Accounting firms’ clients often need help staying current with their ongoing small business compliance requirements. With states imposing different renewal schedules, filing due dates, and change-management rules, it’s challenging to track upcoming tasks and deadlines. And for clients with entities in multiple states, things become especially difficult. This opens an ideal revenue opportunity for accounting firms. By expanding their client advisory services to include compliance monitoring and filing services (such as annual reports, business license renewals, foreign qualifications, and amendments), they can strengthen customer loyalty and build a more consistent year-round income stream. To take advantage of this opportunity and help clients address the complexity of keeping their entities compliant, leading firms are implementing centralized systems, automated workflows, and ongoing compliance monitoring.
How to Successfully Incorporate Entity Compliance Services Into Your Existing Service Offering
Below are effective systems and workflows firms find helpful when assisting businesses in establishing and maintaining their legal entities.
1. Centralized Entity Management System
A centralized platform housing clients’ vital information makes providing compliance services infinitely more streamlined and efficient. Key details that firms should know include:
- Entity type and formation information
- All domestic and foreign state registrations
- Officers, directors, ownership, and registered agent data
- Historical filings and compliance status
With a single source of truth to rely on rather than turning to spreadsheets and siloed systems, firms can avoid overwhelming their staff members and increasing the risk of important filings falling through the cracks. Finding a dedicated compliance partner with an established system for documenting the required information helps to maintain authoritative, state-validated entity records—ensuring accuracy across all jurisdictions.
2. Automated Compliance Calendars and Deadline Tracking
Business owners often find it confusing and time-consuming to track their own compliance obligations. Requirements and due dates vary by state, and clients with entities in multiple states may have anywhere from 10 to more than 50 unique filing deadlines annually! Manually tracking their responsibilities can be daunting—but failing to stay current can have devastating consequences for a business. The average late filing penalty can range from approximately $25 to $500 per state (or even more) and repeated violations can result in a business entity losing its status of good standing (and its authorization to legally operate) in their state.
Accounting firms that monitor compliance due dates efficiently can save their clients from unnecessary costs, inability to conduct business, legal issues, and damage to their brand’s reputation. With central visibility into upcoming obligations for their clients’ entities, firms make compliance monitoring manageable and lift a heavy burden from business owners’ shoulders. Firms with access to pre-loaded, state-specific compliance calendars that provide automated alerts at 30, 60, and 90 days prior to deadlines can accurately keep track of upcoming tasks.
3. Standardized, Structured Workflow for Entity Changes
Some changes to clients’ business entities may trigger mandatory state filings, which is often within a 30- to 90-day window.
Examples of time sensitive changes include:
- Principal office relocation or address change
- Change in officers or ownership
- Responsible party change
- Business name change
- Conversion from one entity type to another
- Foreign qualifications or withdrawals
Accounting firms that add compliance services to their offerings need a fail-proof intake process to gather the required information. They also must implement a structured workflow (like the one below) for ensuring updates go through the entire reporting and confirmation process:
- Change request received from client
- State-by-state impact assessment to determine reporting requirements
- Preparation and submission of the filings
- Confirmation and documentation received from state
Failure to report changes to the state are a leading cause of compliance notices and administrative dissolutions, so clients should never underestimate the importance of completing those critical filings on time. Accounting firms that centralize filings execution through a business formation and compliance services partner are well-equipped to handle change reporting across all applicable jurisdictions.
4. Integration with Accounting, Tax, and Payroll Systems
Accounting firms can further streamline their service offerings with integrations between the other systems they use to serve their clients. Successful alignment of an entity management system’s records with information in a firm’s accounting, payroll, and tax software platforms ensures that data matches across platforms. The synchronization of information is vital for avoiding withholding errors, audit exposure, and compliance filings rejections.
When a firm treats entity compliance as a foundational piece of its operational infrastructure, it can more effectively maintain consistency of data across its client services systems. A strategic partnership with a formation and compliance filings company that has robust integration capabilities provides the means to align entity data with downstream payroll and accounting systems without making time-intensive and costly infrastructure changes.
5. Outsourced Filing Execution
Accounting firms that retain advisory oversight while outsourcing the monitoring and execution of entity filings stand the most to gain from adding compliance services to their offerings. Outsourcing the tracking and submission aspects to a partner who specializes in business formation and compliance and has a centralized system for placing orders, monitoring entity status, assessing compliance health, and storing filing confirmations and proof of compliance reduces a firm’s administrative workload and reduces the risks of missed deadlines and filing errors. It enables the firm to amplify its value as a strategic advisor to its clients through broadening its scope of services, thus increasing its revenue potential year-round without adding significant overhead to its bottom line.
6. Proactive Client Communication
Expanding a firm’s strategic advisor role into the realm of entity compliance services requires ongoing communications throughout the client’s fiscal year.
- Ongoing compliance reviews and not just annual check-ins
- Proactive client notifications of upcoming obligations
One effective way for firms to lay the foundation for a consistent communications strategy is to bundle compliance tracking as a recurring advisory service, while relying on a business compliance services provider’s system to do the heavy lifting behind the scenes. With a silent fulfillment partner in their corner, a firm gets all the credit and customer accolades, securing higher client retention and increasing recurring revenue stability (far beyond the peak of tax season).
Final Takeaways
If your accounting firm is interested in differentiating itself to attract new clients, improve client retention, and increase revenue year round, it is worth exploring the opportunity to add high-value, high-margin, scalable compliance services to your offerings. Consider forming a strategic partnership with a business formation and compliance provider (such as CorpNet) who has reliable backend systems and workflows in place to streamline the compliance monitoring, ordering, and fulfillment processes. That’s the key to realizing maximal profit from your expanded services.
The CorpNet Partner Program makes it simple for accounting firms, consultants, tax advisors, bookkeepers, and other professional service providers to add compliance monitoring and filing to their services menu. Our Reseller option allows you to sell our services as your own while we do all the work on the down-low, gives you discounted pricing which you can markup to whatever price point you wish. Our Referral option gives you a commission when you refer clients to us, and we handle the orders directly with those clients.
