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Using your PC as a revenue generating partner.

A Vendor Perspective

The accounting business is presently undergoing major changes. Billable hours and revenues are being reduced as a result of adverse economic times. In many cases, much of the revenues lost are viewed as permanent. Clients are finding that they can do without some of the basic services previously provided by their outside accountants, thus creating this permanent loss in revenues. Although not totally preventable, an opportunity exists to offset the decrease in basic services for CPAs.

However, these lost revenues and the economic downturn have created exciting opportunities for the enterprising accountant by generating revenue from the use of personal computers and providing valuable services, not presently provided, to their clients.

One success story, is that of David J. Anderson, a certified public accountant from Minneapolis, Minnesota. He describes that "the introduction of the personal computer into the public accounting profession has opened a new arena for accountants to compete. The primary and initial benefit was in the automation of bookkeeping, accounting and wordprocessing. The affordable and user friendly, in-house tax preparation software for public accounting has taken a positive and efficient turn for the best." He states that "the real advantage is the potential for expanded services. Everyone in the accounting industry is feeling the pressure to expand their services to enable them to compete for existing as well as new clients. Smaller firms and sole practitioners can now offer clients a variety of services that they previously did not have the resources to provide. Using a PC and specialized software, accountants can now perform the number crunching tasks more efficiently and provide specific service at an affordable price.

For instance, a preliminary valuation of a business once took at least a day to compile information, "crunch numbers" and make a calculation of the entity's value. Using specialized software, the analysis can be performed in as little as two hours, with an engagement letter, work papers and a final report.

There are many other areas in which specialized software can assist a CPA. Cash flow forecasting and budgeting, loan proposals, financial statement analysis and business plan preparation are only a few of the many areas. The major point is the accountants must identify the areas of their clients' needs and invest in software that will benefit both the client as well as their firm. The cost of the software versus time savings and client satisfaction must always be evaluated. Generally, the result is an investment that pays big dividends in both increased billing, recurring revenue and client satisfaction."

Today's proactive manager is determined to make financial consulting at least 20% of their annual (non-cyclical) revenues. Financial services including business valuation, cash flow management, loan packaging, performance analysis, buy/sell agreements, locating financing sources, etc. Choosing the direction of consulting services will partly be determined by your or your staff's capabilities and interest. Certain employees may be excited to learn new applications while others may resist the transition to learning new areas of service. There are many ways to motivate and train your staff including seminars, software tutorials, training guides and CPE courses. All of these methods are inexpensive, efficient and readily available.

On the marketing side, consistent and effective client and prospect database management is essential to the success of these new endeavors. The method in which you organize data on clients and potential clients is crucial. Direct marketing efforts can be accomplished faster, more effectively and at a minimal cost with a quality database contact manager.

To market effectively, it is necessary to have an organized and easy retrieval of specific information from a client/prospect files. Targeted and informative direct mail campaigns to clients and prospective clients need to be communicated to constantly. Informative newsletters, FAX, letters and/or postcard contacts should be performed monthly.

Marketing these services can be as simple as making your clients' aware that you offer them. Generally falling under the broad service of "Management Advisory Services,", this largely misunderstood market can be targeted to your current client base. As you know, a client is not only a tax, client write-up or audit prospect but potentially an annual valuation and/or strategic planning client as well.

As an accountant, are you prepared to assist in a working capital loan or the sale of the business? If not, why not?

As a proactive accountant with the appropriate software currently available you not only can handle monthly financial statements but can also provide a monthly interpretation of performance, business value, comparison to the industry and more. This can all be done with very little effort, learning curve and cost. Also, the trust that your client feels should not exclusively be based on your skill at preparing his taxes. Build this trust into consulting on their performance and for enhancing your revenues.

In today's competitive arena, it may be necessary to show more than your tax credentials to attract new clients. Prospective clients will look your way if they know that you are a full service firm. However, you must be able to outline these services to them, as well as show why they are necessary. Why? Because many are not aware these services exist or, if they do, where to find them.

Be prepared with sample reports to show the type of information your firm can provide for a client requiring a business valuation or a business loan by offering a portfolio of sample reports. This will not only boost your professionalism, but also help land the account and sell additional services.

Various marketing ideas are available in the free practice development bulletin from ValuSource "Starting or Enhancing Your Business Valuation/MAS Practice." Requirements, fee structures, assignments, liability and strategies as well as specific marketing procedures such as client management, seminars, attorney contact and direct marketing and resources are covered in this report.

Software is an excellent and affordable means of increasing your productivity and profits. There are various professional packages available that will fit your needs for under $500. This is the investment that puts you in position to perform financial analysis tasks at a very low man-hour cost. Training employees for these packages only enhances your value by automating analysis and presentation.

All accountants, in these difficult economic times should be meeting with their clients to help them see what their financial future hold. Accountants should spend less time in history and more time in the planning process to help their clients achieve success. Give yourself the competitive edge. Provide new services with your computer that are equally as important as reviews, audits, compilations and tax returns. The computer is a revenue generator. And remember "vendors" are available to help and to provide assistance as well as guidance. Simply |selling' a product to your client won't help your firm in the long run. The same is true for vendors. We are available to do more than |sell.'

Michael B. Bray is the Director of Marketing for ValuSource Development, in San Diego, California. He welcomes comments from readers at (800) 825-8763.
COPYRIGHT 1992 National Society of Public Accountants
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992 Gale, Cengage Learning. All rights reserved.

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Title Annotation:personal computer
Author:Bray, Michael B.
Publication:The National Public Accountant
Date:May 1, 1992
Words:1170
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