The Problem with The Accounting Profession
There are two types of accountants.
Type #1: The corporate accountant.
Type #2: The independent accountant.
The corporate accountant is someone that works for someone else. Someone else who needs accounting services — which is pretty much all big businesses. The corporate accountant (whether they’re a CPA, controller, staff accountant, or bookkeeper) all collect a paycheck each week from their employer.
The independent accountant, on the other hand, doesn’t work for one person. They don’t collect a paycheck on a regular basis from one employer. Instead, they collect a paycheck from multiple employers on a regular basis — their clients.
Most big businesses are going to have a use for accountants in the foreseeable future. So, anyone that wants to work in a corporate environment is probably safe.
However, there’s a lot of people (I’m guessing if you’re reading this, you fall into this category) that cannot see themselves working for a corporate organization.
These are people who don’t like things like: the office politics, the commute, their boss, not being in control over their pay, not being in control over their time, not being in control over what you do or how you do it or where you do it.
Because of these reasons (and tons more), accountants have become independent accountants.
Independent accountants have enjoyed, for years, the ability to offer their services on their own terms without the frustration of being a corporate employee.
However, there’s one thing required for independent accountants to survive.
This one thing has allowed independent accountants to survive the last 50 years and it’s the one thing that is needed to survive another 50 years:
The need for your services.
Without the need for your services, the independent accountant has no business.
Without the need for your services, the independent accountant has no reason to exist.
Without the need for your services, the independent accountant cannot be independent.
The problem with the accounting profession is that this ‘need’ is being eradicated.
Slowly but surely.
Here’s three ways:
Way #1: Independent accountants are facing a ton of competition from other accountants.
The barrier to entry to become an accountant, bookkeeper or enrolled agent is pretty low. Which means someone with average intelligence and above average drive could hang out a metaphorical shingle and start their own business.
Which means that there are a ton of accountants out there who, let’s face it, all do the same thing (especially in the minds of the customer).
If all accountants/bookkeepers/enrolled agents do the same thing, then there’s no way for you to increase your fees.
There’s really no way for you to differentiate yourself.
There’s really no way to avoid the daily grind leading up to the next tax deadline.
There’s really no way to avoid scope creep.
Or working insane hours and not getting ahead financially.
Or taking on less than pleasant clients.
Way #2: Independent accountants are facing a ton of competition from software.
The digital world is disrupting most industries.
It won’t be long before there will be more cars powered by battery than by gas.
It won’t be long before you won’t realize if you’re talking to a human or a machine on a phone.
And…it won’t be long before machines will be able to do 99% of what accountants do today.
With the advance in technology, long gone are the days when all is required of an accountant is to transfer the number in one box to the number in another box.
Long gone are the days when the only competition you face are from other accountants. You now face competition from tech. From software.
QuickBooks is serving your clients ads at this very moment encouraging them to use their live bookkeeping service.
Bench is serving your clients’ ads at this very moment encouraging them sign on to their accounting service.
And… all of this tech and all this software is cheaper.
It’s cheaper than you.
Way #3: Independent accountants are facing a ton of competition from those who are giving their clients what they want.
And what do most business owners want? They want their accountant to be someone that can tell them what to do to have a successful business (however the client defines success!).
Most business owners want their accountant to become an advisor.
Most business owners want their accountant to talk to them like a human.
Most business owners want their accountant to make numbers clear and simple.
And the independent accountants who refuse to give into what their clients want have a problem.
A big problem.
They have a problem because the world is changing. And if you refuse to change with the world you’ll be left behind.
And you can no longer be independent.
To avoid the problem, you must become someone that your client needs.
And what they need is:
…someone they trust,
…to tell them what to do,
…to have a successful business.
This is how you avoid competition.
This is how your clients win.
This is how you win.
This post is written by Adam Lean, co-founder of TheCFOProject.org. Have any feedback or suggestions? Send an email to adam@thecfoproject.com.
Want to become an outsourced CFO to small businesses? Click here.
Take an upcoming Masterclass on starting a CFO service. Click here.
