Digital disruption and increasing price pressure for compliance work within the accounting sector has resulted in an increase in the number of mergers and acquisitions in recent years. Many sole practitioner firms experiencing static or declining profit are electing to sell and retire or alternatively merge with larger firms simply because they see it’s just too hard to continue on their own.
In this environment, many industry observers have suggested that the sole practitioner is a dying species, to be replaced by larger multi-partner and corporatized advisory firms over time. Certainly, anecdotal evidence within the M&A space suggests that this is happening and is unlikely to abate.
However, within this environment, we’re starting to see the emergence of a new type of accountant. This accountant runs their practice in the cloud and they may not even have a traditional office set-up. It’s likely that they operate from a business hub and their staff may work in different locations. They utilise outsourced accountants for the completion of bookkeeping and tax compliance work. They employ part-time staff (probably but not essentially accountants) who have strong communication and engagement skills. Most of their ‘productive’ time is spent actually out seeing clients rather than sitting at their desk punching numbers, producing reports or sending emails.
At a workshop I recently attended run by The Gap (a new cloud-based business development system for accounting firms), I was talking with one of these new-age sole practitioners about how she ran her business. She referred to herself as a ‘solopreneur’ and my curiosity was triggered.
Are you a solopreneur?
Solopreneurs are a powerful and growing force in today’s career landscape. A solopreneur is “a business owner who works and runs his or her business alone.” A solopreneur is also the proverbial chief cook and bottle washer, who started the business, owns the business, runs the business and is responsible for the business’ failure or success. A solopreneur is not the same as an entrepreneur, however. Both assume risk and build a business, but a solopreneur does it alone.
The entrepreneur engages traditional forms of business-building, including the hiring of employees. But the solopreneur chooses whether to grow the business with contract agreements or outsourced providers rather than the standard model of employer/employee.
[Source: Neil Patel, see link at the end of this article]. Also have a look at ‘The rise of the million dollar, one person business,’ link at the end of this article.
It’s clear that solopreneur accountants relish the opportunity to develop a new type of business unencumbered by old age thinking about how an accounting practice should operate. They are not interested in being an old-style accountant. They want to develop strong external professional partners and advisors to help them deliver services to clients. They see the incredible opportunities that exist with really engaging clients in coaching conversations. And they’re able to get clients to commit to ongoing advisory services. These are often the same clients that complain about the cost of tax compliance services. It’s clear that it’s not the fee that’s the problem, it’s the level of value they perceive in the services they receive from their accountant.
In fact, whilst this new breed is still an accountant by training and experience, they’ve been able to reframe the relationship they have with their clients. Of course, they do the tax compliance work (or outsource it). More importantly, their knowledge, skill and motivation is based on a strong curiosity about their clients and a desire to work more closely with clients. They’re looking for reporting and other software tools to help them deliver these services, but they see these tools as a support to service delivery, not as the service itself.
In the past couple of years, I’ve changed my attitude towards the future of the sole practitioner (refer to my blog ‘RIP for the Sole Practitioner?’). It seems that the traditional accountant as sole practitioner is a dying species. However, this species is being replaced by a new agile, tech-savvy business owner who really understands what clients want and what they will pay for. We’re seeing social evolution at work!
7 key actions for successful solopreneur accountants
- Get all firm accounting and practice management software into the cloud
- Outsource bookkeeping and tax compliance to free up time for clients
- Employ staff for their client relationship skills as much as their technical skills
- Encourage clients to use technology to streamline processes including accounting
- Present financial information to clients in a way that’s meaningful
- Develop strong active listening, coaching and advisory skills
- Put systems and processes in place to leverage advisory work
As well as implementing these actions, solopreneur accountants are also seeing the value of specialising in niche markets including service and industry type. Some firms are developing expertise in relation to cloud integration, virtual CFO and business coaching services. Others are specialising in specific industries including technology, health services, manufacturing, agriculture, retail / franchise and professional services.
What do you think about the future of the sole practitioner? Are you one of the ‘new breed?’
The new age accountant requires skills and capabilities beyond technical knowledge. A recent report by the ACAA identified 7 areas of professional focus for the accountant of the future. These were:
- Technical skills and ethics (TEQ): The skills and abilities to perform activities consistently to a defined standard while maintaining the highest standards of integrity, independence and scepticism.
- Intelligence (IQ): The ability to acquire and use knowledge: thinking, reasoning and solving problems.
- Creative (CQ): The ability to use existing knowledge in a new situation, to make connections, explore potential outcomes, and generate new ideas.
- Digital (DQ): The awareness and application of existing and emerging digital technologies, capabilities, practices and strategies.
- Emotional intelligence (EQ): The ability to identify your own emotions and those of others, harness and apply them to tasks, and regulate and manage them.
- Vision (VQ): The ability to anticipate future trends accurately by extrapolating existing trends and facts, and filling the gaps by thinking innovatively.
- Experience (XQ): The ability and skills to understand customer expectations, meet desired outcomes and create value.
If you’re like most accountants, you probably spend most time focusing on #1 and #7 above. What are you doing to develop the other necessary skills for the accountant (and accounting firm) of the future?
Learn skills of the new-age accountant and advisory firm
A focus on continuous learning is essential. HTST’s eLearning Academy provides a range of self-paced online courses for individuals and firms wanting to develop these new skills. All our courses have specific learning objectives and assessment tasks. All our learners develop practical SMART actions linked to professional development objectives. For more information and registration details, click here