What started as an industry focused on providing accounting services to clients, CPA firms have evolved their offerings to include financial planning, management consulting, corporate governance, and IT. With the digital transformation driving the adoption of cloud technology, end-user spending on public cloud services is expected to reach $411 billion in 2022. This growth presents a significant opportunity for CPA firms already offering critical business consulting services to their clients. By leveraging their knowledge and expertise from their internal digital transformation, CPA firms can incorporate cloud consulting into those services, providing additional value to clients and create a new revenue stream.
Transform their clients.
When the pandemic forced the world into a virtual setting, most companies had no choice but to migrate to the cloud and establish their modern workplaces. Many were unfamiliar with the solutions and relied heavily on their business advisors for guidance. And while this event accelerated the digital transformation, there is still a significant amount of companies that have not adopted cloud technology. Migrating to the cloud is essential for those companies to succeed in the new hybrid workplace. Companies that have migrated to the cloud must now enhance their environments with the correct capabilities, permissions, and configurations. They will rely on their solution provider to ensure they select the right products, deploy the technology correctly, and appropriately configure capabilities. CPA firms that have migrated their practice to the cloud can utilize their knowledge and expertise to enable their clients with the technology. By offering cloud consulting services, CPA firms can establish their clients' modern workplaces and transform their businesses, empowering their success in the new hybrid landscape.
Create a new revenue stream.
Incorporating cloud consulting services into their business model unlocks an additional revenue stream for CPA firms. The sell-through model of cloud licenses means the CPA purchases the product from a distributor and re-sells it to the client earning a margin from each license. Each time the client adds a new user or increases usage, the CPA automatically earns more revenue. And because the licenses bill monthly, the CPA has a reliable source of monthly income, allowing them to forecast and plan effectively. Choosing to work with a distributor that offers purchasing, provisioning, and billing automation across all clients and vendors further streamlines the processes, reducing the need for costly back-office operations. Cloud technology also requires many associated services with margins of up to 20%, providing opportunities for lucrative client projects. By integrating cloud consulting into their solutions offering, CPA firms will create a new recurring revenue stream and exceptional growth potential.
Become a trusted advisor.
While acquiring new clients is essential for growing your business, maintaining and expanding your current account base is critical. By providing clients additional services,
CPA firms increase the value they provide, making it less likely that clients will leave for a competitor. CPAs will further integrate into their clients' organizations by adding cloud consulting services that impact most departments, providing a comprehensive solution package. As they become more involved with their client's business, they will develop a dynamic relationship critical to key business decisions. Eventually, the CPA will become a trusted business partner, helping build strategies and initiatives throughout the company.
With the cloud services market expected to reach $1,620,597 million by 2030, it is not just where we work that is changing, but also how we work. The automation and innovation provided through cloud technology will impact business operations and individual roles. CPA firms that use the expertise gained from their internal cloud migration to incorporate cloud consulting services into their offerings will be at the forefront of this evolution and lead their clients' digital transformation. The addition will allow the CPA firm to adapt, maintain relevance, and gain new revenue, empowering its success in the changing industry.
Senior Vice President of Corporate Development at Pax8
Jefferson (J) Keith brings over 20 years of financial management experience to Pax8. As Senior Vice President of Corporate Development, he leads the global expansion initiative through Merger and Acquisition activities, collaborative partnerships, and entrance into new channels. J has been with the company since its launch in 2013, driving strategic programs to enable the company’s growth, scale, and impact. J is passionate about cloud technology and has spent the last few years redefining technology advisory services at Pax8. His innovative approach and the simplicity of cloud technology enable business advisors to become a single source of cloud consumption for clients while driving their digital transformation.
J joined Arthur Andersen after graduation from the University of Colorado, Denver, with a Bachelor of Sciences degree in Accounting. He has held senior accounting and finance management positions with several companies, including First Data, MX Logic, and McAfee. J serves as a Treasurer for Denver’s City Park Jazz and enjoys escaping to his art studio to paint.