The riches are in the niches for accountants and bookkeepers
I’ve been closely involved with the cloud accountants, bookkeepers and advisors community for nearly two decades. For many practices, the adoption of technology and automation of compliance has almost accidentally resulted in a significant increase in their client base. I recall about 18 months after I shifted from supporting desktop clients, to cloud based clients, my client base tripled. It was both an exciting and daunting realisation.To adapt to this evolution, practices are navigating their options, tinkering with their pricing model, exploring offering advisory services, and niching.The ABC’s of niches.A niche is a specialised segment of a market. Accountants and bookkeeping professionals can specialise in various types of niches, Industry, Category, Geography and even Personality. You may find similar personality types are prevalent in specific industries, but people do tell me they choose clients based on personality.One of the common mistakes made when talking about niching, is it is not restricted to simply one niche. You can niche or focus on more than one area. The recent black swan event of Covid19 negatively impacted some industries, more than others. By niching across different areas, you are spreading the risk, keeping it interesting, and benefiting from the positive impact of niching.
What niches are lucrative?
I think there are three massively untapped niching opportunities for accountants and bookkeepers: eCommerce, Inventory, and Payroll. I’m not saying these are the only ones out there. What I’m saying is there is a strong demand in those areas, and there are scarce resources servicing them, and businesses will pay for them. All three areas are complex and done correctly positively impact the businesses bottom line.
Specialising in eCommerce
eCommerce: Selling goods or services on the Internet across various platforms. I’m sure I’m not the only accountant who’s been asked to help a business reconcile their accounts from online sales and found it’s a hairball mess. The shopping cart doesn’t talk to the accounting solution. Colourful post-it notes scattered across the office are managing the inventory - but the website is alluring and makes customers want to open their wallet and buy! The neat thing about niching in eCommerce is that you can niche hard, go into digital products, or inventory such as electronics & Hi-Fi. The possibilities are endless and future ecommerce opportunities are flourishing.
Specialising in Inventory
Inventory Management: Sourcing, storing, selling, tracking, controlling, and reporting on businesses inventory. If you’re detail orientated, which for many bookkeepers is their superpower, then you could eat up Inventory Management for breakfast. Bookkeepers have told me they have increased their charge out rate 10-fold, after four months of focused upskilling in Inventory. There’s a whole chapter on Inventory Management in my book Xero for Dummies, if you are looking for where to start exploring this category.
Specialising in Payroll
Payroll Management: Rostering, timesheets, awards, processing wages and reporting on payroll. Payroll is a white knuckler when it comes to complexity. Every day there seems to be a new payroll update. Every other day there seems to be a business in the media called out for underpaying staff. If you love the ins and outs of payroll, consider enhancing your knowledge and undertaking further studies in this area. Also take the time to learn some of the payroll workforce solution platforms like MicroKeeper or Tanda.
Marketing benefits of niching.
When people understand and have confidence in what you do, they will refer work to you. You become the unique go-to expert because they know you’ll end up doing a better job than them - faster! Your extended network warmly introduces you to potential leads who could benefit from your services, reducing your marketing spend.Understanding your desired client, also means you can target your advertising spend.
Operational benefits of niching.
A clear understanding of your business's objectives simplifies decision making. For instance, when you’re contemplating where to invest your valuable time - you could try to learn a little of everything or learn a solution for a one-off implementation and/or keep ahead of all the technology, industry, and compliance changes. Or use your time to concentrate on areas that will help the business serve its target market.The return on training should improve, as you will hone-in on learning the areas you need to know. With a core bookkeeping stack in place: a receipt scanning solution (choose from Datamolino, Ezzybills, LightYear), Xero for accounting, and XBert for data accuracy and workflow management, you can spend time learning specialist solutions. You may even opt to work closely with one or two solutions, for example if you are looking at a payroll platform, you could focus your energies on.Every time you work with a client, you learn more from them about the language they use in their industry.Working within a niche leads to a deeper understanding of nuance, in turn the quality and efficiency of support offered excels exponentially. For example, when a client contacts you about an issue, you will know that experience of this issue is X, Y or Z and you can quickly handle the query. Every query does not lead to a black time-consuming hole killing your earning potential - like it seems to do when you explore a new solution!Finally, there are bottom line benefits from focusing on a niche. Because you’re bringing a wealth of knowledge of both numbers and the segment to the project you can increase your project rate. Once familiar with the solution, and with processes and procedures in place you’ll naturally streamline the work, reducing expenses. Plus, there are new customer referral income opportunities.If you’re a cloud accountant, bookkeeper or advisor and you’re feeling disrupted and know you need to do something but not sure exactly what - then maybe its worth considering niching in one of these three areas.
Heather Smith is a management and technology accountant, with a deep understanding of how Accounting Apps can be implemented and utilised effectively to improve workflow and surface information useful for telling the businesses story and for data driven decisions. She is the Host of ‘Cloud Stories’ podcast, Author of multiple Cloud Accounting books, and Editor of Accounting Apps newsletter
What is XBert?
XBert is an accounting software add-on dedicated to making work life easier for bookkeepers and accountants. With AI-audit, integrated with practice management solutions including task and process automation, templates, schedules and analytics and BI reports - it is a must-have app for those looking to find efficiencies and enhance their advisory services.