Managing any kind of business comes with a range of challenges, but the frequently changing regulatory requirements of the tax world, make it particularly challenging for CPA firms to provide their essential services.
With obstacles often thrown in their path, they may find that growth and profitability are difficult to achieve within their already demanding and continually dynamic industry. Fortunately, there are a number of things CPA firms can do to overcome such challenges and better navigate a successful path forward.
Here are 5 common challenges faced by CPA firms, and what they can do to overcome them:
- A lack of manpower
Often struggling with staff shortages, gaps in skillsets, and distributing workloads evenly, CPA firms can implement the following strategies to try and overcome these problems:
- Talent acquisition: a strong strategy for recruitment can help firms attract (and ideally retain) skilled and talented accounting and tax professionals
- Training and development: upskilling staff and trying to address any gaps in their skillsets can help meet client demands and expedite growth
- Workload management: prioritizing tasks, allocating resources and effectively managing projects can help avoid staff burnouts and errors
- Outsourcing: a cost-effective and convenient solution, outsourcing can help firms better manage their workload during busy periods of the year, such as tax season
- Staying up-to-date with tech and regulatory changes
Continually faced with changes to regulations and technology, the accounting industry demands that its professionals keep themselves abreast of all relevant changes, but this can be easier said than done. The following practices, however, can help with this particular challenge:
- Continuous learning: by encouraging employees to develop their professional skillsets through conference attending, webinars, and training programs, CPA firms can ensure that their teams are continually updated on all changes to tax laws, and accounting standards
- Adopting technology: from data analytics and automation, to accounting software, all of your processes can be streamlined and made more efficient by adopting and embracing the latest technological tools
- Being error-free during tax season
Although it comes around every year at the same time, the challenges brought forth by tax season never seem to lessen, and maintaining accuracy and meeting deadlines can be tricky for smaller CPA firms. With the following approaches, however, these challenges can at least be minimized:
- Process standardization: consistency and error-free work can be better managed with workflows that are standardized, and a series of tax prep checklists that are reviewed frequently
- Quality control procedures: internal audits and peer reviews can help minimize errors before submission
- Better communication: communicating effectively with clients helps to keep errors to a minimum during preparational stages, due to complete and accurate information
- Outsource taxes: use third-party services to keep clients satisfied during periods when workloads may be higher and more intense
- Staying ahead of the competition
Being able to explore new streams of revenue while trying to attract new clients and retain them, leaves some CPA firms lagging behind their competitors, but the strategies outlined below may prove helpful:
- Targeted marketing: focusing on marketing tailored to certain industries can help you gain new clients requiring specialist expertise
- Managing client relationships: by communicating regularly with clients and giving proactive advice, your firm can build stronger relationships with clients and encourage them to remain loyal to you.
- Diversification: while preserving your core services, consider offering new services that could attract more clients and boost your revenue
- Keeping in alignment with growth goals
It can be hard to balance your firms’ objectives for growth while maintaining a high level of service to existing clients, but the following tactics should make this easier to achieve:
- Strategic planning: ensure that your growth strategy is developed with your resources, capabilities and client base in mind
- Capacity planning: monitoring and assessing your firms’ workload and capacity can prevent existing resources from becoming overwhelmed
- Team collaboration: by fostering a work environment based upon knowledge sharing and strong communication, you can efficiently manage projects while maintaining a high level of customer service
Outsourcing is a key solution for CPA firms struggling to meet the many challenges of their industry, and that, combined with the strategies outlined above, can help you come out on top in a demanding and highly competitive accounting landscape.
