The CPA business model is getting disrupted:
- Too little value is passed on to the lowest levels of folks doing the work
- The expectation of high billable hours creates a conflict with client service quality, detracts from real drivers (like revenue and profit), does not reward efficiency
- The ambiguity of how one is performing in their role or what it takes to advance their role, if they desire, leads to job seeking elsewhere
- Moving up the ladder increasingly makes managers and administrators out of accountants, which is not the expertise of those individuals nor does it bring the most value to the firm per dollar invested
- Smaller firms continue to merge into larger firms, and larger firms continue to diversify revenue away from traditional service lines; these conglomerates go against the consumer preference of choosing the best in each category vs a one-stop shop
Traditional CPA Model
- Visit once per year for income tax preparation
- Prepares financial statements that only your bank asks for and understands
- Does not offer any advice or insights to your company or your industry
- Unable to window shop – pricing and exact services are always at least a phone call or meeting away
- Pricing is ambiguous; the rate depends on the person doing the work rather than the level, complexity, or value of the work
- Afraid to call for quick questions throughout the year or unsure of when to engage with them
Reimagined Model with NKW
- Recurring touchpoints (weekly, monthly) are a standard part of services
- Prepares management-friendly reports, including charting and dashboarding of key metrics
- Incorporates advice from experience serving other clients in the same industry into regular advisory sessions
- Comprehensive website that details service offerings (including examples), explainer videos, cost drivers, fee minimums and guidelines; easy to book a no pressure introductory meeting if interested
- Clear pricing on proposals, engagement letters, scope changes, and invoices
- All clients receive a check-up call from their account manager at least every 6 months
What we set out to create here is a truly customer-centric model. Instead of setting minimum fees, we are setting minimum value that clients should get from us. Instead of passing through technology and app fees, we absorb them into our cost structure. Instead of incentivizing employees to bill hours, we incentivize responsiveness and touchpoints. Instead of price setting on billable rates, we price based on client revenue.
Leave a Reply