Five Uses For Industry Data to Help You Grow Your Firm
- By Liz Briggson
- March 2nd, 2018
This week, we welcome Sageworks as our guest contributor. We are appreciative of our partnership with Sageworks and believers in their mission to equip accountants with better information to serve clients more holistically.
Mary Ellen Biery, Research Specialist and Financial Writer at Sageworks, shares five uses for industry data to help you grow your firm and enhance client service.
Accounting firms often say it’s the high-quality service they provide that sets them apart from their competitors. However, if everyone is saying that, are they actually differentiated?
A clear differentiator helps your firm stand out with prospects and existing clients. One way to distinguish your practice is to incorporate the use of industry data. Here are the five main ways that accountants can utilize industry data to strengthen current relationships and build new ones.
Boost revenue per client. Your clients currently receiving audit or tax-return services could possibly gain value from guidance on their firm’s finances and operations. Utilize industry data to go above compliance-only services and provide other services like business advisory services. Compare the client’s present performance against peers and assist them in creating ways to leverage strengths or improve on flaws using the data. How do profits compare with peers in industry? How do expenses compare to the competition?
Research from industry consultant Allan Koltin demonstrated that the more services used by the client, the higher the rate of retention. Similarly, another study found that around two-thirds of accounting and financial services buyers don’t know the full range of products and services offered by their accounting services provider. However, 44 percent indicated that they would be interested in more services.
Key performance indicators (KPIs) for specific industries can help the client understand how financial metrics relate to cash flow and profits. Examples of KPIs that can be useful are subcontractor costs for construction companies or food costs to sales for restaurant owners.
- Assess industries you could serve. Industry data gives you the ability to look at performance trends and gauge prospective market opportunities across industries. Identifying rapidly growing industries or those with increasing margins can give businesses more financial latitude to afford new accounting and advisory services. Specializing in certain industry niches or groups can help boost your own firm’s returns and improve efficiency.
- Win new clients. Show new customers you understand their problems by using industry data to establish your expertise. Look at a benchmarking analysis of present clients operating in same industry to analyze potential strengths and weaknesses. Use this information to build your advice library. You could also pull a summary report of industry data for short notice meetings to decrease the amount of preparation time required.
- Increase cash for your business clients. If a trusted individual ever approached you and said, “I have found an attractive group of customers that I believe you could reach,” you would be appreciative, right? Bringing market intelligence to your clients as a trusted advisor would likely be appreciated. The data and your knowledge of the client can be used to recommend markets for their goods and services. Which industries are rapidly expanding in the region? Which industries should be approached carefully as they have a high risk of failure?
- Spot problems before they arise. Use industry data to help diagnose profitability or cost trends that might cause your client to slip up. Industry data can reveal problems that your client isn’t currently dealing with, but others in the industry are. For example, seeing payments from vendors slow across the industry can prompt you to remind your client to diligently manage receivables.
Sageworks aggregates private company information for benchmarking and develops financial analysis and risk management solutions. Learn more about how data can help clients better understand their financials and key metrics.
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