With thousands of start-ups launching each year, firms should strategise how to get their share of this new business and maximise their earnings potential.
So what are some practical steps practitioners can take to get ahead and carve their niche?
Reconsider your billing
Many accountancy firms still rely on hourly and fixed rate billing, the tried and tested method of their predecessors. Whilst it may seem like the most straightforward way of working, this approach actually harbours many disadvantages for accountants and fundamentally inhibits growth. It does this by presenting a conflict between generating profit, providing value for money, and working more efficiently.
A better approach is value pricing, which assigns the price of a product or service according to its perceived value by the customer. It doesn’t calculate prices by the hours taken to deliver the service, or existing market rates. By removing the focus in billing from timesheets to providing business value, you’ll benefit from increased revenues and deeper client relationships.
Track the right KPIs
Firms should reassess their metrics and how these might have changed in recent years; considering the following, apart from the typical financial measures, to ensure their practice is capitalising on opportunities in a timely manner:
- Churn vs. new sign ups: Clients leave service providers for all sorts of reasons, but if firms are able to track customer wins versus losses, they’ll gain a better understanding of the correlating factors which underpin these peaks and troughs. As retaining customers is typically much less expensive than acquiring new ones, this insight will help management to hang on to more clients for longer. Whilst this can be done manually, where there is budget, specialised data analytics solutions can effectively map the customer journey.
- Account management. Capacity vs. demand: As firms take on new customers, are they hiring enough employees to share the load and give each client enough time and attention? This will be especially important when offering costly advisory services, where clients will expect attention to detail and personalised service from the team.
- Service delivery cost: Measure how much time is taken to deliver certain services, especially those which are admin heavy, compared to the profitability of these services. Consider what functions are draining resources, and if these can be phased out.
- Customer satisfaction: Happy customers underpin growth for any business, so firms should implement a measurement system to assess how satisfied their customers are and if they’re likely to recommend their services to others. One way to do this is via a Net Promoter Score (NPS) survey, through the likes of Survey Monkey. These surveys can be automated and sent throughout the year, providing recipients with questions to answer on scale of one to ten. This data can then be analysed and set against external benchmarks to give firms a clearer indication of their performance
Become a one-stop shop
Businesses can often rely on more than one accounting practice to meet all of their requirements, so practitioners should consider expanding their remit beyond core accounting and tax services to ensure customers don’t have reason to stray.
Providing firms have the appropriate authorisation, additional services they could offer include those related to probate, as well as business valuations and strategic advisory. The latter of which is becoming increasingly lucrative, as more businesses seek out the counsel of their accountants to more effectively manage risk and monitor the health of their business.
Identify your ideal customers
Not all clients were created equally, and whilst firms might be reluctant to turn down any new contract, the reality is that some customers are both easier and more profitable to work with than others. Accounting firms should consider what their ideal customer looks like in terms of size, sector and the services they require, and target customers based on these attributes.
For instance, strategic advisory work can offer high margins so customers who request these services should be prioritised - as well as ‘quick wins’ i.e. when it’s obvious at first glance how value could be driven for a prospect.
Accountancy is a service based business with human relationships at its core. A lack of rapport or too much time spent chasing payment, can often make a particular project more complex than the fees are worth. Therefore, those clients who have a flexible outlook, positive attitude and who pay on time should (in an ideal world!) be the only ones firms choose to work with.
Strengthen your marketing
A good marketing strategy is worth its weight in gold, and whilst marketing doesn’t have to be complicated or expensive, firms must craft their ‘brand’, so prospects can identify what their practice offers and how it’s unique. Firms should build their following on Twitter and LinkedIn, by posting quality content and targeting businesses in the local area through sponsored campaigns and possibly advertising via Facebook Ads Manager. A well maintained company blog will do wonders for search engine optimisation (SEO), and firms can also publicise case studies here as well.
Practitioners could offer free consultations for new customers, and speak at industry events to build their profile. They could consider launching an online learning platform as a lead generation tool; posting webinars and tutorials on topical issues such as tax deductions or working in the cloud.
Save time by automating activities
Those who haven’t digitised their practice by now are missing out, and firms should make every effort to automate their workflow to drive operating efficiencies. For instance, a CRM solution such as Salesforce collects client data from telephone and email communications, helping to streamline customer engagement. Elsewhere, automated onboarding tools simplify processes such as issuing proposals and creating invoices.
One of the most effective and immediate ways accountants can put automation into practice, is through the elimination of manual data entry. AutoEntry, a Xero add on, helps users do exactly that, by capturing and analysing scanned and photographed bank and credit card statements, bills, invoices, receipts and more, automating data entry into a user’s Xero account.
AutoEntry helps users to work smarter with its broad range of features. For instance, AutoEntry captures tax summaries by default and if requested, full line item details including description, quantity and unit price. AutoEntry also remembers how users categorise expenses, such as the relevant supplier account, nominal account and tax code without ever creating duplicate supplier accounts or posting duplicate invoices in Xero. AutoEntry even matches invoices to purchase orders.
Partner with the right software providers
For those already using accounting software, partnering with these types of service providers can provide valuable opportunities for profit sharing and growth.
For instance, those who join the AutoEntry Partner Program can help their clients to become more productive through their use of its technology, whilst benefiting from the generous incentives offered by the scheme. The program offers a range of subscriptions, which rewards partners based on how many new customers deploy AutoEntry through their referral. Partners also receive complimentary AutoEntry credits, for use within their own practice.
Providing excellent service to clients is key, but making sure your practice thrives in a competitive environment takes strong leadership and meticulous planning. Accounting firms should continuously evaluate their performance, and reflect on client feedback in order to refine their service offering.
Within this, making the right partnerships and understanding how to implement automation in practice represents a considerable opportunity for accountants to retire outdated processes and position themselves as indispensable business advisors. In this Age of Technology, this approach will increasingly be key in helping firms to maintain customer loyalty and make a name for themselves in the industry