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Practice strategy: Don’t short-change yourself

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12th Jan 2010
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Nicola Draper offers practical advice for practice managers formulating their business strategies for the year.

With all the economic pressures of the past year it’s easy to lose sight of the positives within your business, but if the recession has taught us anything, it’s the need to think laterally and make the best of the resources you have. The New Year offers practice managers a great opportunity to take a long hard look at how the business is run and how the firm interacts with its staff.

Now is the time to get the basics right in your business, starting with your finances. Accountancy firms are great at telling clients how to manage their cash flow but don’t always follow their own advice and can sometimes be their own worst enemies. (You’d be surprised how many accountancy firms I’ve seen with large debt books). Here are some key questions to ask yourself:

  • Has the time it takes you to get paid extended in recent years? Whose fault is that?
  • Do you really invoice on time?
  • Do you chase invoices?

It might be difficult to chase clients for payment for fear of upsetting or losing them, but a polite phone call direct to the client is often more effective than sending yet another statement which seems impersonal and often gets put at the bottom of the pile. It may help to get another staff member (perhaps someone the client has not met) to chase up payments for you.

One accountancy firm I know offers clients a small discount if the bill is paid within 14 days, while another insists on a monthly retainer which means that clients pay their bill in increments and doesn’t receive a large bill at the end of the year. Whichever system you choose, be consistent and keep on top of it.

Being accountants, you are, of course, brilliant at keeping track of your clients’ costs and figures – but when was the last time you made an effort to seek the best deals for yourself? You may not need to change banks, but finding out what rates other banks offer and doing some canny negotiations with your own bank may reap rewards for your business. The same applies to business insurance and rented office spaces. No one wants to lose a good business customer at this time, so there are opportunities for bartering in the current climate.

Market, market, market

During cost saving exercises the first budget that usually gets cut is marketing, but that’s a huge mistake. In challenging times firms should be marketing more, not less. Some clients may go under or be lost to a cheaper service and unless you have replaced them, your business will suffer. Smaller firms should also be wary of putting all their eggs in one basket. If you have one main client, consider what would happen if they went down the pan – after all, it does happen.

Your marketing should be ongoing and not grind to a halt simply because times are tough. Keep up your networking, actively ask for referrals and use your website, newsletters and blogs to drum up work. Make sure your marketing is targeted - don’t scattergun. Whatever sector you’re targeting, by becoming known as experts in a field, you will attract others in that or related fields.

Staffing matters

A businesses’ primary asset is its people, so staff motivation should be a key priority going into 2010. After last year’s trials many people will be worried about their jobs, so maintaining a positive dialogue with your staff will be essential. An upbeat monthly meeting for an hour allows you to communicate better, create a team atmosphere and motivate staff. Simple things like offering a bottle of wine for meeting a deadline or introducing a new client can really help to make staff feel appreciated.

You may also wish to reorganise the office to play to peoples’ strengths. For example, that manager you took on to market the business may not be as good as you hoped, but maybe they’d be happier doing the actual accountancy work for clients? That young chap you took on a couple of years ago may well welcome the opportunity to do more or to meet clients.

You may need to take some tough decisions, and no-one likes getting rid of a loyal, but perhaps inefficient, member of staff. It may be necessary to get rid of deadwood and consider bringing in a more dynamic person. A recession may not seem like the right time to recruit, but the right person (whether it’s someone to get out and sell your services or do the work better while you market the business), can be the best investment you make.

Author Nicholas Bate* once said ‘a recession exposes our poor working practices’. Having tasted a few home truths last year, now is the time to act on those and make sure that 2010 is the best year yet for your practice.

Nicola Draper runs Draper Hinks, a firm specialising in accountancy practice mergers and acquisitions.

*Taken from 'Beat the recession: A Blueprint for Business Survival', by Nicholas Bate, published by Infinite Ideas Ltd.

 

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