Well traditionally, accounting firms have been set-up by some practising accountants coming together and pooling in their clients to have a sizable client base and revenue.
This practice, had helped formation of accounting firms from practising accountants. Some of the firms came together, merged into a larger practice and grew across the globe. These firms are known as the Big 4s today. Big4 firms, today have the largest market share, when it comes to providing Audit and Tax services.
Post establishing their global presence, Big4s started consolidating their operations, making themselves streamlined and establishing shared service centres. These shared services centres, carry out bulk of their operations for various profit centres globally.
The shared service centres are taking care of executing laborious and time consuming work, while the client facing team focusses on value added advisory services.
How do small accounting firms and individual accountants fare?
While most of the small accounting firms have been able to develop good client based, based on their relationship, they tend to spend too much time in maintaining their existing client base.
When the client grows bigger, and steps out for its international foray, the client tends to opt for a Big 4 accounting firm, given the advantage of having a single firm to audit their books globally.
Whereas small and individual accountants, tend to have a smaller client base, with small accounts and almost similar services round the year.
So how do you turn things around?
Focus on niche services
Start advising clients on regulations
Offload your non core work to outsourcing agencies
Develop and own shared service centres (Look at it as a new business avenue)