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Beyond efficiency: Using technology to ramp up a valuation business

Sageworks
April 16, 2015
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Brad Spence, Director of Sageworks Valuation SolutionBy Brad Spence, Director of Sageworks Valuation Solution

What drives new business for your valuation practice? Referrals? MarketingCross-selling current accounting clients?

How about technology? Is your firm using technology to drive new valuation engagements?

Many accounting firms view technology expenses as overhead – costs that chew up precious revenue dollars rather than bolster them. They may view successful technology integration solely as a way to assist the business rather than as a way propel it, according to recent research from Wolters Kluwer, CCH, a global information services and publishing company that works with tax and finance professionals. These firms, according to the Wolters Kluwer 2014 Accounting Firm Preparedness Survey, “view technology as a utility, a mechanism for greater day-to-day efficiency,” and they quantify the investment returns mostly in terms of “back-office” benefits, such as improved productivity and work quality.

But other firms view technology as much more. They view technology as a driver of their businesses – a way to increase new business, improve client satisfaction and profitability, according to the same survey. “For them, technology integration drives revenue and growth and creates a competitive advantage,” the report says. “Ultimately, those are the types of key performance indicators CEOs and partners covet when striving to advance the future of their business.”

More than three-quarters of accounting firms that described themselves as “very prepared” to address the most significant trends of the future believe technology will have a major impact on their ability to market the firm, prospect and win new clients, according to the survey. Only 37 percent of firms describing themselves as “less prepared” agreed on technology’s role related to business development.

The report said “very prepared” firms “are fixed in their belief that technology is the key to managing change and driving better business results. Accordingly, they report feeling very well-equipped to shoulder a future filled with changes in people, processes and technology.”

Unfortunately, only 18 percent of the firms surveyed reported feeling “very prepared.”  The remaining 82 percent of firms reported feeling less confident in their ability to master top trends.

These findings are consistent with some of the trends the Sageworks team has identified in speaking with financial professionals daily. Valuation professionals who are focused on ramping up their valuation businesses are embracing technology as a means of enhancing communication with prospects and clients, in addition to as a means of boosting productivity.

For example, a partner with a growing valuation business at Brickley DeLong, a public accounting and business consulting firm with clients throughout West Michigan, uses an automated valuation solution to walk prospects through how the engagement will proceed. Valuations and the process of providing valuations are complicated and, as a result, expensive. Most clients have never had a valuation performed for their business, so they often have questions about how the process works, why certain information is required and why the engagement costs what it does.

Technology can be an aid in answering these questions for prospects and winning the engagement, says partner Thomas E. Vereecke, CPA. He signs in to the web-based Sageworks Valuation Solution to show prospective clients all of the steps that valuation professionals go through in the valuation, helping them to understand how and why the job is billed the way it is. “People get a better feel for something they’ve never had exposure to,” Vereecke says. “It’s a really nice selling point.”

Technology can also automate many of the routine-but-time-consuming steps of an engagement, such as business-valuation report writing, so partners can more effectively use their time. This is time that can be used for applying analytical skills and professional judgment to a larger number of projects or for cultivating new business.

Vereecke estimates that after using the Sageworks solution on just four jobs, his firm is cutting project time by as much as 25 percent and boosting realization rates.

Accountants who plan to build their valuation practice should consider how they are viewing technology. Is the integration of technology simply a way to remain efficient, or will it help the firm generate new business and have the time to serve those clients?

For more information on the best practices for building a valuation practice that satisfies clients and is financially rewarding, download the free whitepaper, “How to build a valuation practice within your accounting firm.”

 

Sageworks Valuation Solution
Sageworks Valuation Solution is a web-based, business valuation solution that helps firms streamline workflow, scale existing processes and increase realization rates. Explore features and benefits by watching a one-minute walkthrough video.

About the Author

Sageworks

Raleigh, N.C.-based Sageworks, a leading provider of lending, credit risk, and portfolio risk software that enables banks and credit unions to efficiently grow and improve the borrower experience, was founded in 1998. Using its platform, Sageworks analyzed over 11.5 million loans, aggregated the corresponding loan data, and created the largest

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