For solo CPAs and small accounting firms, diversifying your service offerings is more than a strategy—it’s a necessity for long-term success. From quarterly estimated tax planning to equity compensation and crypto tax planning, diversifying your service offerings can not only set you apart from the competition, it can also help you significantly grow your revenue and retain clients.
In this comprehensive guide from Harness Tax, we explore actionable strategies to help solo CPAs, former Big 4 accountants, breakaways from large tax firms, and growing accounting firms diversify their service offerings, build better client relationships, and run a modern, scalable tax practice.
Table of Contents
- The Importance of Diversification in Accounting
- Identifying the Right Time to Diversify
- Common Pitfalls and How to Avoid Them
- Potential New Services to Offer
- Launching Your New Services Successfully
- Harness Tax: Your Partner in Growth
The Importance of Diversification in Accounting
Gone are the days of clients needing nothing more than one-off annual tax filings. Clients are now expecting more of their accountants, and for CPAs to stay relevant, it’s more important than ever to diversify the service offerings of your accounting firm. According to CPA.com, 54% of accounting clients “reported that they now purchased accounting services in bundles or packages”. This shift toward bundled services and expanded service offerings beyond just one core area is something that we are continuing to see in the rapidly evolving tax industry.
“I really enjoy helping my clients with their equity questions and creating a personalized tax plan. It’s important to ensure they’re equipped with all the information they need to make choices that support their future goals.”
– Kelley Maddox, CPA and Harness Tax Advisor
Identifying the Right Time to Diversify
Timing is everything, especially when it comes to expanding the service offerings of your accounting firm. You can start by looking for financial indicators, such as a lack of consistent revenue, or you can look at anecdotal signs, such as clients simply asking about different services in your interactions with them.
Here are a few other signs that you might want to consider before introducing new services:
- Increased client demand: The most obvious signal that you’re ready to expand your service offerings is that your clients, or prospective clients, are asking for services that you typically don’t offer.
- Scope creep: Similar to the above, if you find yourself consistently working on tasks that are outside of what your clients specifically hired you for, it might be time to formalize a new service offering.
- Specialization: Many accounting professionals have some area of expertise that sets them apart from the competition, and if you aren’t leveraging your unique skill set, you should be. In the same report on CPA.com, 27% of respondents said that they would prefer to work with accountants who specialize in the same industry that they work in. For example, if you bring expertise in equity compensation tax planning, but don’t yet have any clients in that area, that would be a prime opportunity to expand your service offerings into that new area.
Common Pitfalls and How to Avoid Them
With any major change to a business, it’s important to be considerate of how expanding your service offerings could potentially impact your day-to-day operations. Expand too fast, and you might find yourself overwhelmed and unable to adequately handle your work. Expand too slowly, and you might feel that effort has been wasted. To mitigate these risks, consider a phased approach to rolling out new service, and closely monitor client feedback and operational metrics along the way.
Potential New Services to Offer
The services you choose to add to your accounting firm should feel like natural fits based on your background and skillset, as well as based on your ideal client. While there is no one-size-fits-all list of options to consider, here are a few to explore:
- Equity Compensation Tax Planning: As the IPO markets pick back up again, and startups continue to grow, equity tax planning can be a particularly lucrative niche, and can offer a strong hook to long-term comprehensive tax planning.
- Bookkeeping: If your clients are self-employed or small business owners, offering bookkeeping services can be a logical way to get more connected to their tax obligations, and can lead to your ability to offer more tailored advice throughout the year.
- Quarterly Estimated Tax Planning: Similar to bookkeeping, quarterly tax planning can be a necessity for your clients who are self-employed or small business owners, and can provide a foundation for more consistent revenues throughout the year.
- Crypto Tax Preparation: Crypto taxes are highly complex and still in their relative infancy, making this a great opportunity to offer specialized accounting services if you bring the skillset and background necessary.
- Comprehensive Tax Planning: Beyond equity compensation and complex investments, other life events can also present tax planning requirements, and you should be able to offer your support during these periods. From buying a home to having a child or planning for retirement, helping your clients plan for the long term can prove incredibly valuable for you and your accounting firm.
Launching Your New Services Successfully
Implementing new services in your accounting firm is no small feat–it’s a multi-faceted process that requires careful planning and execution. Once you’ve decided to roll out a new service offering, take a few steps back to carefully consider the changes you’ll need to make within your firm.
- Software Integration: Adding a new service might require updates or changes to your existing software systems. Make sure that any changes needed are made within your accounting practice management software or other platforms prior to onboarding new clients, in order to prevent issues down the line.
- Client Communication: Create an effective communication and onboarding process for clients who are interested in your new services. This could include email templates, updated intake and account management forms, and other materials to ensure you are prepared from day one.
- Sales and Marketing: You’ll also need to update your sales and marketing strategy before rolling out your new service offerings. This could include promotional materials but also criteria for what to look for in potential clients, and which sales and marketing channels you might leverage.
By following these above steps and taking a calculated approach to your service expansion, you’ll be better positioned to launch your new services successfully and be fully prepared to take on new clients without any steps unaccounted for.
Harness Tax: Your Partner in Growth
Growing your accounting practice is a lot more cumbersome than it may seem, and that’s where Harness Tax comes in.
Harness Tax is a holistic solution designed to help solo CPAs, small accounting firms, former Big 4, and other breakaway accountants run a modern practice, and it can be a powerful tool for those looking to scale their accounting practices. Through our marketplace and lead generation offerings, as well as our in-house operational and administrative support staff, Harness Tax can help you grow your accounting firm and introduce new service offerings.
Here’s more of what Harness Tax offers:
- A modern software suite: Harness Tax provides you with access to an industry-leading software suite to ensure you have the tools for everything you need, from annual tax filings to compliance tax planning.
- Operational and administrative support: Our in-house team is there to support you with ongoing needs, from coordinating client services to e-filing tax returns, and other administrative tasks.
- Lead generation: Our marketing team works to drive prospective clients to the Harness website through digital marketing channels, and our Concierge team then works to match leads with your firm, schedule meetings, and help you manage the sales process.
- A community of experts: Lastly, joining Harness Tax allows you to connect with a network of accounting professionals around the country. From roundtable discussions to lunch-and-learns on popular tax topics, you can share best practices and get the support of a large firm while maintaining your own practice.
If you’re a solo CPA or small accounting firm owner looking to diversify your service offerings and scale your business, consider joining Harness Tax. Schedule a call with our team today to find out how we can help you grow your accounting firm.
