Don’t confuse the two.
Whilst in an ideal world greater (perceived) efficiency will lead to greater profit, it’s become increasingly obvious to me recently that this isn’t always the case.
The decision to grow my practice led me to look at ways that I could improve and systemise processes to make it easier to train new staff and to adopt a systematic approach to a lot of work.
The end goal? To make more money and have a more valuable asset I could sell on in the future.
Standardised software across the practice was one way I looked at achieving this so I took the decision to move towards becoming a Xero only practice, well lets say 90% Xero, there will always be a few clients for who it won’t be suitable.
I’m happy with this approach and its working well. However, be aware of the true time cost of getting client set up on Xero. Yes you’ll save time long term but it always seems to take longer to get clients comfortable with the software than I (you?) imagined.
Another way was to introduce new software, specifically receipting scanning software for bookkeeping and practice management software for the practice as a whole.
Looking at the PM software, this has definite benefits but they will take a while to manifest themselves. I have taken around 40 hours to date working with the mTrio team to get the processes designed the way I want for my practice and to get the raw client data uploaded.
I estimate that there will be a further 30 hours to get the processes set up and staff trained. That is a lot of time which would otherwise have been spent doing chargeable work which means either we don’t bill as much, need to work longer hours to get the work completed or delay the completion of that work.
Receipt scanning software – a word of caution here, don’t get caught up in the bright lights and jump in with both feet straight away. Beware of the pricing structures.
I initially opted for Receipt Bank, functional product and very modern design however a lot of the glitz isn’t necessary and the extras are expensive plus the pricing means that go 1 item over 50 documents a month and the monthly fee will double for each client.
I’ve now changed to primarily using Auto Entry – far more functionality (deals with not just purchase invoices but also sales invoices and bank statements). Not quite as pretty to look at but it does the job.
And, I reduced the monthly cost by around 60%.
I’ve also looked at some of the ‘added value’ reporting software – Futrli (what a stupid name!) and Spotlight. Nice looking products but when it came to the crunch and after calling my clients who I though would be most interested in it, I only managed to find 3 at most who expressed even mild interest. Most of them are happy with the standard reporting in Xero. The extra £20 - £30 a month just for the non essential but nice to look at software just isn’t worth it for all but a few.
Now I consider my practice similar to many small practitioners’ practices – we’ve embraced the cloud and are looking forward. However I’ve realised that in the process of looking to grow that we (our clients included) don’t need every fancy, well marketed app/software product which promises to make our lives easier/better.
In fact there are very few we need.
Yes they may make some things better but that comes at a cost and that cost has a habit of creeping up very quickly. Just make sure that while you look to improve efficiencies you don’t lose sight of profitability.
As we all tell our clients turnover is for vanity…
About Kent accountant
Chartered Accountant based in Kent.
After leaving practice very soon after qualifying, swearing never to return, in 2011 I did exactly that.
Now a sole practitioner and loving it, business growing rapidly and looking forward to the future as my own boss.