Founded in 2011, Two Roads is growing quickly, despite 85% of their team working remotely, and most of them less than 35 hours a week. The flexible working arrangement does not mean staff output is expected to be any less—quite the opposite. Systems are carefully chosen and critical processes are constantly fine-tuned to enable staff to work more efficiently and handle more clients in less time.
Location: Knoxville, TN, United States
Services: Bookkeeping, advisory, tax.
Years of operation: 7
Number of employees: 22 (19 working remotely)
Number of clients: 150
To understand how effective their team is, Two Roads track staff hours against monthly recurring revenue (MRR). Everyone is paid a percentage of the MRR that they manage, rewarding those who play their role in boosting the top line, while optimizing their own bottom line. And the results speak for themselves. In the last twelve months, the average effective rate for each bookkeeper has increased by 53% and is still rising. Founder, Adam Slack says, “our team is constantly getting more efficient. They have the capacity to take on more clients, can spend more time at home, and earn more money per hour.”
Within twelve months, Two Roads grew their recurring revenue by 55% and client numbers by 60%, all without increasing total hours worked by staff. So, what did they do differently?
A number of measures were taken that were pivotal in enabling the firm’s growth. Training materials were developed to teach staff how to do things the Two Roads way, staff began reconciling on a weekly basis to speed up monthly close and identify issues earlier, and the organization was structured with smaller teams to help staff obtain support faster and work more effectively together.
Something else that has had a huge impact on Two Roads’ road to practice excellence has been their choice of systems. In particular, having Karbon as their practice management solution.
“Our relationship with Karbon led to us becoming more operationally mature, which has been a key driver of our growth,” says Adam. “In the past, we left a lot up to trust and our gut, but Karbon gave us the confidence we needed to scale.”
“There is something special about Karbon that exceeds just the technology. It’s made us a better company in general. We’re now looking at doing things that enterprise organizations do, like NPS, which has come from our association with Karbon. ”
The processes and workflows that Karbon enables removed the risk when Two Roads brought on more clients and boosted the output required per team member.
Adam says, “we are now so much more confident in our communication and ability to scale. If one staff member were to leave, I know I can re-assign all their recurring work in Karbon. When we employ someone new we can get them up and running quickly. They know exactly what to do, and we can track whether they do it.”
Just how far Two Roads have come is best comprehended when looking at client onboarding.
“Before Karbon, our data was all over the place and a mess,” says Adam. “I had no idea who we were even onboarding, let alone how each client was going and how far along we were. We were only growing by two or three clients a month but struggling to keep up.”
Two Roads believe they win or lose a new client in the first 30 days, so improving their onboarding process was critical if they wanted to grow. And they achieved this with Karbon—giving them everything they need in one place.
The entire team now use Karbon daily. Adam and other managers use saved filters on their Kanban board to track progress throughout the day.
“I can look at custom views by team member and see there are 17 active clients in onboarding right now,” he says.
“If we get through the onboarding process and start recurring work, chances are that client will be with us for a long time. We have good systems and an incredible team, so we’re confident that clients are not going to leave us. ”
Today, Two Roads aim to onboard new clients in 30 days and have the confidence to scale as much as 20 new clients a month. A dramatic increase from where they once were. And Adam is confident in their ability to continue growing.
“We know we can handle our growth, but if we can’t, we will quickly see in Karbon where we are failing and what roadblocks we need to overcome. There is accountability now that we never had before. It’s not just staff saying that they’re going OK, I can see for sure how we are tracking in Karbon.”
55% MRR growth in 12 months
60% increase in clients in 12 months
Client onboarding time reduced from 180 days to 30 days
Average effective rate per employee increased by more than 50%
Receiving 50-100 high-quality job applications per month