Lynda Steffens explains why the accounting industry faces a ‘Kodak moment’, including why and how accountants can stay relevant by embracing advisory services.
Why did you become an accountant?
Did you just know you’re naturally good with numbers? Maybe it’s in your family? Or was it because you like solving business problems?
Whatever your reason for becoming an accountant, the truth is that the role of the accountant in modern-day business is changing—rapidly.
Do you remember Kodak?
Kodak was the biggest name in photography for more than 100 years until they went bankrupt in 2012. In 1976, they dominated the market share in cameras and film. Everyone knew Kodak. ’Kodak moments’ became synonymous with capturing memories on your Kodak camera.
But around 2002, sales of film were declining with the increasing popularity of digital cameras. The problem wasn’t that Kodak didn’t sell digital cameras; they actually patented the first digital camera invented in 1975. They had the thing!
No, the problem was that they remained so focused on their core business of film and processing, they didn’t acknowledge the massive value they could gain by focusing on growing their business with digital cameras.
You know the rest of the story. In the end, what they did best was no longer needed.
Kodak saw it coming, but they were so stuck being experts in film and processing that they just let the competition become way more relevant to their target market.
A Kodak moment in accounting
You might not like to hear this, but a Kodak story is happening in the accounting industry:
Once healthy margins are eroding.
Clients don’t value what you do for them because they don’t differentiate one accountant from another for compliance.
Your clients seek advice from coaches and business strategists who don’t have the expertise or the knowledge to understand the financial impact of their strategies.
It's time to break the mould of the traditional accountant's approach to working with clients.
The changing landscape of accounting
The accounting profession has long been viewed as the backbone of financial stability in businesses. Accountants have traditionally focused on compliance, ensuring that businesses meet their legal obligations in terms of taxes, financial reporting, and auditing.
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However, the landscape is shifting dramatically.
Technological advancements, such as artificial intelligence and automation, are taking over many of the routine tasks that accountants used to perform. Software can now handle bookkeeping, tax calculations, and even financial analysis with incredible speed and accuracy. This technological disruption is both a challenge and an opportunity for accountants.
The challenge lies in the fact that many of the services that accountants used to charge for are becoming commoditized. Clients can now access these services at a fraction of the cost, often through self-service platforms. This commoditization is driving down prices and squeezing profit margins.
Clients are increasingly looking for strategic advice that goes beyond the numbers. They want accountants who can help them understand what the numbers mean for their business and how they can use that information to make better decisions.
They want help with business planning, growth strategies, risk management, and financial forecasting.
This is where accountants can truly add value.
By stepping into the role of a strategic advisor, you can help your clients navigate the complexities of running a business. You can offer insights that go beyond compliance, providing them with the guidance they need to achieve their business goals.
The call to action for accountants
It’s clear that the traditional compliance-focused accounting model is no longer enough. To remain relevant and valuable to your clients, you need to embrace the role of a strategic advisor.
This means developing new skills, adopting a proactive approach, and building strong relationships with your clients.
Remember:
Fewer and fewer clients will come to you if they don’t see you as more than just a compliance officer.
Clients want more than just compliance; they want strategic solutions for their business—from you, their accountant
If they don’t get it from you, they will find another accountant or professional (often a business coach) who can or looks like they can.
Becoming an indispensable advisor
As an accountant coach, my specialty is helping accountants make the shift into advisory services. Not advisory as ad hoc. I’m talking about how to get your clients to take up business improvement advisory services as an essential and with regular commitment on top of their compliance.
It doesn’t depend on a new software solution (as amazing as that is). It doesn’t depend on a stand-alone fee structure. It only depends on YOU and a repeatable advisory process.
What does this look like in practice?
Developing a strategic mindset To start, you need to cultivate a strategic mindset. This means looking at your clients' businesses holistically, understanding their goals, challenges, and opportunities. It involves moving beyond the numbers to provide actionable insights that drive business growth.
Building strong client relationships Strong relationships are the foundation of effective advisory services. This means taking the time to understand your clients’ needs and building client trust through consistent, reliable, and insightful advice. It’s about becoming a partner in their success.
Implementing a repeatable advisory process Having a structured, repeatable process for delivering advisory services ensures consistency and scalability. This includes defining your advisory services, developing a clear process for delivering these services, and continuously refining your approach based on client feedback and results.
Where to next?
The accounting industry is at a crossroads. The traditional compliance-focused model is becoming less relevant, while the demand for strategic advisory services is growing. This is your opportunity to evolve, to become more than just a functional service provider, and to become an indispensable advisor to your clients.
If you want to be more than just functional and become vital to your clients, then you’re in the right place. Together, we can ensure that your future is not only secure but thriving in an evolving industry.
Ready to make the shift? Let's transform your practice and keep you at the forefront of the accounting industry. For more information check out our website The Small Business Project.
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Lynda Steffens is an accountant, author and introvert—three things she is very loud and proud about. Founder of The Small Business Project, author of Accounting Revolution, and with 30+ years of industry experience, Lynda is transforming the way accountants connect with clients. She developed her advisory training as a result of seeing her peers overwhelmed, undervalued, and simply burned out. The Small Business Project supports accountants in building the confidence and capabilities they need to lead successful advisory first practices.
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