Adams Johnston currently have one of our accountants working remotely for them and as a DIRECT RESULT have increased their monthly revenue by 66%! See what Michael Adams (Director) has to say in our video testimonial and why he is an advocate of BOSS.
News & Updates
October 14, 2013
Leverage Your Firm More to Increase Your Revenue by 66%
October 13, 2013
Increase Referrals with this System
There is no doubt that accounting practices get most of their business through referrals. But what seems like a great source of new clients can appear hard to scale.
So how do you capitalize on your network of contacts and the reputation within that network?
Jay Abraham, possibly the biggest marketing guru of all time, covers a system of getting referrals in his book “Getting Everything You Can Out of All You’ve Got”. He devotes a whole chapter to the subject, so for brevity I’ll cover the main points.
How to Do It
When clients deal with you or your staff in person, by phone, letter or email ask them for client referrals as often as possible. Explain to the client in detail what kind of business or person could benefit most from your services.
Offer to consult with the client’s referral or let them sample your service.
The following guide helps you and your clients recognize and refer more clients to you.
Referral System Template
- What are the demographics of your ideal prospects?
- Type of Business
- Business Revenue
- Geographic Region
- Buying Preferences
- Any other demographic group that applies to your business
- Who can refer those prospects to you?
- Prospects who did not convert
- Neighbours and friends
- Association Members
- Other businesses and professionals whom your prospects trust
- Leaders or prominent people whom your prospects admire, respect or trust
- Magazine editors or writers of publications
- Special interest groups (e.g. hedge fund investors, yacht owners)
- Companies or individuals who deal with the clients you want
- Set the stage for getting referrals. Some ideas are:
- If you can, position yourself as different from your competitors.
- Show interest in your current clients by asking them about themselves.
- Explain that even if the referral does not become a client, you will have opened their eyes to what is available, what pit falls to avoid, what they might overlook and anything else that could positively or negatively affect the referral.
- Give them both logical and emotional reasons why they should give you referrals.
- Explain to your clients that you get most of your business through referrals and therefore can devote more time and money in providing a better service.
- Offer to give them an incentive for the referral.
- Offer to give their clients a service for free or at a discount.
- Have your client call or directly contact the referral.
- Do something in advance before asking for the referral.
- Keep in frequent contact with the people who have provided referrals in the past.
- Update your contact of any referrals that became clients.
- Ask for referrals when clients are most receptive. Perhaps when you have done something great for them or when that person has received a promotion or been elected to a special office.
- Help your clients locate the referrals for you. Ask them, “Who do you know who __________?” (Fill in the blank with as many different groups of people and scenarios as possible.)
- Any time a referee refers business to you send them a thank you note and a lottery ticket.
- Tell your referrer you will offer the prospect a one hour free consultation. For high net worth individuals that can be one hour focused on minimizing their tax and looking at steps to protect their assets. For a business it could be providing a free management accounting session perhaps covering cash flow forecasting or a cost accounting analysis.
(Many more examples are given in Jay Abraham’s book)
The steps and the template may seem straightforward enough but the main point is:
If you get most of your business through referrals then implement a systemized process to get more……and use the system daily.
Looking at the sources of referrals shown above you might have just doubled or quadrupled your referral network! All you have to do now is ask…..
On that note, who do you think could benefit from access to experienced accountants, who do high quality work, yet cost 46% less than in-house accountants and they work exactly how the accounting firm works using the firms procedures?
Who do you know who is either working just on their own or perhaps in a firm with several partners, but they struggle to get and retain experienced staff or perhaps want to make considerable costs savings or maybe free up time for doing lucrative value-add work?
Whoever you are thinking of right now, we can offer them a Free Trial!
October 13, 2013
How to Save Time to do More Value-Add Work
Are you bogged down in compliance work, struggling to turn jobs around quickly enough and would like to do more value-add work but you just don’t have time? Well your situation is not unusual but there are companies who are changing things to their advantage.
Before I go into the “how to save time to do more value-add” I’d like to delve into the why.
Client Acquisition and Retention
Even though not all your clients will use your value-add services, your value proposition is one of the primary reasons a prospect turns into a client and stays a client. Your value proposition is the collection of reasons why a company or individual will benefit from working with your firm. Many clients value an accounting professional who can offer true business advisory services and there is a higher perceived value of a provider that can offer more (e.g. financial planning, virtual CFO capabilities, auditing etc.)
