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5 Keys to Unlocking Hidden Profits in Your Accounting Firm

5 Keys to Unlocking Hidden Profits in Your Accounting Firm

Spending a little time working “on” our business instead of “in” it can make all the difference in your profit margins.  Here are five areas to tighten up for tax season so you can see the fruits of your labor come spring.

1.       Your Internal Systems

Choosing the hardware and software you use in your own business can make all the difference.  If you are having to do too many workarounds, manual processes, and re-inventing the wheel, then you probably need to look at changing systems sometime in 2015 (if it’s too late for this year).

Some of the systems that should be working very smoothly include your tax software, integrated billing systems, and any corresponding client portals.   It must be easy and error-proof to get client information back and forth seamlessly without a flurry of emails and with strong security.

For bookkeeping, you’ll want to have all necessary software versions on your computer, along with your integrated billing systems, client portals, scanners and data entry systems, and anything else you need to serve the client.

In the internal side, a great project management system can track your projects, team member statuses, and project status.  A good CRM can track your leads and prospects.    And hopefully, you have a good accounting system that tracks where you are so you can bill quickly, track late payments, and measure results.

2.       Processes and Procedures

As a small business, you won’t need dozens of notebooks of manuals, but you do want to avoid re-inventing the wheel, as well as provide employees with clear instructions on how to do their jobs well and what is expected.

I used to think I had left this part of the job behind when I was laid off from my Fortune 100 job because it felt stifling and restricted.  But I’ve found the opposite.  Written procedures bring freedom, because now you can train others, get yourself replaced, and do more important things to build the business.

3.       Time

The most difficult of these five keys is learning how to manage our time better.  I’m going to be direct here:  most of us are a bit proud and don’t want to admit there may be a better way.   Even when we do know what we should be doing differently, it’s hard to change and implement.

The answer to this might surprise you:  it requires a mindset shift that gives ourselves permission to believe in ourselves a little bit more and to be more confident.  Only then will we feel that the change is worth it; that we’re worth it.

4.       Forms and Checklists

Developing and using forms and checklists everywhere is part of developing processes and procedures, but it’s important enough to list separately.  Often, this is the place where many of you start before trying to write out your procedures.

You’ll want to have forms for everything from credit card authorizations to monthly service status reports.  The less you have to re-invent the wheel, the higher your margins will be.

5.       Metrics

You might help your clients with metrics, but what about your own business?  Do you know your client attrition rate?  Each employee’s realization rate?  Your DSO?  Your profit margins and how they compare to a firm your size?   If not, there are plenty of tools and courses, including our own in Accountant’s Accelerator, to help you with your own metrics as well as finding out more about all of these keys.

As we transition from 2014 to 2015, think about which are you want to work on first, and make it a goal for next year.

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