Using efficiency to grow your practice
There is more than one way to grow your practice—and efficiency is one of the most viable. The secret to running a more efficient accounting practice is constant process improvement. You need to explore every option to speed up the way every little task or job is executed. And never stop exploring and refining.
Aim for improvement in every small step, no matter how minor that improvement might initially seem. Think about the number of times each step will be repeated, each time the process it is part of is implemented—across different clients and periods. Even the smallest improvements, such as a few seconds eliminated from actioning each email, can add up to huge gains in overall efficiency. High frequency tasks with minor improvements will have dramatic increases.
“We are never satisfied to keep the same process in place if there is a better way to do something. We routinely ask our team members to tell us three things that they see that we can do in a better way.”
Standardization is essential when you want to uncover where your processes are broken and what steps need to be optimized. When your team is following the same steps, you can compare and uncover where staff have innovated to make a process work for the client they are serving—perhaps that innovation can improve the process not only for that client, but across the whole practice.
“Make sure the discussion is around today’s process and not what was written down three years ago or what the manager thinks the process is. Discuss what the doer actually does. The discussion has to be real if you want to improve."”
When you have refined a process, look at technology options that provide additional improvements to that process. Don’t be afraid to look at any new app or to change your existing systems in order to improve your efficiency in the long run. Even if it takes two to three months for staff to get entirely comfortable with a new system, you need to consider the long-term benefit. Will the initial investment in cost and time onboarding and training be quickly overtaken by your long-term gains in efficiency?
Change is inevitable in this profession—if you embrace new solutions and manage that change effectively, you can give your efficiency the leg-up it needs. It is essential if you want to grow your accounting practice without increasing the size of your team.
“Technology is changing our practice faster than we could ever have imagined. The best tool three years ago, or even six months ago, may not be the best one now. We are constantly on the lookout for better ways to solve problems and alleviate pain points.”
Rewarding your efficiency gains
If you charge by the hour, you will gain a lot less from improving your efficiencies—in fact, you run the risk of being penalized. You need to justify to your client the time you spend on a project, so one hour you cut down from a process is one hour less that your client will pay you. Along with this, you need to spend valuable time writing down, chasing and communicating bills to your clients. This is an outdated model that isn’t suited to accounting today.
“We have historically priced hourly and have had our time questioned by the client. Even having people question a very small change.”
Instead, you need to ensure you are being rewarded for the service you are providing, rather than how you provide it. This will ensure every minute saved is a minute you can still be paid for, while you are freed up to focus on other aspects of your business and your clients’ businesses.
The solution is value pricing—setting the price for your services upfront, based on the perceived value you are providing to your client. With this model, the smarter you work and more efficient you get, the more profit you will make.
“If you don’t start with value pricing you won’t be incentivized—in fact, you’ll be penalized—for the efficiency that you put into your firm.”
Automation will unlock further opportunities
The data entry component of accounting, along with other aspects of compliance delivery, can now almost entirely be automated. This fact must be central in your efforts to improve your efficiency further. You need to embrace these advancements in technology and seize the opportunities that automation can offer your firm.
When you find ways to automate processes that were previously manual, you will start to see the really exciting gains in efficiency. And if you are pricing based on value, you’ll still be paid for the ultimate automated output you deliver—the value you provide to your client.
These gains will free your staff up to spend time on other higher-margin areas of your business, like finding more opportunities to help clients through advisory services, putting you in a better position to upsell your services to existing clients. Or, depending on your objectives, you will have more time to focus on internal projects that will improve your business, or provide yourself with a much better work-life balance.
“Being busy is a great problem to have, but not when you want to create real value for your clients. We created this firm to put our clients first and to never compromise our service or commitment to them.”
Explore industry-specific solutions that:
Automate non-value adding processes such as data entry of suppliers’ invoices, debtor follow-up and raising invoices
Automatically assign tasks to clients, and send them gentle reminders if they forget
Automate aspects of your onboarding process such as preparing proposals, generating engagement letters and creating work
Automatically collect data from client bank feeds
Provide visibility throughout your team to avoid double-handling email and ensure everyone knows who is working on what
Assist you in standardizing your firm’s processes
“Nothing outranks the importance of clear and timely internal and client communications, but a close second is our relentless adoption of automated, paperless, cloud-based technologies and our continuous streamlining of the workflows that surround them.”
Using the targets you have set for the amount of time each standardized processes should take, empower your team to find ways to perform each task faster. Set them ambitious goals to reduce the time it takes to complete them by 10%, 20%, or even more each year.