In recent years, the concierge model has disrupted the business model of medicine, and now accounting is headed for a similar disruption. CPAs who adopt the concierge model choose to focus their attention on a restricted list of high-value clients in exchange for an added fee. But adopting a new business model can seem risky. Why are so many CPAs choosing to make the switch?
1. Shorter Work Week
At least 83% of CPAs routinely work more than 40 hours per week outside tax season, according to an AICPA survey, with many regularly clocking 50 or 60 hours.
Among those CPAs burning the midnight oil, 77% report higher levels of stress and are more likely to consider changing jobs, even at the cost of a pay cut.
In the accounting world, it seems there's no such thing as a 40 hour work week. But the concierge model deliberately upends that notion by limiting the client load. As a result, CPAs gain the opportunity to work a normal 40 hour schedule and enjoy a greater quality of work-life balance.
2. More Professional Growth
Keeping up with the changes and increasing complexity of tax laws was ranked as a number-one concern among sole practitioners in a 2017 survey. The concierge model frees up more time for CPAs, enabling them to get up to date, refine their skills, and pursue the continuing education they need to stay competitive.
3. Consistent Cash Flow
Most CPAs cram the last few months of the year with education, exams and conferences. Clients essentially disappear between October and January, making those months the worst in terms of cash flow.
But in the concierge model, clients have paid a membership fee, which depending on how it is set up means the concierge CPAs continue to receive regular checks. Their cash flow remains predictably consistent, month after month, year after year, without the usual dip in the final quarter.
4. Extra Time to Serve Clients
Although most CPAs are deeply committed to providing their clients with the highest quality service, their efforts are frequently derailed by heavy workloads. As their client base grows, it becomes harder and harder to deliver excellence consistently.
The concierge model eases the workload and allows dedicated CPAs to go more in-depth with each client. By cutting the number of clients they service in half, they gain the extra time they need to provide personalized service to their high-value clients. They have much more time to devote to planning, strategizing, and looking to the future.
5. No More Unprofitable Clients
Every CPA firm has clients which are more trouble than they're worth. These are generally demanding, labor-intensive clients who require more than their fair share of time and effort. Sometimes, sadly, these unprofitable clients are friends or family, which makes it difficult to turn them away.
But when a CPA firm converts to the concierge model, those unprofitable clients quickly disappear. If they decide not to pay the membership fee, they can be referred to outside CPAs who will typically pay for the referral. And if those unprofitable clients do decide to join and pay the membership fee, they suddenly become profitable. It's a win-win.
Either way, the concierge model allows CPAs to let go of unprofitable clients and spend their time working with quality clients who appreciate their work.
6. Network of Partners
Concierge CPA firms have access to a network of estate planning attorneys, trust companies, insurance companies, payroll companies, and other partners. Having those additional resources in place gives the CPAs valuable tools to expand their capabilities and better serve their clients.
7. Value Appreciation
The concierge model alleviates one of the biggest concerns about buying or selling a CPA practice: whether the clients will stay or go. Clients of concierge accountants have more universal expectations and experience, and are much more likely to stay.
That makes the practice more attractive to a potential buyer, who will be more comfortable knowing that the clients will make the transition. That, combined with the predictable level of cash flow, leads to a higher valuation multiple for the company.
8. Succession Planning
Today, more than half of all CPAs are at or near retirement age. But retirement often means trying to sell their practice, a difficult proposition considering that clients usually have a personal relationship with the owner of the firm.
In the new model, most concierge service companies typically work with the retiring CPA to purchase the firm. That way, the CPA has a structured strategy in place when needed, and can retire or change jobs on their own terms.
Concierge Accounting Is Growing
Although the concierge CPA concept is still new, it is poised to shake up an industry that hasn't seen any major changes in decades. Companies such as VIPCPA.com are paving the way for accountants interested in switching to this innovative business model.
Now, CPAs can focus on providing unsurpassed treatment to a very select group of clients who are willing to pay for VIP treatment. While they’re at it, they can also achieve greater professional growth, consistent cash flow, additional resources, a succession plan, and more profitable clients – all in a shorter work week.