Why Accounting Firms Are Struggling to Retain Clients and How to Reverse the Trend

A key factor that can affect your business is the client experience. When your small accounting firms focuses on customer satisfaction, it helps build a good reputation. Nowadays, for tax and accounting professionals, it’s not just about completing tasks and meeting deadlines. It’s about understanding clients’ concerns and finding solutions that help them.

More firms are now adding customer service roles within their teams. Clients often have questions that require expert guidance by the accountants. However, because the accounting industry is facing a significant challenge: fewer people are entering the field. This shortage not only affecting the future of accounting but also impacts how firms retain their clients. In this article, we’ll explore the extent of the shortage and its implications for client retention.

What is the accountant shortage?

Here are three key points about the shortage:

1. Decline in New Accountants

• There’s been a significant drop in people training to become accountants. This means fewer new accountants are entering the field.
• The decrease in accounting students will lead to fewer qualified accountants in the future.

Aging Workforce

• Many current accountants are nearing retirement, creating a gap in the workforce.
• The average age of accountants is high, with many set to retire soon.

Skills Gap

• Firms struggle to find accountants with the right technical skills, a major challenge for the industry.

Why is there an accountant shortage?

1. Lower Salaries

• Accounting salaries are often lower than in other fields like technology or engineering.
• This makes accounting less attractive to new graduates.

2. Demanding Education

• Studying accounting is challenging and time-consuming.
• It requires completing difficult courses and passing exams.

3. Career Trends

• Many young people prefer careers in technology or digital marketing due to their flexibility and growth opportunities.
• Accounting is seen as less dynamic compared to these fields.

4. Traditional Firm Structure

• Traditional accounting firms often have rigid structures leading to stress and burnout.
• This structure doesn’t offer the work-life balance many young professionals want.

What this means for client retention

The shortage of accountants affects client retention in several ways:

• Delays and Errors: The lack of skilled accountants leads to delays and errors in financial work, which can frustrate clients and erode trust.
• Outsourcing: Many firms are outsourcing accounting tasks, which can lead to inconsistent service quality and impact client relationships.

How do you retain clients during a shortage?

To retain clients, consider these strategies:

• Adapt to Modern Trends: Use technology to streamline workflows and offer flexible working options that appeal to clients.
• Develop Skills: Focus on developing in-demand skills like data analytics and digital tools to provide high-quality services.
• Innovate Your Structure: Move away from traditional firm structures to attract and retain talent, ensuring consistent service quality.
• Personalize Client Interactions: Build strong, personalized relationships with clients to increase loyalty and retention.
• Offer Proactive Support: Provide proactive customer support to address client needs before they become issues.

Other challenges for accounting firms

For largest accounting firms in the world, the main goal is to meet deadlines and stay compliant. Providing top-notch customer service can be harder than it looks. This is especially true for smaller firms with limited resources. Here are some common challenges they face:

Miscommunication

Accounting processes can be complex. Each client has different needs. A one-size-fits-all approach doesn’t work here, which leads to problems. Accountants may struggle to share important information clearly. This can leave clients confused and lead to misunderstandings.

Trust issues

When businesses hire accounting firms, there may be trust issues. Trust must be built over time; it isn’t automatic. This can become difficult during audits. If results are not in the client’s favour, they may feel like the firm is against them. It’s important for firms to stay neutral while keeping clients happy, especially at the start of their relationship.

Delayed responses

Small accounting firms London often juggle multiple projects at once. This can lead to delays in responding to some clients. Such delays can frustrate clients and harm relationships with the firm. Meeting expectations becomes especially tough during busy times like tax season or year-end.

Personalisation vs Automation

Technology and automation can help accounting firms operate more smoothly. However, they often lack the personal touch that clients want, which can make the customer experience less satisfying.

Standing out in a competitive market

The accounting industry is competitive, with many firms vying for clients’ attention. For accounting firms in the UK, it’s crucial to define their value proposition along with offering specialised services and positive customer experiences. Balancing profitability with client satisfaction remains a key challenge for success.

Tips for strengthening client relationships

1. Set clear expectations with new clients

It’s important to communicate clearly with your clients. This helps avoid surprises for both sides. When starting with a new client, write down all aspects of your services.

Consider creating a standard document for each new client that includes:

• The services you will provide.
• The expected timeframe for completing those services.
• How often the client can expect to hear from you.
• Your response times for emails and calls, along with how they can reach you.
• Any extra fees for late payments, urgent work, or additional services.

Clear expectations help clients know what to expect and reduce confusion.

2. Gather client feedback regularly

It’s essential to talk to your clients often, especially those you have retained. This gives you valuable insights into what they like about your services and why they trust you.

This information can help shape your marketing messages and highlight what makes your business appealing. If you lose clients, ask them why. Understanding their reasons can help you improve and reduce customer turnover.

Using customer feedback tools can make it easier to run surveys and measure customer loyalty through methods like Net Promoter Score (NPS) surveys.

3. Be adaptable to client needs

The COVID-19 pandemic changed how many businesses interact with customers. Luckily, accounting for retention can be done remotely, making it easy to communicate via platforms like Zoom. You can use various account retention strategies to perform this activity.

Using technology to engage with customers is vital for keeping them happy. For instance, when onboarding a new client, they might need to upload documents online. If they face challenges, offer to assist them through a virtual call instead of meeting in person.

This accounting retentions to detail can greatly enhance the client experience and increase the chances of referrals.

4. Expand your services and markets

As you gain experience with clients, you will notice common challenges they face beyond taxes.

For example, more people are working remotely and may need guidance on tax status or residency. If this becomes a trend, consider creating a service that addresses these needs.

If multiple clients seek help with cash flow management, position your firm to assist them in this area as an extension of your services.

The type of clients you serve will guide the additional services you offer. For instance, cash flow projections may appeal more to businesses than individuals. You could also consider teaming up with other financial professionals for mutual referrals.

Bringing new services to market allows you to reach new clients and grow your business.

5. Request referrals from satisfied clients

As you improve relationships with your clients, ask happy ones for referrals. Customers who come from referrals tend to stay longer than those from other sources.

You can encourage referrals by offering incentives like discounts or small gifts such as gift cards or bottles of wine. Satisfied clients are usually willing to share your details if you ask!

Building a personal connection with clients—like remembering their birthdays or asking about their families—can help create lasting relationships that benefit your business in the long run.

6. Customise your client communication

There are many ways to make communication more personal without spending too much time on it.

Use platforms that allow you to send automated updates to clients about their tax returns or when you need additional documents from them. You can use email, SMS, or an app if available.

These channels can also promote new products or services. While personalising communication may require extra effort, it pays off in the end.

Research shows that consumers prefer brands that offer personalised experiences. Companies that focus on personalisation often see significant returns on their investments.

Conclusion

Growing your accounting business is an ongoing journey. It’s just as important to focus on keeping customers as it is on attracting new ones.

By finding effective ways to gain new clients while also improving retention strategies, you can create a sustainable path for helping your customers and expanding your business over time.