The accounting industry hasn't changed much in the past century. During “busy season,” accountants can expect to work 60, 70 or even 80 hours a week. That's true even for experienced CPAs who have been doing this for 30 or 40 years. There just isn't enough time to spend with each client, and no way to give them the kind of service they want. Worst of all, these problems persist year after year, until you burn out or retire.
But now some CPAs are embracing a new way of doing business. The concierge model of accounting is turning all of those assumptions upside down.
Concierge clients pay an annual membership fee to receive undivided attention and highly personalized advice. Much in the same way concierge medicine streamlined the medical industry, concierge CPAs are beginning to solve the most pressing problems in the accounting industry.
Problem #1: Nobody wants to be a CPA anymore.
Between 1990 and 2014, the number of candidates sitting for the Uniform CPA Examination dropped 36%, according to the AICPA. The sad truth is that today, fewer people want to become CPAs.
Part of the decline may be due to the additional work experience and credit hours now required to become licensed. But the deeper problem is likely the horror stories about grinding away 60 to 80 hours a week during the busy season, year after year, with no relief in sight.
The new concierge model allows CPAs to lighten their workload by cutting their client list in half. They can work a normal 40-hour work week and still give their clients higher quality attention and advice. That takes many back to the reason they became CPAs in the first place: to provide valuable tax planning advice and help clients plan a better future and legacy.
With the concierge model, college students have more incentive to become a CPA. The opportunity to work side-by-side with clients and provide much-appreciated advice can make the extra year of college a worthwhile investment.
Problem #2: Clients are desperate for better service.
Nearly every CPA firm claims to deliver excellent service, but the vast majority of clients say otherwise. According to the Harvard Management Update, 80% of companies surveyed said they offer superior customer service. Yet only 8% of their customers agreed. That reveals a huge disconnect between expectation and reality.
Most CPA firms don't know how unhappy their clients are, because they don’t have a process in place to measure client satisfaction. As a result, CPAs tend to be overconfident about their ability to retain clients. When they lose ‘good’ clients, they are forced to keep ‘bad’ clients to keep the cash flow consistent.
Yet poor client service is the primary reason 70% of clients change CPA firms, according to a Bay Street Group survey. It’s easy to see why. Heavier workloads make today's CPAs more pressed for time than ever, and service quality can suffer as a result.
Nearly half of all consumers (45%) are willing to pay more for better customer service, according to a consumer research report from Accenture Strategy. Clients with higher expectations are an ideal match for the concierge model, where they pay an added fee to get the personalized, high-quality service they really want.
The concierge model allows clients to receive the kind of service CPAs know best how to deliver, but which has historically been reserved for the ultra-wealthy who pay for the extra attention.
Problem #3: Most CPAs don’t have an exit strategy.
The American Institute of CPAs estimates that 70% of CPAs will be over 65 years old within the next decade. But the majority do not have an exit plan for their business. Many plan to keep working until their health fails, or they lose so many clients that their practice is no longer profitable.
Because their business model is based on individual relationships with clients, it can be difficult to sell a practice to a successor. Unfortunately, the most common exit strategy for CPA firm owners is to simply turn out the lights, lock the door, and walk away.
But the concierge model generates a steady revenue stream from client membership fees, which is attractive to a buyer. In addition, concierge clients are accustomed to a consistently high-quality experience and are more likely to be retained when the practice changes hands to another concierge CPA. This combination makes concierge CPA practices much more sellable at retirement.
Are concierge CPAs about to disrupt the accounting industry?
Concierge accounting not only makes the CPA’s job easier, more secure and profitable, it also empowers CPAs to provide customized, personalized service with the human touch. And that addresses the most important challenge facing the future of the accounting industry: the desire for a better experience.
Today's clients expect their accountants to help guide their financial decisions. They want more insights, deeper analysis and a closer working relationship with their CPA. All of that is provided by the concierge model.
The very nature of our society is always looking for more. Better service. Better access. Better value. Concierge accounting delivers that to clients.
Every CPA dreams of working fewer hours and providing better service, while making the same money. Concierge accounting delivers that to the CPAs as well.
That is the definition of a win-win.