Why is financial benchmarking important to accountants?
Top-performing accounting firms earn 27.4% of their total revenue from auditing and advisory services. They make double the revenue, profit, and compensation per partner compared to the median of all firms. Their success is due, in part, to an in-depth understanding of their clients, made possible through financial analysis benchmarking.
Granular market and financial data provide accounting professionals with unparalleled insights. By using financial benchmarking software, firms can earn a reputation for giving sound financial and operational guidance. Discover the importance of financial benchmarking tools and how financial firms use them to optimize their approach.
1. Differentiate Your Firm
Many firms offer services that help their clients improve their business, enhance the quality of their lives, and build wealth. But the best accounting agencies stay vigilant of changing trends across their client’s industries and locations. They learn about their customers and use these insights to inform strategies.
Bizminer financial benchmarking software makes this possible by giving companies access to thousands of data points. The proprietary NAICS extended code system categorizes more than 9,000 industry segments, allowing you to analyze information at the zip code, city, county, and state levels.
By improving both the quality and scope of your services with financial benchmarking, you’re in a better position to help your clients to succeed and ultimately grow and retain business.
2. Become a Trusted Advisor
Consistent, accurate information is crucial to building relationships with clients. And confidence is hard to come by, with only 57% of respondents to a Forrester survey expressing trust in financial services. It’s called a “trust gap,” and Wes Bricker, PwC’s vice chair, US Trust Solutions co-leader, told the Journal of Accountancy that it “can have a negative impact on a company’s bottom line.”
You can avoid missteps by only using reliable data. Doing so ensures you give clients the most precise information, reducing reputational risk. For more than 20 years, accounting professionals, taxing agencies, and major banks have relied on Bizminer data.
Indeed, the International Business Brokers Association (IBBA) partners with Bizminer exclusively for its financial and industry market data. The information comes from highly trusted public and private statistical sources, offering unmatched specificity and reliability.
3. Build Strategic Partnerships
The right partnerships help you build client loyalty while broadening your professional network. They add value to your firm, allowing you to stay competitive and grow while continually supporting client needs. However, making an informed decision based on verifiable data is vital.
Before considering a strategic partnership, use Bizminer to view company profiles and ensure a good fit. Bizminer’s research tool has more than 5,000 filtering options to create a goal-specific static report based on market, industry, and size. In addition, financial analysis benchmarking software lets you filter possible partners according to revenue, employee count, valuation, and more.
4. Explore Opportunities and Mitigate Risk
Risky business moves and inefficient operations impact revenue. For your firm to become and remain a leader, it must reduce threats to profitability. Financial benchmarks and reports help you analyze risks alongside opportunities. By continually assessing your firm, partners, and prospects, you can determine when and how to expand operations.
Bizminer collects and frequently updates information from more than 18 million business operations. It pulls raw data points from diverse, reliable sources into the platform, where you can create profiles and reports with 61 financial ratios. Use these insights to elevate your benchmarking financial analysis and audit and assurance processes.
Tips for Accountants Looking to Improve Their Financial Benchmarking
The benefits of financial benchmarking are vast. Yet unreliable or inaccurate data sources cause your trustworthiness to plunge. Choosing the right data provider can increase your firm’s revenue and reputation, opening the door to countless opportunities. Evaluate your existing tools and processes, then consider alternatives that enhance your capabilities.
1. Be Proactive
A stagnant approach isn’t an option for companies wanting to increase revenue. Nor is reacting to market changes as they happen. Instead, work with a data provider that updates information regularly and provides tools to identify risks and opportunities.
Take advantage of Bizminer tools by personalizing report parameters for custom insights. Bizminer offers industry market trends and financial analysis benchmarks for more than 5,000 lines of business. By analyzing sales trends and local financial data, you can anticipate your client’s needs and help them deploy effective strategies.
2. Focus on Accuracy
Accounting professionals understand the importance of accurate data, especially when it comes to litigation, audits, and business valuation. Unfortunately, many errors occur with manual data entry and benchmarking processes.
Ensure precision with the most accurate analysis available on the market. Bizminer uses raw data sources, including public, private, and metadata. Altogether, the tool accesses over a billion sourced data points. Its remarkable accuracy is why state, provincial, and national taxing agencies in Canada and the US use Bizminer data.
3. Look for Patterns
Understanding trends and identifying patterns enable you to better serve your clients. But this requires large data sets, which can be challenging to break down and analyze. Bizminer products help you recognize patterns of activity through significant-sized samples. It collects granular financial and market data from diverse, verifiable sources so you can develop insights for your clients.
Use Bizminer tools to forecast market share and product viability while discovering emerging trends related to your client’s location or industry. Bizminer provides an excellent financial benchmark example for exploring report options and tools before scheduling a demo. You can create a custom report to demonstrate patterns over time and make predictions.
4. Use the Best Data Available
High-quality data and strict quality controls protect your firm’s reputation. Bizminer specializes in granularity and depth. It uses reliable datasets to improve consistency and takes measures to reduce year-to-year variances and maintain data integrity. For instance, Bizminer completed a normalization process after finding significant swings in the base data for subjective allocation choices.
In doing so, Bizminer was able to produce a common size P&L. By tightening its outlier parameters and narrowing filters, Bizminer increased the stability of displayed values and changes numbers.
5. Integrate Benchmarking Into Your Existing Processes
Eliminate task switching and improve speed and efficacy by incorporating financial benchmarking software into your workflows. Bizminer provides an application programming interface (API) to pull data into your customer relationship management (CRM) program or proprietary software. These software integrations help you scale operations, automate decision-making, and understand your clients better.
Use Financial Benchmarking Software to Drive Revenue
Financial benchmarking tools can save your company time, money, and resources. Bizminer is your trusted source of information, offering reliable data and a user-friendly platform. Leverage Bizminer to increase your firm’s profitability by improving financial performance and proactively acting on new opportunities. Learn how to boost your revenue by creating a Bizminer account and building your report today.