There are many strategies you can follow to increase the profitability of your firm. Making a conscious decision of who you want to work with and only engaging with prospects that align well with what your firm offers is a great place to start.
Fixed fees are the most efficient payment plan, and the type that most forward-looking firms are offering to their clients.
Charging fixed fees for your services make sense for you firm, since they ensure you have a continuous revenue stream. For your clients, it means they are sure they won’t be seeing any unexpected surprises at the end of the month.
However, offering fixed fees makes some firms question whether they are billing their clients correctly. So how can you be sure your monthly fees an accurate reflection of the work that you are doing for your clients? Are you charging enough, or should you be increasing your fees?
Having total visibility of what happens in your practice will give you all the information you need to adapt your fees to make sure they are an accurate representation of what you are doing for your clients’ businesses and increase them if necessary.
Your practice management solution can also provide you with the data you can share with your clients that justifies an increase in fees, so they know the amount of time your staff is spending on all their compliance and advisory work.
Time and billing
The Onvio time and billing module helps owners and practice managers of accountancy firms to ensure all their services, clients and staff are profitable. The time recording feature ensures you capture all the chargeable work your staff does.
By integrating the time ledger with billing means you can monitor Key Performance Indicators (KPI) in the firm. The key areas where the modules provide insights are:
Realisation percentage: provides an insight into the total number of hours worked at standard billing rate compared to what is billed
Utilisation insights: compares the number of chargeable hours a member of staff is expected to work vs the number of hours they are actually completing chargeable work.
Which services and projects offer the greatest profit? By fully integrating Time & Billing with services and projects owners and managers in firms can quickly see if there are areas of the firm that need streamlining or provide insights of growth opportunities.
Growing the firm
Owners of the firm are often the ones who disregard Time recording. I’d argue that unless they are already well self-disciplined, there’s a chance they could be focussed on the wrong area of the practice.
Think back to the classic and still relevant book from the 90’s by Stephen Covey, 7 Habits of Highly Effective People. Too often owners of the firm work in the Business not on the Business. In terms of quadrants, these are often urgent, not important tasks. Whereas to really grow the business Covey suggests working on relationship building, recognising new opportunities and planning, this is the not urgent, important quadrant.
With the ability to record and categorise time, some owners will see they’re spending too much time fire fighting and not enough time on growing their firm.
With Making Tax Digital imposing new demands on online filing processes, effective time-tracking and billing can help you ensure your tasks stay profitable and that you are charging your clients the correct fees.
To improve your cashflow, the billing module allows you to send invoices to your clients and accept online payments from them through our partner Stripe. And when it comes to chasing overdue amounts, you can choose to automate the process by programming batched statements that are sent to clients with a summary of how much they owe.