Think about this: it is well known clients often come from referrals. But not all new clients are new to the market – many will have used another accounting firm. So why did they move to you? For instance, if a client chose you on the promise of you providing consulting services to them, then you have to deliver to ensure you keep them. The knock on effect of delivering what they want will be more referrals.
I believe you can win in two ways here. Firstly, higher value work commands higher fees and it is difficult for a client to compare providers at this level and shop around on price. However, it is relatively easy for a client to compare the cost of a company tax return completed by two different firms. Thus if you are stuck doing just compliance work there is constant pressure to deliver at a low price. But the second way you can win is if a client is happy with your consulting work, they will be less resistant to paying the top rate for your compliance services.
Interesting Work and Happy Staff
There is no doubt that providing services other than compliance can be more interesting for you. Doing the same thing year in year out would really be a struggle for anyone. But the same is true for your staff. Most staff want a challenge, to learn more, progress in their knowledge and in the company they work for. The reason most good accountants leave is because they cannot achieve the growth they require. If you want to retain the best accountants you need a growth mechanism built in to your firm. If you want to recruit the best accountants you want to be able to boast about the progressive career path and dangle the “you could be doing this soon” carrot.
How to Do More Value-Add Work
What you need is more time. Your biggest time wasters are most probably staff related. Helping staff, dealing with under-performing staff, checking and re-doing work (blowing out job budgets), team meetings, one-one-one meetings, training sessions, trying to recruit staff, reviews, inductions etc.
Now imagine you have a team who for the most part are managed by someone else, trained by someone else, recruited by someone else and 90% of the work is reviewed by someone else……. do you think you would have more time for value-add work? Would your senior accountants have more time to learn and do more value-add work?
Well this is what BOSS can do for you. You can off-load the compliance work and super fund preparation work. What you are left with is time to spend with your clients doing more value-add work.
It’s simple. You decide what BOSS accountants you need working for you, we recruit them and then they do the work remotely as if they were your own staff using YOUR procedures. We can work directly on your system or you can upload work to our secure server. It takes just two hours to set up but gives years of additional time to do whatever it is you’ve never had time to do..
October 13, 2013
How to Motivate Public Practice Accountants
The following is a chapter summary from David Maisters’ fascinating book entitled “Managing the Professional Services Firm.” The book is a nice “How to” manual that draws on his extensive experience in the professional services firm arena and is a great way of learning so you don’t need to re-invent the wheel!
THE MOTIVATION CRISIS
The management landscape is often influenced by variables outside the physical office space of any given firm. Today more than ever professional service firms find themselves in the very unfamiliar position of needing to motivate their junior professionals. The path to partnership, the goal of many junior professionals, is not as predictable and well-defined as it was in the past. Young professionals are now realizing that partnership may be a much more complicated path and no longer worth the sacrifice. In many firms partners are more willing than ever to admit that the satisfaction of being partner doesn’t outweigh the economical or psychological cost. Clients have loftier expectations, are occasionally unrealistic in their demands and are more and more unprofessional.
Motivation is often negatively affected by this change in the rocky road to partnership. By limiting the possibilities for these junior level professionals, the reality of looking elsewhere for a clearer path to career advancement is on the rise. More and more corporations are filling the void that service firms seem to be leaving in their wake by offering junior professionals with a sense of intrinsic value and filling their emotional and psychological needs. For this reason, many junior professionals are simply leaving service firms.
This leaves service firms with competitiveness for clients on the rise and the need for solid young professionals to advance to positions held by the baby-boom generation. A simple review of demographics over the past 40 years shows that fewer children per family equates to fewer professionals to fill these advanced positions. Service firms are now in a position where they need to creatively consider new ways to confront this human resource phenomenon.
THE IMPORTANCE OF MOTIVATION IN PROFESSIONAL WORK
Partners now need to cultivate the development of junior professionals in new and innovative ways in order to stay competitively productive. It is important to understand that there are both internal and external motivations involved in any professional’s outlook. This link or connection between motivation and performance cannot be ignored. We refer to this phenomenon as The Motivational Spiral.
When Motivation is high, the same can be said of Productivity & Quality which positively influences Marketplace Success. The resulting Economic Success is then translated into financial rewards, possible promotions and raises; natural motivating factors that help begin the cycle again. Yet as enticing as this spiral is, it is important to recognize that it is also just as effective in the negative. Low Motivation has a domino effect on the other components of The Motivational Spiral.
