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The Accountant’s Success Trifecta

28th Sep 2016
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To become an outstanding accounting firm, there must be cognizance of the vital elements to success and how to manage the various aspects associated with each one. Three key factors that all accountants should focus on are profit, capacity and growth. I will list down the specific strategies for each of these elements that will aid you on your way to becoming a Firm of NOW. Let’s get cracking.

 

PROFIT

As this is the yardstick by which business success is measured, let’s get to it right off the bat. These are the crucial strategies to boost your accounting firm’s profitability:

 

Upfront pricing - All clients must know the price and scope of all projects before a job starts.

WIP and receivables - A strict system should be in place for reduction of such.

Write-downs / write ups - Create a process for write ups and establish net write-ups every month

Services Mix - Low-profit services must be identified and eliminated

Value Pricing - Education and systems should be in place. Can represent greater than 30% increase in revenue

Average hourly rate - Should be measured on every invoice and should grow monthly. Eventual target should be greater than £200.

Productivity - Accountants should be at a healthy 80% while partners should have less than 30% decrease

People development - An education process should be in place to get your team more profitable faster

Client selection - Low-profit or “hassle” clients should be identified and moved up or moved on

Client service - All team members should deliver exceptional levels of service to all clients

Communication program - A structured process must be established - face-to-face, phone, events, social, etc. to greater than 12 per year.
 

CAPACITY

Next up is increasing your accounting firm’s capacity to do more work. The logic is quite straightforward. Capacity should be directly proportional to profit. With a higher volume of work that an accountant does, there is a greater amount of profit. Here are its essential facets:

 

Policies/processes - You must have documented systems for everything. Establish your “how we do it here.”

Workflow management - Build a fully operational workflow system. Can use the PANALITIX 18-step workflow process

Efficiency model - All projects must be completed with less than 80% of allocated hours’ budget

Firm on the cloud - All of you technology systems should be cloud-based.

Clients on the cloud - Have more than 80% of clients on cloud accounting

Team performance - All of your team should be 100% focused on taking time out of projects

Administration team - Have a dedicated team to do administrative work associated with accounting

People mix / location - If outsourcing, offshore or contractor team should be in place and working well

 

GROWTH

Moving on to the growth of your accounting firm. When you have profit and capacity in the bag, the only way to go is up and outward. To do this, here are the most important things you need to consider:

Niche markets - Concentrate on your target sectors and own that niche.

Best buyer - Have a clearly identified target market within your niche.

Brand development -  Be one of the thought leaders in your space - Be known as a ‘go-to’ firm

Web dominance - Your firm should be everywhere on the web

Lead generation program - Create a consistent weekly marketing process that gets ROI

Sales process - Find a documented systematic process that works

Sales skills - Have a sales education process in place to enhance your client-facing team

Retention system - Build a documented ‘Client Success’ process that works

Average project value - Have it measured, focused on, and increases monthly

Number of projects per client per year - All clients should buy all services to help achieve their goals

Business advisory services - Should represent greater than 30% of your fee base and growing monthly

 

These may seem like a long list of things to do but you know that success does not come easy. One thing you can be assured of though, once you have all these boxes ticked, you will definitely see a significant bump up on your bottom line. It’s just a matter of believing.

Colin Dunn  //  Co-Founder & Chief Innovation Officer at PANALITIX

Colin is a Chartered Accountant who, having spent almost 10 years with one of the fastest growing and most innovative firms in the UK, has spent the last 19 years working exclusively with the Accounting profession with a focus on helping them implement business advisory services with their clients. Colin is the brains behind PANALITIX, TRUST, and Proactive Success System, PANALITIX’s three cloud applications for Accountants.

To find out more about PANALITIX, please visit www.panalitix.com or contact [email protected].

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