Powerful tips to improve the efficiency of your practice
When you have absolute clarity on your goals and vision it’s like having a zoom lens for your accountancy practice. You can focus on what’s important and what will help you reach those goals – the rest becomes background noise.
For example, if your personal goals include spending at least two hours of quality time with your family on a weekday evening, you’ll become more mindful about your focus during the time you’re with them.
Likewise, once you’ve established your ideal client profile, your language will reflect this whenever you describe who you’d most like to work with. This will help with your marketing and if you speak at networking events your pitch can include it too. Turning away prospective clients is never easy but the rewards of choosing to work only with your ideal clients are huge.
In psychology, it’s known as selective attention. Once we start to focus on something specific we often develop tunnel vision and can see nothing else. Obviously, the results of this can either be good or bad depending what we choose to focus on.
It’s why goal-setting in business is so important. Once we start to focus on achieving our goals, it’s almost as if antennae spring out of our heads specifically looking for everything that will help us achieve them and filtering out everything that won’t. (A caveat is that although goals are important, they need to reflect your overall vision. If, for example, you focus on turnover as a goal, you may take on any client to try to achieve your target with the consequence that you end up working far too many hours.)
Once you’ve achieved absolute clarity on your vision strategy, your marketing strategy and your pricing strategy – not independently but collectively – you’re ready to embark on the journey to achieving your ideal practice.
I’d like to share how one accountant I know went about transforming his practice after gaining real clarity.
Brian Thompson runs CPT Chartered Accountants and Business Consultants in Darlington. In 2018 the firm won the Business Clarity category in the AVN Inspiring Accountants Awards for their absolute focus on changing the practice and the results they achieved.
When Brian and his team benchmarked the practice with the AVNBenchmark software it was clear they were underperforming in several areas. Here are some extracts from their winning award entry.
They discovered that they were significantly undercharging compared to the UK averages, and with AVN’s encouragement, they decided to increase prices across the board, by 10% minimum and without exception.
‘To date not one single objection has been raised. This gave us confidence to home in on specific business services where we were found to be undercharging. For example, we increased our company secretarial services by 300%, with only 1% of clients opting to do their own.
‘We also implemented an “Extra Work Order” system, which was useful for fee-sensitive clients where we anticipated a potential dispute as it allowed us to agree the fee before work commenced.’
Historically, billing had been done by the partner in between his other work commitments. The whole process was cumbersome, and often many days passed before bills were sent out to clients.
‘We now have a system in place in which each team member is responsible for their own billing. Bills are produced on the morning of the 1st of every month and sent out electronically by the end of the day. The team are encouraged to bill throughout the month where possible to keep the work-in-progress down.
‘Fees for the three months following implementation were up 55%, 52% and 85% respectively on the previous year and cashflow was noticeably improved. Administration time was reduced, freeing up the team to focus on chargeable work and giving Brian more time to work ‘on’ the business. This system also empowered team members as each took responsibility for their client portfolio, improving morale and making each team member feel like a valued stakeholder.’
The team also reviewed their approach to prospective new clients.
‘At initial meetings, all prospects are now presented with three clearly defined packages, illustrating service levels ranging from three to five stars, and a monthly investment for each. AVN’s “Times Up!” system is a crucial part of defining and value pricing these packages.
‘This approach has also proved effective when renewing current clients’ fees. A recent example is a client for whom we prepared company accounts for a fee of £2.5k. When the fees were up for renewal we offered the three packages and the client chose the five-star version, which included management accounts and bookkeeping. The resulting fees rose to £8.5k and the client kindly offered to pay in advance!’
Understanding what your ideal client looks like is so important for getting that clarity. And grading your clients against the ideal profile makes it so much easier to know which ones to focus on.
‘Next, we graded our clients from A to D based on AVN’s suggested criteria. Each team member graded their own portfolio and results were discussed at the steering group. It was found that 79% of our fees came from the A and B clients, who often demand less time than the C or D clients. We could therefore afford to be more bullish with our D clients, either bringing their fees in line with the work required, promoting them to C or above, or parting ways.
‘We discovered we had more A clients than we realised and decided to select 10 of these for our A* programme with a view to maximising future fees, referrals and the client’s personal objectives. This is an evolving process, but we believe in the potential of these clients to transform both our practice and their business.’
The team also put other measures in place including:
And their award entry sums it all up like this:
‘We’ve only been on this journey for four months, but our achievements so far are already having a tangible impact on the partner’s role in the practice. Most notable is the fact that the partner is now able to dedicate one day a week to working “on” the practice away from the office.
The systems that we’ve put in place mean that the practice is becoming more autonomous, requires less of Brian’s input on a day-to-day basis, and provides peace of mind for succession.’
There are more stories from accountants who have taken the first steps towards transforming their practices (and others who are well into their journey) in the book, Putting Excellence Into Practice.
Or if you’d like more direct help, book a free call with me or my team to look into the challenges you’re facing and what you can do to overcome them.
Shane Lukas – AVN for Accountants