goals and objectives. It provides structure that allows you to track progress toward goals and identify ways to improve.

“To assess your situation, address key questions about your business operations and strategy. Consider areas such as your firm's niche in the market. What differentiates you from your competitors? If you designed your business around your ideal client, what would that look like? How does that compare to what you have now? Are your growth targets clear, measurable, and achievable? Are your vision, mission, and purpose clear? Do your structure and strategy support those objectives?”

2. Reassess your relationship with talent: Ampoma believes that creating a culture in which employees feel valued for their various backgrounds and viewpoints matters more than ever, “Encouraging flexibility about when, where, and how your talent works can create a positive work environment and in turn a better work/life balance. Firms that recognize the need to keep diversity, equity, and inclusion (DEI) top of mind position themselves for greater success in the current professional environment.”

3. Reevaluate governance structures: In a rapidly changing and complex environment, evaluate whether your firm's leadership and operational structure support timely, strategic decision-making focused on the long-term success of the firm. Does a model of building partner consensus delay or hinder decision-making? Is there a need for a corporate governance structure that allows an owner or a team to focus on running the business? Consider the pros and cons of how decisions get made and how your firm's ownership structures can adapt to keep pace with changing times.

4. Reconsider your client service offerings and billing model: What services does your firm offer? Is your business based on traditional tax and/or audit? Have you branched into growth areas such as client accounting and advisory services? Do clients pay for your time or your expertise? Do your clients see you as a trusted adviser or a necessary evil? “Those are just some of the questions to consider when assessing the types of clients your firm has and how you bill them for the services you provide, Ampoma says.

5. Rethink how you leverage technology. Technological advancements, including robotic process automation and artificial intelligence, is enhancing standard accounting processes, leading to new opportunities for CPAs. “Three challenges — budget constraints, lack of leadership buy-in, and the need to strengthen staff technological knowledge and ability — have kept some firms from adopting new technologies. But know that you can make incremental progress, which makes it easier to manage costs, ensure buy-in, and train teams.”

For more suggestions, have a look at Is it time for firms to transform their business model? - Journal of Accountancy.