The fastest-growing services tax firms are offering

LexisNexis recently spoke to tax professionals to learn more about the fastest-growing services accounting firms are offering. We also looked at the 2021/2022 Global Advisory Trends report for insight into their confidence providing advice outside core accountancy and bookkeeping services, and what fees accounting firms would like to grow in the next 1-2 years.

This article will summarise some of the findings.

Services and fees firms are looking to grow

Accounting firms are fully aware the industry is changing and the need for some services is increasing. In response, firms are investing in training and upskilling to pivot to these services in the next 1-2 years. There is also an increase in recruiting a new generation of advisors to meet these demands.

So, what are the services that firms are looking to grow?

• Cash flow forecasting is the top priority, with 69% of respondents saying this is the service they would like to grow in the next 1-2 years.
• Strategic planning and coaching came in as the second highest priority, as 65% of respondents mentioned these services as their focus for the next 1-2 years.
• In third place, virtual CFO and advisory work is close behind at 63%.
• More than 50% of respondents mentioned ongoing accounting and assistance (58%), budget creation (55%) and cash flow management/debt reduction, etc, (51%) as the fee lines that they would like to grow in the next 1-2 years.

Other services mentioned as priorities to grow are:

• Tech stack assistance - 27%
• Industry specialism - 25%
• Capital or debt raising - 16%
• Not-for-profit work - 16%
• Franchise reporting and advice - 12%

0.2%of respondents ticked the “Other” box for what fees they would like to grow in the next 1-2 years.

Before advising clients on these service areas, firms must ensure they have the expertise to advise clients properly. Getting things wrong can be costly on many fronts. Firms must understand what the client wants and be able to provide strategic advice.

Download Tolley’s new report: Advicepower! The tax accountants turning to advisory services

How confident are firms to provide advice outside core accountancy and bookkeeping services?

LexisNexis investigated how confident firms are in providing advice outside core accountancy and bookkeeping services. The Sage 2020 report delivered the following results.

Overall, over 70% of firms are confident or very confident that they can provide advice other than in accounting or bookkeeping areas.

The Sage report asked respondents to indicate how confident they are in three areas, outside core accountancy and bookkeeping services.

1. Business management and advisory services (e.g., marketing, cashflow, HR, people management, growth modelling, etc.)

• 50% of firms that took part in the survey said they are confident that they can provide these services
• 29% said they are very confident
• 14% said they are not very confident
• 3% indicate that they are nervous about providing this type of service
• 4% of firms said they don’t have capabilities in these areas.

2. Industry-specific advice for clients (e.g., standard profit margin for the sector, client sector regulations, recommended cash stockpile levels, etc.)

• 48% said they are confident that they can provide these services
• 27% said they are very confident
• 16% of firms are not confident
• 3% responded that they are nervous about providing services in these areas
• 7% of firms said they don’t have capabilities in these areas.

3. Technology implementation and recommendations beyond accounting and finance (e.g., automation, RPA, timekeeping software, etc.)

• 47% of firms said they are confident that they can provide these services
• 26% are very confident
• 19% are not very confident
• 3% are nervous about providing these services
• 5% ticked the box that they don’t have capabilities in these areas.