As an accounting firm owner, it’s essential to know which services are the most profitable in 2023. The accounting landscape has evolved, and business owners are looking for more than just traditional compliance services. And you should be too… If you want to increase revenue and raise your profits, transitioning away from compliance services and making an authoritative move toward advisory services will cement your efforts.
With that in mind, here are the three most profitable accounting services in 2023:
Tax Planning
Sure, this may fall closer to the “compliance” side of accounting, but tax planning is a far cry from chasing after unwilling business owners who show up on your doorstep once a year. Tax planning services are on the rise, and for a good reason. The average business owner is getting smarter and wants to save on taxes without breaking the law. As a result, there’s a widening gap between public demand for tax compliance and proactive tax planning. You can fill that gap and elevate your accounting firm if you’re willing to…
Tax planning has significantly higher fees than compliance services, with an average fee of $2,351 per client. In comparison, tax preparation fees are five times lower on average. However, only 62% of tax firms surveyed get paid for those services, even though 74% deliver tax planning services. This gap represents a significant opportunity for accounting firms. You’re probably already doing some form of tax planning… now it’s time to get paid for it.
Business owners need someone to connect them with tax-saving strategies without putting their business in jeopardy. This is where tax planning and advisory services come in. And bonus, you don’t have to deal with stressful, last-minute clients come April.
Fractional CFO Services
COVID-19 forced many businesses to face the fact that many tasks can be done just as well virtually as they can in person. And so, fractional CFO services have become a viable, if not preferred, option for both small business owners and entrepreneurial accountants alike. The business owners get the expertise of a professional, qualified CFO, and firm owners have more flexibility with service delivery.
CFO services typically demand a higher rate than traditional tax filing, and they offer incredible freedom and flexibility over traditional accounting services. Cloud technology and online security options have made it possible for remote CFO positions to become a reality. Cloud-hosted solutions can reduce operating expenses by up to 50%, which is a significant advantage over traditional installed software. And, business owners that employed a CFO saw an average yearly revenue increase of 15%.
Offering fractional CFO services instantly positions you in an advisor role. When you can demonstrate to your clients that your services are valuable year-round, instead of just during tax season, your profits will follow grow and remain consistent all year long.
Advisory Services
As tax filing and bookkeeping become more and more automated, there’s less demand for basic accounting services and more demand for higher-level insight. Business owners want someone to act as a financial advisor, not just file their taxes. Advisory services reposition you from delivering a commodity to providing an irreplaceable source of fiscal advice. When you position yourself as an advisor, you can command premium pricing.
Advisory services are the only way to completely outpace automation. They provide an irreplaceable source of financial knowledge that cannot be replicated by machines. Delivering advisory services is the key to becoming an essential partner for business owners and commanding premium pricing for your services.
