Accountants, often considered one of the most secure professions, are beginning to feel the heat of competition from one of their greatest assets. Computerized accounting revolutionized the industry and you would be hard pressed to find a CPA who would want to go back to the days before computers and spreadsheets. However, those same software companies that have been invaluable to the profession are moving online and competing directly with accountants for clients. Through cloud-based services, software providers are attempting to capitalize on the ease of cloud-computing and allow people to completely bypass traditional accounting firms.
Intuit Adapting To Cater To Generation Y
It has been said that Generation Y has become Generation DIY, and Intuit is banking on it. This up-and-coming generation of young adults tends to prefer hands-on experience and personal involvement. Even in business accounting and taxes.
Intuit, who has already shifted their platform several times in their 30 years of existence, is adapting to meet that need. They have shifted the majority of their research and development from desktop programs to cloud-based programs. They recognize that convenience is a huge selling point for many people, especially younger people. Those that wouldn’t be willing to spend $200 on a program that they have to install on their desktop don’t even think twice about a $20/month cloud-based subscription.
Increased Competition For Small Business Accounting
In the most recent quarter, Intuit grew 40% in small business, up from 36% the prior quarter1. Not only are they attracting more customers with their new cloud-based offerings, but they are attracting them at increasing rates. Sixty-five percent of small businesses already use the cloud to manage day-to-day tasks, up from 38% only two years ago2, so it is an easy transition for their accounting as well.
CPAs often feel that because of the superior value that they provide to clients they are immune to this kind of competition. What they forget is that many small business owners are short on both time and money, and may make their decisions accordingly.
Increased Competition For Tax Preparation
Tax preparation may be the biggest battlefield for accountants facing the onslaught of online providers. IRS data shows that about 60% of electronic filers hire a professional to prepare their taxes for them, a number which has remained steady over the past several years3. However, the number of people filing their own taxes from a home computer, about 27 million, was up about 6% from 2013 to 20144.
Where the numbers really start to become concerning for tax professionals is when you begin to break things down by age. Older people prefer to have a professional prepare their taxes. Among taxpayers over 65, 42.5% have an accountant prepare their taxes for them and only 26.2% utilize a digital tool, such as Intuit’s TurboTax. Skip down two generations and among taxpayers aged 25-34 you find that nearly half, 45.5%, use a digital tool to prepare their own taxes while only 21.3% work with an accountant.
It is dangerous for accounting firms to dismiss these numbers. Younger taxpayers, those with a generational bent towards doing it themselves, are being aggressively marketed to. They are the big clients of the future and already almost half of them are foregoing a traditional accountant to do things on their own.
In light of this increasing competition for the industry as a whole, it is imperative to set your firm apart within the industry. An excellent way to make your CPA firm stand out from the rest is by adding wealth management services. Such differentiation not only attracts new clients but better satisfies and retains current clients as well.
Get Started Now
If you are interested in a proactive approach to facing the competition, the CPA2 program is your answer. The CPA2 program is a turnkey system offered by Nobile Wealth Management to allow CPAs to integrate wealth management services into their practices without materially disrupting their current business. We have a successful track record of helping CPAs to better face the competition by increasing their service offerings to include wealth management. With our proven model and step-by-step process, there is no easier way to expand your business beyond the traditional accounting services and make it stand out from the crowd. Take action today and call us at 860-659-5977 ext. 204 or email firstname.lastname@example.org.