When thinking about the competitive landscape, what does your accounting firm need to do today to make sure it remains relevant in the future?
Cloud-Based Accounting No Longer Enough
Being a cloud-based accounting firm is no longer enough. Technology is creating market disruption.
There’s new competition in the market. Traditional accounting firms are facing competition from ERP (Enterprise Resource Planning) software systems with built-in AI where automation is available directly to the client. And there are tech-focused accounting firms that aggressively deploy AI, pricing traditional accounting firms out of the market. This essentially puts a lot of pressure on accounting firms stuck in the middle.
Growth for Tech-Focused Accounting Firms
There have been a lot of new players surfacing over the last few years. Many of those are raising VC (venture capital). They look nothing like traditional accounting firms. These companies are built to grow faster and take market share.
Many firms are becoming tech-based. They look more like software companies than anything else. Their branding is vastly different (more SaaS-like). They're fighting nationally for clients and putting a lot of effort into marketing and sales.
Pricing for Tech-Focused Accounting Firms
The pricing model is really disruptive as well. They are using low, disruptive pricing models to poach clients. You’ll find everything from no hourly billing at all to entirely new models where the accounting firm is merely charging a percentage of the invoice amount.
They don’t need to bill for services like traditional accounting firms because of the AI.
All of this is combined with both delivering a much faster response time and providing more nearly identical and continuous services for a fraction of the cost.
Even more detrimental to the average accounting firm is when companies look to do an end-run around accounting ﬁrms altogether. ERP system providers are encroaching into accounting service areas.
Accounting ﬁrms stuck in the past, not implementing AI will eventually find themselves no longer relevant in regard to the competition. These firms will have a bloated cost structure, an antiquated technology stack, invoice processing will be way too slow, and the leadership will find themselves living in the past.
Accounting Firms Need to Stop Client Attrition (Before It’s Too Late)
The silver lining with all of this is realizing it’s time to take some countermeasures. This can be done by implementing AI-driven automation within your organization. Software such as Vic.ai can do this for you. The only way to compete is to implement AI-driven automation.
Without implementing AI, resistors and laggards will struggle to attract new clients and retain existing clients. Heed the warning signs today and take AI-driven countermeasures now against these business model threats.
What is your accounting firm's sentiment with regard to automation, AI, and machine learning? Is AI something you’re looking to implement now? Or are you putting it off until next month or next year? Share your thoughts in the section for comments below.
To learn how accounting and bookkeeping firms can prepare for AI and machine learning, watch the webinar recording on “Automating Outsourced Accounting: How Accounting and Bookkeeping Firms Can Prepare for AI and Machine Learning.”