As geopolitical and macroeconomic events continue to unfold, the business community is bracing itself for a possible recession (Michael Cohn, “Business Execs Take Steps to Get Ready for Recession Next Year,” Accounting Today,http://tinyurl.com/yc52bvyk). Faced with the tightening of corporate budgets and concerns about the stability of clients’ business, CPA firms are looking for ways to find new growth opportunities and improve retention of existing clients.

What many firms don’t realize is that valuable information exists within the client data they already possess. Below are six “data-driven indicators” of client success that firms can leverage to gain holistic insight into the overall health of client relationships.

1. The Service Delivery Process

Knowledgeable and timely services delivery is the lifeblood of the accounting profession. Firm partners and professionals often pay far more attention to the deliverables themselves than how the services are being delivered to clients. To understand the health of an engagement, it is critical to understand key client management characteristics, such as when projects are ahead or behind schedule, why a project is over or under budget, and whether team members are appropriately focused on key client project areas. The ways team members work together, and whether the engagement model is appropriate for the work being performed, can also have a large effect on the client experience. Another layer is understanding how teams manifest and interact internally and externally. All these aspects can be observed by measuring artifacts within firm data systems, including project-level finance and billing data, as well as electronic communications metadata that exist within email and digital collaboration tools. By decoding patterns of delivery behavior, firms can identify “early warning” characteristics.

2. Firmwide Cross-Collaboration

Partners are often not motivated or incentivized to share client relationships across the firm. Part of this originates from the partnership model itself, where firms have historically been siloed into mini companies with separate books of business and P&Ls. More recently, the traditional partner compensation model has been challenged. Partners are unincentivized to introduce clients to other partners out of concerns around internal competition and protecting their own bonuses. Other factors, including independent cultures across audit, tax, and advisory services, as well merger and consolidation trends (where acquisitions of new firms have not been fully integrated into the overall firm), can play a role in reinforcing firm silos. But the author has found that cross-collaboration between practice areas, service lines, industries, and geographies can be some of the strongest drivers of client health and growth opportunity. By integrating data from financial, human resources, and electronic communications sources, it is possible to identify the link between these factors and client outcomes. In this way, firms can identify weaknesses and take constructive action around broadening the reach and quality of a client’s network within the firm.

3. Client History and Demographics

Many CPAs are familiar with personalized “recommender systems” when shopping online. Yet many firms don’t think in this way when anticipating future client service needs. There is a treasure trove of information in firm finance and customer relationship management (CRM) systems about what clients are likely to purchase based on factors such as revenue size, industry, location, type of organizational entity, and general buying patterns. In addition, some firms have many years of historical financial data associated with different client companies, which allow them to map out the “client journey” within the firm—which service offerings (and in which order) led to clients that grew and stayed with the firm for a long period of time, versus those that ultimately left. By connecting the dots between where a client is within its journey, and how clients with similar demographics and services history evolved in the past, firms can rapidly identify growth opportunities in a targeted and prioritized way.

4. Team Composition and Expertise

Where would a firm be without its resident domain experts? A fundamental part of how clients experience a firm consists of the qualifications and expertise of the individuals who deliver the work. One of the most important priorities for clients is that their chosen professionals and trusted advisors are people who “understand their business.” Much of this is measurable within firm data by looking at employee tenure, career and educational background, project history, professional accolades, certifications, skills, and experience. This author has found that there are numerous ways that experience-related metrics can be measured, including proportion of time spent in certain industries, frequency of involvement with project types, and even performance-related factors around which clients an individual was associated with and whether those accounts had positive outcomes. By aggregating this data at the team level, firms can paint a holistic picture of the strength of the team, and how clients are being served in terms of the depth and consistency of individual and professional expertise throughout the life of the relationship.

Cross-collaboration between practice areas, service lines, industries, and geographies can be some of the strongest drivers of client health and growth opportunity.

5. Business Administration and Management

CPA firms may be surprised to learn that the timing of invoicing, and collections that occur after work has been performed, can be an indicator of future client success. The author has seen that when clients start to become late with paying their bills, this can be indicative of other issues with the client relationship—which can fore-cast potential negative outcomes, such as declining revenue or poor client retention. In fact, doing a better job at collections overall can represent a big opportunity for larger firms where modest improvements can amount to a significant boost in annual revenue across the entire client portfolio. By combining this information with other financial elements such as discounting, pricing, profitability, contracting, and pitch results, firms can identify markers of growth opportunity or potential risk inherent within the client relationship that could affect future financial performance.

6. External Market and Corporate Intelligence

Much information about client growth opportunities exists beyond a firm’s four walls. For this reason, firms are increasingly investing in “market intelligence” services. These are typically subscription data feed providers that capture useful publicly available information about client companies, their industries, and executive relationships. In many cases, these sources can integrate directly into firm CRM or custom reporting systems. Additional opportunities to leverage market intelligence involve assessing external factors that impact client accounts, such as macroeconomic instability, industry trends, and news events. Some firms look to combine external benchmarking data with company-specific analysis to identify white space opportunities for growth within existing large corporate accounts (e.g., “we are only 10% of this client’s total spend on our type of services”), or unraveling complex company affiliations to surface internal business development opportunities (e.g., “we are serving only 15% of the portfolio companies within a much larger corporate entity”). Leveraging this type of information allows CPA firms to identify client risks and opportunities using external information and signals that they otherwise would not realize from internal data alone.

Linking together data about clients, services, and people is only part of the challenge. The other part is turning that information into the right measurable metrics that capture practice characteristics and behaviors consistently over time. Knowing which specific key performance indicators (KPI) to generate and sifting through the noise is the bread and butter of modern “client intelligence” systems. With uncertain economic times ahead, CPA firms that embrace these capabilities stand to benefit significantly over those that choose not to.

Paul Giedraitis is the founder and CEO of Orgaimi, based in Chicago, Ill.