What millennials want (when choosing an accountant)
Today’s accounting practices have rocketed through major technological changes that shape how business is done. The makeup of accountants’ client bases has also shifted markedly.
In recent years, millennials have overtaken Gen X as the largest group in the workforce.
In my keynote address to open the Accounting Business Expo in Sydney this week, I emphasised that many millennials (those born between 1982 and 2004, also known as Gen Y) are now in their mid-30s. They are often business founders who know how to wrangle social media and cloud technologies to conquer their needs and bond with their clients.
Millennials reached adulthood smack-bang in the middle of the Global Financial Crisis. They saw how the dedicated worker’s future in a corporate career got disrupted so easily. This gave rise to entrepreneurship being a valid career choice.
Renowned demographer Bernard Salt once said millennials are more accurately dubbed ‘Generation E’ to match their entrepreneurial ways.
So, accountants need to know how the millennial business owners tick and run their businesses if accountants want their professional help to slot in nicely.
Business traits of Generation E
A study by Bentley University showed that two thirds of millennials want to call themselves a business owner, as opposed to 13 percent who hanker for a career in a large corporate environment.
As technology natives growing up with technological revolution as the norm, millennials don’t need to be convinced of the benefits of using technology to manage tasks in their businesses. For them, technology is not to be feared and they are willing to embrace – and pay – for solutions that demonstrate their capacity to make life easier.
For this generation, money is no longer the primary driver.
The ‘disloyal’ and ‘easily distracted’ traits are a myth. A study of millennial small business owners by Wells Fargo reveals committed business owners who:
- choose being their own boss as the reason for starting a business (82 percent)
- aim to grow their business and pass it down to their children (80 percent)
- are happy to remain small businesses if it provides their family with a comfortable future (59 percent)
The huge guiding factor is lifestyle balance and the flexibility of being their own boss.
What do millennials want from their accountant?
In a survey by Bill.com in the US, more than 1000 thousand business owners defined critical traits of an accounting firm. Interestingly, the answer isn’t technical proficiency.
The big hitters were:
- responds to my communications in a timely manner (72 percent)
- provides strategic insight and guidance for my business (52 percent)
- is versatile and able to give a wide range of accounting, tax and financial services (42 percent)
- translates complex financial concepts into terminology and reporting that I can understand (42 percent)
Surprising? Relationships mean more to these business owners. They crave a mentor, someone who is on their side, who cares as much about their business as they do, and who can advise them clearly and concisely.
As technology automates more of the basic tasks to complete accounts, millennials’ reliance on these relationships will get stronger. Accounting practices need to engage on their clients’ terms, through email and social media – the comfort zone for millennials.
Bill.com unearthed the specific services that millennials demand from their accountant. Start with these ones:
- Millennials are far more likely than older generations to be looking for a full-service offering, and the engagement will be paperless
- More of them say ‘yes please’ to outsourced bookkeeping, and want a broader set of advisory services such as CFO services, budgeting and forecasting
- They want prompt engagement with an advisor – this means fully digital, timely and continuous communication
Our own data, presented in the MYOB Business Monitor (December 2017), reveals the investment honey pots for millennial business owners and their unique pressure points.
These millennial business owners beat all other generations in their 2018 strategies to invest in the following areas:
- employee wages (31 percent)
- number of variety of products offered (31 percent)
- customer-retention strategies (27 percent)
- increasing the value of online marketing (27 percent)
- working with business advisors (26 percent)
- increasing the value of offline marketing (24 percent)
- number of full-time employees (19 percent)
Then there are the pain points that millennial business owners identified. These impacts are ‘extreme’ or ‘a lot’ – more than any other cohort:
- late payments from customers (40 percent)
- cash flow (36 percent)
- interest rates (33 percent)
- time spent meeting tax obligations (32 percent)
- retaining existing customers (31 percent)
- hardware or other equipment upgrades (27 percent)
- exchange rates (27 percent)
- IT software, systems or process upgrades (26 percent)
Most millennial business owners are committed and passionate. They lack the skills or desire to manage their bookwork alone. Instead, they’re looking for knowledgeable advisors who can offer a complete service and become a valued mentor to their business.
My top tips for working with millennials
- Communicate with them regularly and proactively
- Engage in their business as an ally, not a supplier
- Get social – play where they play (on social media)
- Don’t forget work–life balance trumps growth a lot of the time; that’s why they run their own show
- Make sure your service offering is broad enough to meet their needs