How to Scale Audit, Tax & Advisory Firms in a Changing Market?

Audit, Tax, and Advisory firms are evolving due to changing client expectations, technological advancements, and regulatory shifts. Over the past five years, private equity investment in the industry has surged, driven by the sector’s reliable revenue streams, skilled professionals, and growth opportunities through consolidation and innovation.

Private Equity’s Impact on Firm Growth

The majority of the top 30 accounting firms, excluding the Big Four (Deloitte, EY, PWC, and KPMG), have attracted investor funding (see chart). To meet investor revenue targets, these firms are aggressively pursuing growth via acquisitions. Notable firms such as Citrin Cooperman, Eisner Amper, and Cherry Bekaert, which secured investments in 2021 and 2022, have completed over 20 acquisitions each in recent years to exceed investor expectations. However, the push for revenue growth is not exclusive to private equity-funded firms. Even the Big Four and other firms are still determining the best strategies to boost revenue. Same can be understood from below:

The Need for a Strong Growth Strategy

As private equity-backed firms drive inorganic growth through acquisitions, other firms are realizing the importance of a strong growth strategy and a well-crafted go-to-market (GTM) plan. Often overlooked, a robust GTM strategy can make all the difference. Idea Innovate Consulting has developed a framework specifically tailored to professional services firms to help them execute a successful GTM strategy.

Identifying the Right Leadership for Revenue Growth

The most critical element of the growth strategy is identifying a C-suite executive, potentially a Chief Revenue or Chief Growth Officer, who is responsible for the firm’s revenue growth, with all the firm’s sales professionals, such as the Partners, Principals, Managing Directors (PPMDs), and the Business Development team, reporting to him or her for their selling activities. An accounting firm also has the opportunity to leverage Artificial Intelligence for generating and qualifying leads, leveraging social capital to drive new business, and creating personalized content at scale. Additionally, firms can collaborate with third-party service providers to generate business leads.

Three Key Elements of a Go-To-Market Strategy

Who: Identifying the Right Market Segment

The firm must first identify the target market segment, which could be based on geography, product, or industry. They need to understand the needs, competitive landscape, and service demands of this segment. It’s critical to assess whether targeting this segment can help the firm achieve its revenue goals.

What: Tailoring Offerings to Client Needs

Based on the identified market segment, the firm must determine which products and services it will offer. It may need to build new capabilities or form strategic alliances to offer additional services. Many firms are expanding their offerings to include recurring revenue services like outsourced accounting, managed technology help desks, managed security services, fractional C-suite talent, and data analytics.

How: Crafting the Perfect Go-To-Market Approach

The core of the GTM strategy lies in the approach to market, organizational structure, client acquisition, and project delivery.

• Strategy: Defining the revenue model, budget, pricing, and branding, followed by optimizing pricing strategies through methods like value-based or hybrid pricing.
• Organization Structure: Aligning the firm's sales, business development, and marketing teams with the overall strategy and clearly outlining roles and responsibilities. Sales and client-facing professionals must be trained to effectively cross-sell.
• Process: Establishing standardized processes for lead management, CRM updates, and account-based marketing. Streamlining client onboarding and project delivery processes while creating a feedback loop for continuous improvement.
• Messaging: Communicating the firm’s unique value proposition using targeted content and channels. Tailoring the message to address specific client needs and demonstrating the firm’s ability to solve problems.
• Support: Providing sales training, high-quality marketing content, and tools to support lead nurturing and deal closures. Strong alignment between client-facing teams and support staff will enhance engagement and conversions.
• Business Operations: Leveraging technology to monitor key performance indicators (KPIs) such as customer acquisition cost (CAC), lifetime value (LTV), and return on investment (ROI). Tracking sales effectiveness and marketing ROI will ensure the firm’s GTM efforts are optimized.

The Importance of Cross-Selling Services

A critical success factor for firms is the ability of professionals to sell and cross-sell services. This skill is particularly important in Audit and Tax, where a significant portion of the work is becoming automated and offshored. Firms must also revise their incentive structures to promote cross-selling. Many private equity-funded firms, like Cherry Bekaert and Eisner Amper, which initially relied on third-party offshore providers, are now setting up their offshore operations to increase the volume of offshored work.

Overcoming Challenges in Audit Revenue Expansion

Audit professionals face specific challenges when expanding revenue streams. Due to regulatory restrictions and the need to maintain audit independence, they are limited in their ability to cross-sell additional services to clients. Innovative strategies and collaboration across service lines are essential to unlock growth opportunities while maintaining audit integrity. In contrast, Tax and Advisory services sales professionals have more flexibility to leverage client relationships and cross-sell additional firm capabilities.

Seizing Opportunities for Growth in a Changing Market

The Audit, Tax, and Advisory market is rapidly changing. Firms that execute a comprehensive GTM strategy early on can capture significant market share, build lasting client relationships, and achieve sustainable revenue growth. Firms that lag may risk losing their competitive edge. Unlock exclusive insights, expert opinions, and the latest industry trends—straight to your inbox. Subscribe today and stay informed!