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Time investment and increasing fees

28th Feb 2013
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Robert Lovell caught up with Tim Charles and Russell Smith from the AccountingWEB mentoring project, sponsored by BTCSoftware, to find out how the suggested changes have been implemented.

Having made it through self assessment season in one piece, mentee Tim Charles spent the last few weeks catching up with things he had put aside from the tail end of 2012.

In addition Charles has spent the SA aftermath reviewing the running of his practice and has considered a number of software options. Like many other practitioners at this time of year, it’s an opportunity to catch your breath, have a look at your practice and work on how it's running.

“I've been looking at practice management software and measuring the most important thing to me, which is time,” Charles said. “I did look at some different time management software options and the discussions on AccountingWEB about workflow, practice management and timesheets.”

While he hasn’t yet settled on new software, Charles said he was in the process of lining up demos for practice management, and most recently had booked time to check out PTP and Keytime.

As in the previous catch-up calls, mentor Russell Smith was on hand to share his experience and advice.

Both mentee and mentor currently use BTC Software for tax and accounting, but for other things like practice management, Smith said he was most impressed with PTP.

“I've looked at pretty much every system there is accountancy and non-accountancy-wise, and while I've never really found a system that fits exactly into my practice, I was really into PTP software,” Smith said.

In addition to using VT Final Accounts, Smith revealed that his firm outsourced payroll for clients.

He explained why: “I didn't think I could make money out of payroll - I just couldn't look the clients in the eye and say 'we've got a payroll service' when these guys are out there charging a lot lower for a really decent service.

“A lot of firms don't like outsourcing payroll because they're worried about other professionals being involved, but we’ve never done payroll.”

With the issue of practice management software out of the way, the conversation between the two moved on to Charles’ other former bugbear – the structure of his client base and pricing.

In a previous conversation Smith urged Charles to bring down his conversion rate, which has been something he has tried to take on board since.

The advice was to not take on every client that he came across and to increase his fees.

“I've done that, I've implemented it and I've brought down my conversion rate which is definitely going to help,” Charles said.

Charles had a target of 200 clients, a number which he has managed to hover around.

Asked by Smith if it was a difficult transition, Charles said it was pretty straightforward putting his prices up and changing his mindset. “Before I'd take on anyone, but now I'm being really selective. “The increased pricing has put a few off and then some of the others I've had contact with another accountant who is just starting up, so I've passed on quite a few to them. Because it's gone quite well, we're going to set up some kind of arrangement where he gives me a referral fee.”

Smith had also hinted that Charles’ prices were very low, so he increased a self-employed person to £350 [Smith said he should be aiming for £400] up from £250, and for a limited company he is edging closer Smith’s target of £1,200, up from £750.

On time management, or time investment, Smith had used an expression called “cashing out”, whereby at the end of each day Charles should write a list of things to do for the next day.

“I've been doing that every day and it's worked really, really well,” Charles said. “There's nothing more satisfying than putting a tick for everything on the list and when I start the next day I hit the ground running and I know exactly what I'm going to do.”

Charles has also managed to bring his inbox down from 500 emails to 100 emails, and said he was committed to driving the number down to eventually achieve a “zero inbox”.

The two accountants said they would continue to keep in touch and both found the mentoring experience to be of great value.

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