How to increase your practice's profitabilityby
Let’s put a few facts together and see if we can reach some conclusions that might help accountancy practices to thrive.
First, it is currently recognised that the United Kingdom figures very low on any list of comparatives that measure the amount of productivity per head of population across top industrial countries. Despite our finest efforts, the nation seems unable to climb even a place or two higher.
Secondly, it seems that most firms are not having too much difficulty in generating business but struggle to get work done, given the staff resources on which they can draw.
Thirdly, whenever I talk with other members of the profession, the conclusion that we swiftly reach is that the only thing holding most firms back is the inability to recruit high quality staff and, in many cases, even fairly mediocre people to fill roles at manager level.
Fourthly, whatever any politician says, as Britain becomes a less certain welcoming for workers from overseas, that supply will diminish, making it even harder to staff any kind of business, including many accountancy practices.
Fifthly, very few of us enjoy spending hours in front of hopeless people sent by recruitment agencies who are supposed to weed out the no-hopers and frequently fail to do so. On the plus side, at least agents are willing to charge top dollar when we get desperate and try our luck with someone whose credentials aren’t really up to scratch. That doesn’t change even when the new recruit turned out to be a dud and doesn’t make it through the probation period.
Taking these facts together, it becomes clear that if only we could find additional staff of high quality the sky would be the limit. Even a few new recruits, who are no better than average, would make a significant contribution to the top line and quite possibly an immense difference at the profit level.
All of us are constantly trying to solve with this tricky conundrum and few seem to have found the perfect solution. In principle, offering much higher salaries will bring in really good additional members of staff but that could cause dissension and won’t necessarily help to increase profits.
You are not going to love me for this but the obvious solution is to increase the amount of input from existing members of staff. That could mean that you and all of your fellow partners work a few more hours each week. I fear that this helpful suggestion is likely to go down like a lead balloon with accountants who already believe (in many cases justifiably) that they are working far too many hours and, in doing so, threatening health, marriages and even sanity.
Encouraging members of staff to create extra chargeable hours is also easier said than done. However, this might be the way forward. To start with, if your firm is like any with which I have ever worked, staff probably spend an inordinate amount of time attending meetings that achieve absolutely nothing. Therefore a first step could be to assess each and every meeting and see which could be cut without anybody even noticing.
Getting more radical, at a national level we seem to believe in taking longer holidays and having more public holidays than many other competitor countries. Around the turn of the year and again in the spring, they seem to be almost constant, breaking the flow of work on a regular basis. Perhaps if Theresa May is serious about boosting the economy after we leave Europe, the first step that she could take is cutting out three or four random public holidays.
Pigs are more likely to fly and, in any event, this is unlikely to occur to politicians who have far longer holidays than the rest of us and, many might argue, achieve very little on those rare occasions when they do pop into the “office”.