Are compliance services dead?

I’ve been doing a lot of travelling around Australia over the last few weeks for a client and have managed to catch up with some new & interesting people. During my travels I had lunch with a nice young chap who was working in a small accounting practice. It was himself working with two other more senior accountants.

Whilst we were munching on our salad I asked my friend how many clients his firm had. With great pride and gusto he said 7,500. That’s right you read it correctly – 7,500! He then went on with great pride to tell me that the systems & processes within their firm were top notch and that they give H&R Block a run for their money in processing tax returns.  The last comment was shared in the spirit of it being a thing of great beauty & virtue.

I was too polite (or gutless) to point out to my friend that his firm was on the wrong track and they would be working themselves into the ground providing a commodity (i.e. compliance services) that clients see very little value in and resent paying for. Does that sound too harsh? I’m sorry if it does but that is the cold hard truth.

Now I know you have heard for many years that compliance is dying and that it will go away and guess what it is till around. However, in the last couple of years in particular two big things have happened:

  1. The acceptance of the “cloud” by many businesses including government departments and the big end of town.
  2. The surge in the use of outsourced services as indicated by the popularity of sites such as odesk, elance & freelancer. These sites have a created a global market for anyone to buy services ranging from bookkeeping up to network administration.

Please tune into the next two posts where I’ll be unpacking the above two big things!

See you next time.

James E