5 minutes

Fight Inflation Through Tool Making

Fight inflation at your firm, and for your clients, by making (or mastering) tools. Tools are deflation oriented, they are that by their nature.
Written by
Roy Keely
Published on
January 24, 2024

Fight inflation at your firm, and for your clients, by making (or mastering) tools.

Tools are deflation oriented, they are that by their nature.

Hammer to Nail Gun

If you were a roofing company and went through such a change you would need less people to do the work thus reducing the cost of putting on a roof. This translates to;  1) Lowering the price so you can win more volume 2) Keeping the price at market/same thus increasing margin 3) creating optionality should market conditions change.

HOWEVER, a big however, many accounting firms have a hard time reducing clicks inside their traditional workflow because many of the tools are outdated and are not getting updated anytime soon. (CCH, TR, Intuit, blah blah).

People are masking the margin compression through trying bots and outsourcing which makes tons of sense. However, this is purely incremental gains to what could be had by a better set of tools.

What to do?

A new angle we are trying to take with our firm/parnters is to get to the revenue upstream via a SPECIFIC tool/s that fit their target client strategy. Ideally that tool is created BY the firm (or firms) for the specific vertical you are looking to expand your footprint in.

I am not talking about generic pre-accounting (although that is a great thing) but am talking about laser focused tech that blends the workflow b/w you and the client.

You and your _______ clients…vet, brewery, cost seg, risk, PE, construction, etc.

A few examples: (The current ones that come to mind I can’t share because they are in motion)

  • ProNovos is an FP&A tool for subcontractors. We participated in a seed round with other CPA firms that realize this is the right way to add value to their sub-contractor clients. They have an angle no other firm can take to market + able to offer more profitable advisory services + don’t send their teams senseless accounting tasks as the tool helps roll up commodity excel work.
  • Your brewery (or other clients w/ commodity inventories) clients have tons of agricultural commodities as inventory. Why not build a tool that talks to the GL that values their inventory monthly and adjusts their books/balance sheet accordingly? Better yet what formula show a company use to determine COGs when the prices of their ingredients are in constant flux? What price changes do your clients need to be aware of in real time in order to keep making the same product tomorrow at the same margins as today? Sell it as a QB add on or give it away to your clients only.
  • Build a data warehouse product for your Medical group clients that has APIs ready to go for all the core software in the space…anything that has greater than 20% market share. Offer it as a SaaS like product that then easily creates a ramp for PowerBI or Tableu work that is more of a leading indicator to their finance situation. This should be the face of your advisory offerings.
  • Build a QofE tool that integrates with the modern banking/revenue stack that allows you to shave time off of your processes that often take 300 hours at the worst time of year.  Use this new tool as a wedge into a customer segment that you only have a small % of share in but can see growing well into the future. Sell it as a service or a product with some creatiivity.
  • Front load this offering with serviecs that help your clients migrat to a modern finance + banking stack off of the traditional banks.

This list could be vast!  If you ask your typical 5+ year Tax/Audit person what ‘only if’ statements they have rolling around in their brain countless times a month you could fill up a binder.

If you are curious on how to build a tool/software from scratch for your firm and and getting it to market hit me up for a conversation. Link here to book a time in.

Austere de Facere. - To dare is to do!

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