A significant proportion of accounting professionals grapple with the idea of increasing their service rates, fearing they might be perceived as overcharging. This mindset generally originates from the assumption that certain tasks such as ‘Service X’, despite its intricate nature, do not validate an increment beyond point ‘Y’.
However, this viewpoint overlooks several critical factors. As experts in accounting, your fees are not solely indicative of the services provided but also highlight the comprehensive experience and advanced skill set you employ to deliver impeccable solutions. Your rigorous academic journey combined with innumerable hours spent gaining practical experience elevates your status within your field and thereby warrants compensation reflecting such distinguished competence.
Furthermore, it is essential to acknowledge one core objective undeniably inherent across all businesses: sustenance and profitability. Whether altruistic intentions prompted the establishment of your firm or otherwise does not negate embracing profitable personal gain without inducing guilt complex.
Let’s take a look at some ways you can start boosting your own personal bottom line as quickly as possible.
Don’t hand out partnerships as rewards
The fundamental aim of your organisation is primarily revenue generation, with you at the pinnacle of this fiscal success. Introducing additional partners could potentially yield contrasting results – they might command greater remuneration packages without necessarily contributing to client acquisition. In fact, their duties may parallel those carried out by regular employees but with significantly increased financial implications.
It is crucial therefore that your organisation’s hierarchy remains stream-lined towards the upper echelons. Maintaining a reduced number of partners — particularly those who have ascended due to longevity rather than demonstrable contribution towards firm expansion — can be instrumental in optimising profitability.
Set service and project prices (don’t bill by the hour)
Pricing on an hourly basis inherently necessitates devoting more working hours to obtain higher earnings. As a method, it simultaneously allows clients to evade the cost associated with your accrued expertise.
It may also inadvertently lead to an unfair situation for either party involved. There is a potential risk that clients might incur additional costs if you intentionally procrastinate due to the perception of their description not appropriately compensating for the knowledge needed to accomplish the task at hand. On the contrary, you may experience remorse if time consumption exceeds expectations leading you to deduct hours as restitution towards the client – a gesture unbeknownst to them.
An alternative approach could be dissecting and analysing services individually. Calculate and establish an average duration required for its execution based on past experiences. Subsequently, formulate an inclusive fee by adding up total paid hours followed by incorporation of another percentage as deemed fair remuneration for professional-level completion of said task facilitated by yourself – it could potentially range anywhere from 10% -15% over and above your computed average time-based charge.
Should you find that particular services may not justify any increase in pricing, it might be worth considering the creation of comprehensive service packages. In this arrangement, the lower-margin service could become a component within the broader package.
Moreover, on calculating your average hourly expense against each service offering, you may deduce that certain services are unlikely to contribute significantly towards profitability. The subsequent step involves making an informed decision regarding their continuation; would divesting these less profitable offerings lead to client attrition?
Ultimately, amplifying focus and resources on high-profit-generating services aligns with enhancing your revenue stream.
Offer more services
Your success is intrinsically linked to that of your clients. By positing performance-based fees predicated on revenue increases, you reinforce a shared commitment to growth and prosperity. This paradigm demonstrates that the greater your involvement in their operations – through the application of various paid services – the higher probability for mutual triumph.
Consider how myriad service offerings might benefit a given client; could they prosper further by availing both your bookkeeping and payroll facilities? What about compliance measures? Have all potential pricing structures been explored to ensure maximal profit margin or cost-saving opportunities?
In illustrating the tangible value derived from each of these services, a dual profit scenario emerges where both parties witness augmented financial success.
Outsourcing
Tasks and activities not intrinsically linked to client interaction can be outsourced. Employing this approach might result in equivalent or enhanced performance while substantially lessening local operational costs.
Prune your clients
Unless you are in the early stages of your business development, it may be a viable decision to consider severing ties with clients who exert more stress and financial demands than they bring in profit. Is maintaining business relations with underperforming clients justifiable? Are their incessant complaints or inquiries significantly affecting your resources that could be better invested toward serving top-tier clientele? Strategically reallocating this time towards acquiring high-performing clients might prove more productive. Furthermore, attracting high-calibre customers can often have a magnetising effect, drawing additional individuals of similar quality. Conversely, retaining underperformers risks accelerating the increased burden on your firm’s resource management due to potential referrals within their network.
Install documented systems
The productivity of your accounting tasks is directly proportional to the revenue generated. Nevertheless, focusing on extensive administrative duties will inevitably deplete the time that can be potentially allotted for actual accounting responsibilities.
To optimise office operations, it is essential to establish efficient workflow systems which must be meticulously documented and communicated across the team ensuring uniform comprehension. Prompt adaptation and implementation of novel strategies aimed at speeding up office procedures are encouraged; thereby evaluating their performance in functionality.
A streamlined firm paves the way towards focussed concentration on core financial activities, significantly enhancing revenue generation capacity. Subsequently, an emphasis on system optimization could reap substantial profitability benefits for you.
Be in the business of making money
As an accounting firm, your focus on profit generation compels you to constantly seek greater efficiency and ways to enhance the quality of your services. This not only presents a compelling value proposition for selling those services but paves way for continual refinement of your operational structure. Through this evolutionary process, you are simultaneously bolstering both—your revenue growth, as well as optimization of financial management and wealth generation for your clients. In essence, in striving to be more profitable yourself, you also become an effective tool aiding profitability for your clientele.
