The current reality? Most accounting firms are in busy mode 10 months of every year. For many, there are now two tax seasons. If the path to success is paved with nearly year-round effort and stress, firms must find a way to work smarter while earning more.
That may sound like a dream, but it’s not.
Creating the right environment to maximize profits without running yourself or your staff ragged requires careful planning and stealth implementation of a few simple strategies.
While no two practices are identical, there are many similar challenges and best practices to share. To get the right mix for best ROI, focus on some or all of the following ideas that have helped Optimum Strategies clients in the $500,000 to $5 million range realize an increase in revenue between 8% and 25%, which, in many cases, went directly to their bottom line.
Replicate ideal engagements. Where do you shine or do your best? Define the ideal client engagement for your firm from working and financial standpoints, along with the circumstances that demonstrate your professional and efficiency excellence. Then use this assessment as a guideline when onboarding other clients.
Work the fee band width ladder. Study the nature of engagements that fall within particular fee ranges from high to low, and correlate firm performance and staff inventory in order to maximize revenue per hour and per professional.
Minimum fee build up. Incorporate the appropriate factors that go into the creation of a minimum fee system. The right minimum fees would not be restricted to 1040 clients. They need to be in place for all compliance, and need to accommodate technology factors, proper administrative costs, ongoing education, and research support, as well as a budgeted blend of charge hours/profit and leisure.
Scale the service schedule. Calibrate your practice so that a relevant percentage of services offered is being used by the majority of clients.
Incentivize performance. Whether it is staff, partners or referral sources, defining the desired behavior and desired results will go a long way to getting the desired performance, which should be in sync with your goals for production and profit.
Motivate clients. Use fees and timing to create results that are a win/win. Failure to deliver work in a timely manner should create a penalty to clients. Incentives to deliver work when you want it should be put to good use. Convenience and accessibility should be factored into your service and fee modules.
When you figure out your right mix, test and build internal support for new initiatives, fee structures and service offerings before things get too hectic. You may already be doing some of these things. The key is to institutionalize them to make them a part of your management strategy so you can reap the full profit potential of your firm.