The Rise Of Millennial Clients And Its Impact On The Accounting Industry
This generation is continuously adapting to the changes in the accounting landscape. The evolving workforce and increasing number of technology-related jobs have made this breed of professionals a potentially profitable market.
Millennials offer an enticing opportunity as prospective clients. In fact, many of them run companies that are making decent amount of revenue. The growth potential of these companies can contribute to the profitability of your firm.
Millennial Clients Are Growing
Millennial entrepreneurs are growing, according to data from the 2017 Millennial Business Owner-Accounting Firm Survey by website Bill.com, which polled more than 1,000 business owners.
- One-third of millennial business owners run companies with $1.1 million to more than $25 million in profits every year
- 16% own companies that earn between $501,000 to $1 million a year
- 14% of business owners aged 39 and below lead companies that have more than 51 employees
- 12% of the participants own companies that have 21 to 50 employees
Millennial Clients Find Accountants In Various Ways
Millennial clients mostly rely on word-of-mouth when it comes to finding the right accounting partners. But they use a varied mix of tools when looking for accountants to help them figure out their taxes.
Business owners aged below 30 have diverse information resources:
- Friends, family and peers (64%)
- Advertising (18%)
- Internet searches (23%)
- Referrals from technology partners (14%)
What do these mean? Accounting firms need to implement a variety of ways to market their services. To find clients, accounting firms need to, first and foremost, establish their reputation and then explore partnerships and referral opportunities.
Understanding What Motivates Millennial Clients
To attract clients, firms need to understand what motivates millennials.
Based on the 2017 Millennial Study conducted by Deloitte, millennials appreciate straight-talking language and passion. Companies that have an inclusive approach are more likely to retain people, which can also apply to keeping clients.
How do you keep clients? Read this.
This echoes what experts say about being more proactive with clients. The Outsourced Accountant’s Founder and Chairman, Nick Sinclair, encourages accountants to adapt a more proactive role to become the trusted advisor.
Watch: Be a proactive accountant
Adapting habits like picking up the phone to ring clients regularly can do a lot in establishing trust. The same goes with implementing communication rhythms within the firm. When team members are able to communicate effectively, they will be able to deliver quality work. Furthermore, teams that can communicate well with each other will be able to communicate well with clients.
Millennials are expected to make more in the coming decades and are more motivated by gaining experience and not too much by wealth accumulation. This is rooted from a perspective that life should be centered around gaining experiences, which explains why many plan to work for various employers over their lifetimes or become business owners.
Preference For Paperless Accounting
Accountants are highly encouraged to embrace technology to better serve their clients. It also helps meet client expectations. Data shows millennials prefer digital-only accounting (82% said they would be very pleased if their accounting firm has paperless services).
Millennial clients prefer paperless accounting for various reasons:
- Easy access to real-time data
- Convenience in searching, filing and sharing documents
- Reduced costs on office space
- Paperless accounting is good for the environment
Going paperless has a positive response from the respondents:
- Clients aged 31 to 39 indicated positive responses of 78% while those aged 40 to 55 were at 66%
- 45% of business owners aged 56 and above approve of paperless accounting
- However, 20% of those older business owners are uncomfortable with the idea
When it comes to the services offered, a large number of millennial clients incorporate recommendations on accounting technology (24%) and training (23%), a significant difference from those aged 40 to 55 (16%) and 56 years and above (8%).
Frustrations Encountered By Millennial Clients
Naturally, being known for their preference for straight talk, millennials will not have difficulties in expressing their frustrations in accounting, which include:
- Managing cash flow
This means one thing: millennial clients need strategic guidance.
52% of business owners aged 39 and below want firms that also offers strategic insight and guidance. They also want their accountants to be able to fully and plainly explain their finances to them. They want someone who can explain complex financial concepts into a language they can easily understand.
What they look for in an accounting firm:
- Prompt responses (72%)
- Offers strategic insight and guidance (52%)
- Can provide a wide range of tax, accounting and financial services (42%)
- Can clearly explain complex financial concepts (42%)
- Expert knowledge (36%)
- Engagement in local business community (20%)
- Can meet face-to-face when needed (17%)
- Offers low rates (15%)
- Among the top accounting firms (8%)
As the accounting industry continues to evolve, accountants need to identify and address emerging factors that impact their practice. The rise of millennial clients is an important issue that needs to be taken into consideration since these people are going to soon make up a bulk of accounting clients.
- Millennial clients are continuously growing
- Many of the new generation of clients run companies that yield high profits
- Clients mostly rely on word-of-mouth referrals when looking for accounting partners
- There are several factors that motivate millennial clients: open and straight communication and proactiveness
- Millennial clients expect accounting firms to provide more services, embrace technology, responds promptly and offer strategic insight and guidance
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