As you look to grow your accounting firm, there are endless tools, strategies and solutions you can implement to help achieve your goals.
So, how do you know the right ones to focus on?
This is a question that every firm owner struggles to answer with confidence. But what if you could take a closer look at the firms that have already reached that next level? What if you could know exactly what they did to get there?
It’s only natural to be curious about what everyone else is doing. Right now you’re probably asking yourself many different questions, especially in light of current challenges:
Am I doing all that I can in my firm?
What are my competitors doing?
Are the things we are investing in actually worth the time?
What are some quick wins I can implement today that will have a big impact?
The good news is that it’s possible to get answers to these questions. Karbon’s analysis of 1,000+ accounting firms helps to narrow down that massive list of action items, and outlines the exact activities that are getting results for other firms.
Karbon’s Practice Excellence Assessment has analyzed firms from across the globe to find out what they’re implementing, what’s working and what’s not.
In this article, we’ll focus on the most common activities firms are investing in across technology, reporting metrics, sales and marketing, and management techniques. For each of these categories, we took a deep dive into the data to see which activities are getting:
Too much focus with too little impact.
Just the right amount of focus.
Not enough focus with untapped potential.
Further Reading: Download Karbon’s 2020 Practice Excellence Report for further analysis and insight into how other firms are performing.
These activities reinforce the simple idea that increasing revenue per employee relies on getting work done.
Through regression analysis, the Karbon Practice Excellence Assessment places common activities in one of three buckets:
Under-utilized: These activities have a positive impact on a firm’s Practice Excellence score, but are utilized by few firms.
Appropriate level of focus: Most firms apply an appropriate level of focus to these activities.
Over-utilized: Activities that have little or no influence on a firm’s Practice Excellence score, but many firms are still focusing on it.
Implementing the right technology solutions will help you to streamline your processes across your firm.
But the list of systems and tools to choose from is huge. And it’s not slowing down.
From the firms assessed, the most common technology solutions used by accounting firms are:
Is the amount of focus on each of these solutions balanced, and are accounting firms being rewarded by distributing their focus on these four areas?
Things like task management, cloud email and CRM tools are seeing appropriate levels of focus.
But some technologies like document management and time-tracking software are over-utilized.
This means that the return simply isn’t visible for the level of use, and firms may do better to put less focus on these tools.
On the other hand, not enough firms are utilizing tools for practice/ client communication.
Business intelligence is another area that firms could put more emphasis on.
When you use these types of solutions, you’re able to automate dashboards and reporting designed to provide you with both internal metrics and metrics based on your client services.
Further viewing: Watch how to build a fully integrated tech stack for your accounting firm.
Reporting metrics are critical to truly understand your firm’s performance and future growth.
Karbon’s analysis found that not enough firms are investing the necessary time and resources into tracking the most important metrics. In fact, the Practice Excellence Assessments didn’t reveal any truly over-utilized KPIs.
Most firms are using metrics like MRR, Average Revenue per Client and Jobs Completed by Staff. But there are a few helpful metrics that are under-utilized, mainly related to the client-side of the business.
The Assessment uncovered that only 10% of those companies surveyed are closely tracking the cost of client acquisition and email response time.
Client churn rate (the percentage of clients leaving each month) was slightly more widely used, but only by 18% of firms.
Further reading: Download Karbon’s Metrics That Matter report for the 15 essential KPIs every modern accounting firm must track.
There are many ways to use sales and marketing tactics to expand or improve your client base. Some of these tactics will have a greater impact than others.
A website revamp is the most common growth initiative used by the assessed firms. It’s also a highly over-utilized activity, where the effort needed doesn’t always see sufficient reward.
Newsletters, too, appear to be an over-utilized method to grow a practice. Again,this suggests that the efforts needed to maintain a company newsletter just just don’t seem to pay off in terms of Practice Excellence.
Many firms focus on setting up an ideal client profile, content marketing and local events—all of which seem to provide a good return.
Another valuable but under-utilized tactic is review site cultivation.
Essentially, you encourage satisfied clients to leave your firm a review on a site like Google My Business, Yelp or Trustpilot.
This way, when another potential client is referred to you, a quick internet search can confirm how great your company is.
The process for both the reviewer and the potential client is familiar, quick and easy. Plus, reviews from other practices help to build trust in your brand.
Managing staff presents constant challenges for all businesses. As your firm grows, it becomes increasingly critical to get this right.
Standardizing staff onboarding and creating some formality around procedures and operations is a strong place to start. Doing this increases efficiency by eliminating the need to start from scratch every time you bring a new staff member on board.
Emotional IQ tests are an example of an alternative method that your firm should consider. This is a measure of your team members’ emotional and relational awareness, and involves true engagement with your team, which works to create the culture you’re striving for.
Further reading: Download Karbon’s Growth Playbook for the tools to transform your practice and double your profits in one year.
There’s a lot to unpack in this article, and a lot that you can implement. After reading this, you should have an idea of what you can do now to get some quick wins.
Let’s assume you’ve already got the bases covered, and are already maximizing the activities in the appropriate focus section. Next, by focusing on implementing the activities that most companies are under-utilizing, you can quickly level up your firm’s business proficiency.
If you found this overview helpful, make sure to download the full report. With it, you’ll get a good view on what everybody else is doing and how to make your business truly excellent.