Are you burning out on the compliance hamster wheel? Many accounting professionals gauge their success by the sheer volume of tax returns they process. Unfortunately, this volume-based approach often leads to long hours, exhausted staff, and stagnant revenue. Scaling a highly profitable firm doesn’t require taking on every single tax return that walks through the door; it requires a strategic shift.
Meet the Guest: Mark Martukovich
To help firm owners navigate this transition, host Roger Knecht sat down with Mark Makovich on the Building the Premier Accounting Firm podcast. Mark is the Executive Director of Business Advisory and Accounting Partners powered by Harness. With over 30 years of experience spanning accounting, commercial banking, business development, and consulting, he brings a rare blend of technical insight and real-world perspective to the profession. After acquiring his firm and completely transforming its operations, Mark became a recognized thought leader on moving firms beyond reactive compliance to scalable, high-value advisory relationships.
The Trap of the Compliance Hamster Wheel
Mark’s journey into firm ownership began with purchasing a small practice and eventually acquiring three more to build value. By 2013, his firm was highly transactional. At their peak, they were processing 2,400 tax returns, with Mark personally reviewing 2,200 of them.
The workload was demanding, preventing him from having the high-level conversations he wanted with his clients. He realized he needed to get off the “hamster wheel” and change the conversation.
By joining a program to model the firm around advisory services, the firm was completely transformed. Last year, the firm dropped its volume to 1,700 tax returns. Despite shedding 700 returns, the firm is now more than double in profitability with fewer touch points, and the staff is significantly less burned out.
Stop Giving Away Free Tax Advice
A major turning point for Mark was realizing how much revenue his firm was leaking by giving away expertise for free. He recalled a specific instance involving a Schedule C client who made over $100,000 in profit. Mark immediately advised them to structure as an S-Corporation and take a salary. He gave them the answer and saved the client $5,000 to $10,000 a year.
What did he get for providing that massive value? Nothing. He did not charge them for the conversation because he had not productized or structured his advisory services. Accountants are naturally inclined to give away their knowledge, but scaling requires separating baseline tax preparation from premium tax planning.
Defining Real Accounting Advisory Services
Advisory is a major buzzword, and many firms claim to offer it while only providing reactive, ad hoc answers. To build a scalable model, Mark’s firm defined the questions that 80% of business clients would ask and turned those answers into an upfront advisory service.
They built a structured program focused on teaching a business how to behave like a business. By putting a number to it and charging an onboarding fee, they were finally compensated for the value they provided.
Customer vs. Client: Building Recurring Revenue
A critical mindset shift is understanding the difference between a customer and a client.
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The Customer: Somebody who comes in annually to get a tax return done and has no other interaction throughout the year.
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The Client: An ongoing, recurring relationship governed by a contractual agreement.
Mark’s firm dramatically increased predictability by putting clients on two-year maintenance agreements. Clients pay monthly, allowing the firm to know exactly who they will be doing work for long before tax season arrives.
How Advisory Skyrockets Your Firm’s Valuation
Ultimately, 100% of business owners will exit their businesses or close their doors at some point. When it is time to sell your accounting firm, the services you provide dictate your multiple.
Historically, CPA firms transacted at a top-line revenue multiple, frequently paying around 1.15 times gross revenue. However, Mark shifted the conversation to an EBITDA-driven valuation. When a company recently valued Mark’s firm, they applied one EBITDA factor to the compliance work and a different factor to the advisory services. The result was a valuation bump more than 50% higher for the advisory-based book of business because the revenue was highly profitable, premium, and consistent.
Conclusion
You do not need to process thousands of tax returns to build a highly lucrative accounting firm. By transitioning from a reactive compliance model to a proactive advisory model, you can reclaim your capacity, eliminate staff burnout, and dramatically increase your firm’s market valuation. The first step is simply to package the wisdom you already possess and charge what it is truly worth.
Ready to get off the compliance hamster wheel? ? Listen to the complete podcast episode with Mark Makovich on YouTube right here: Watch the episode on YouTube.
Keep Listening: Catch Up on Our Previous Episode
The “Sticky” Service: Why Every Accounting Firm Should Offer Payroll | Valerie Heckman
Did you miss our last episode? We sat down with Valerie Heckman from OnPay to discuss why payroll shouldn’t be viewed as a low-margin commodity, but rather as the ultimate “sticky” service. Learn the exact signs of when you need to stop processing DIY payroll, how to expertly handle client payroll disasters, and how to turn payroll processing into a predictable, high-margin recurring revenue stream.
Offers:
A tool that firms can use to gauge where they are in delivering advisory services. Download and use this form!
Struggling with the execution and delivery of your Advisory Services? Get in touch with Mark at https://busadvisory.com/
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