Orange County’s locally based accounting firms have been bolstering their new-business pitches with consulting services, but the industry’s return to a growth track appears likely to be incremental and largely tied to existing clients.
“No one that I talk to believes that the good old days of 2006 and 2007 are going to be repeated in 2013 and 2014,” said Bob Wright, managing partner for Irvine-based Wright Ford Young & Co. “We’re going to experience a much slower ease back.”
The biggest driver of new business for Wright Ford Young has been referrals from existing clients. The firm has also focused on building awareness for value-added services such as due diligence work, corporate structuring and advisory work.
“In a perfect world, clients know what you do,” Wright said. “But you have to really educate your client. You have to let them know that we do more than just prepare tax returns and financial statements. A client doesn’t always think of their CPA as their due diligence team or their advisor.”
Key Advantage
Most of Wright Ford Young and Co.’s clients are companies in the $15 million to $200 million range that are owned by entrepreneurs.
“That size of a business is great for us,” Wright said. “They don’t want to talk to a manager. They want to talk to a partner.”
Personalized attention is a recurring theme with smaller accounting firms, who have the ability to give priority to smaller clients that may be marginalized by large firms.
“Our main strategy is … attending to the needs of our existing clients,” said Thomas Champieux, a partner in the Orange-based Talley & Co.
Talley & Co. has about 40 employees and has a “fairly sophisticated practice for the size that we are,” Champieux said.
He added that the firm can “move a little quicker and make decisions on a more timely basis” than larger accounting firms.
The firm recently launched Group 11 Advisors, an affiliate company that allows clients to outsource their accounting and noncore administrative functions through a cloud-based, client delivery platform. Group 11 was developed after its network of bankers said the lending process was bottlenecked because of some smaller companies’ shoddy bookkeeping.
“We found not only did they need help with internal accounting but also their back office,” Champieux said. “We’ve adapted the program so clients receive a big bang on their dollar. As we relieve them of processes that they may not fully understand, they can focus on their business and focus on driving additional revenue and improving their operations. It has gotten a lot of traction.”
Niche services have proven an effective driver for winning new business for smaller accounting firms.
Santa Ana-based ELLS Certified Public Accountants and Business Advisors has tied consulting services to the Enterprise Zone tax credit program—which offers tax incentives tied to certain business locations—and areas such as cost segregation, international taxes and retirement security.
“We’re seeing growth again, and we’re hoping it continues,” said Ed Lieber, the firm’s president and managing partner.
Meantime, firms report a hangover from the recession involving clients seeking discounts on services.
“They’re asking for fee concessions and greater discounts than ever before, and we’ve accommodated them,” said Glenn Gelman, managing director for Santa Ana-based Glenn M. Gelman and Associates. “We’ve shared in their pain.”
New Niches
Gelman said his firm has added several new niches to find a better way to deliver more value to its clients, including enterprise-owned credits and research and development credits.
“We’ve branched out into providing these services that we weren’t experts in before,” he said.
Growth in certain industries has also been a boon to business for some firms.
Healthcare has been a bright spot in the Orange County economy and has proven to be a valuable niche for Tustin-based HMWC CPAs & Business Advisors.
The firm works with several physician practices and has focused on educating its clients amid healthcare-industry changes and consolidation.
“We made a conscious effort to develop a healthcare niche within our firm,” said Steve Williams, HMWC’s president and managing partner. “The niche has served us quite well, and we’re well-prepared to talk to our healthcare clients about the various opportunities that are out there. And now, with our client base, industry experience, and 20 years of knowledge, we’re working very proactively with medical practices.”
The firm also launched a program called Complete Financial Office Solutions for smaller companies that have cut back on personnel and are seeking to outsource their financial or accounting functions.
Looking ahead, firms expressed optimism that a rededication to new-business prospecting will sustain a slow but steady uptick in clients and revenue.
“We continue to grow,” Talley & Co.’s Champieux said. “We’re working a little harder to do it, but we’re continuing to grow. I would bet that most businesses feel the same way.”