Today’s professional firms need to honestly evaluate their managerial organization looking at the entire process from recruitment, work distribution, performance evaluations and feedback to promotions and the inclusion of outplacement. Partners will also step up and into a more defined role with junior professionals to maintain a positive motivational spiral. This may come as an unexpected challenge to some partners who, after evaluating the firm as a whole, come to the realization that their supervisory skills are also in need of rejuvenation.
MOTIVATION AND THE RECRUITING PROCESS
If stimulating motivation within the structure of a service firm is considered to be a necessity, then the next question is how. The process starts ideally with recruitment. Many firms may need to look at certain characteristics such as ambition, energy and drive on an equal plane as education and technical attributes during recruitment. In the book The Soul of a New Machine, author Tracy Kidder refers to the recruitment technique in which the manager was realistic, honest and made sure that potential professionals were aware of exactly what they could expect in the office. This process easily provided a window through which to filter applicants who did not have the characteristics that the firm desired. Far too many firms misrepresent the reality of a position to quickly fill the position, yet in the end are creating a negative Motivational Spiral which may well be more costly in the long run.
Providing an applicant with a realistic view of the position is the obvious choice. Hiring the wrong professional is more costly than the additional effort required in the early stages of recruitment. True professional thrive in a busy work environment that has an adequate amount of challenge, yet rushing the recruitment process to help ease the workload is not a viable option when the goal is to overcome the motivation crisis.
THE PROFESSIONAL PSYCHE
The mindset of a professional may well differ from other workers in that the psyche of an individual who chooses a professional career path is someone who constantly seeks the next challenge. They tend to despise repetitive tasks and bore easily preferring variety in their workload.
Professionals see challenges as professional growth and this is what keeps them engaged and motivated during the work day. Because of this, they often require regular feedback, not much unlike an athlete and coach. Their self-concept is based on measurable “scores” of success and feedback from a partner/manager can be equated to a pat on the back by the coach or a point added to a scoreboard. Feedback, coupled with a sense that their input is valued in decision making, are significant aspects of a motivated professional.
MOTIVATION AND SUPERVISORY STYLE
With a better understand of the professional psyche, implementing Motivational “Maintainers” is the obvious next step in the ongoing process of motivating professionals in a service firm.
- Provide clear goals
- Give prompt feedback
- Reward performance quickly
- Treat them like winners
- Involve in decision making
- Seek their opinions often
- Provide autonomy in work
- Hold accountable for results
- Tolerate impatience
- Provide varied work opportunities
- Keep them aware of upcoming challenging goals
(Source: C. Bell, “How to Create a high Performance Training Unit,” Training, October 1980, pp. 49-52)
As clear as these maintainers are, more often than not many partners/managers omit these simple principles in their interaction with junior professionals. The presence of ambiguity, lack of feedback, delayed rewards and recognition are seen as all too prevalent in far too many firms today.
One true way to maintain a motivated group of professionals is summarized in two statements; “Yeah, you’re good … but how good are you?” Both portions of these statements play a key role in keeping a professional in a mindset of challenge. The first portion references the need to (#4 ) treat them like winners and the second portion references the need to (#11) keep them aware of upcoming challenges.
Nothing motivates a professional more than a challenge of “Bet you can’t do this.” Many partners/managers make the mistake of believing they are helping a situation by decreasing the demands of a project. Instead, they should be raising the bar with the mentality of a coach by asking a professional to reach farther to find their personal best. In the same breath, a good coach is just as supportive as he is critical of his “players” being both specific and constructive when doing so.
THE IMPORTANCE OF MEANING
Successful partners/managers need to focus their energies on providing their professionals with a meaningful understanding of why they do what they do. Even the most menial of tasks, when put into the context of its importance in the overall landscape of a project or even for the firm, will intrinsically motivate a professional. When a professional’s psyche is told that a task is worthy of them, the motivation is instantly there. Additionally, keeping in mind the need for a variety of tasks, a professional is rarely de-motivated because there is just too much to do. Remember, they thrive on challenges and become bored when there is little if anything to do. Maintaining the right diversity in their work and a challenging workload makes for a motivated professional.
MOTIVATION AND PROMOTION
No matter how motivated a workforce is, nothing completely takes the place of promotions. With the reality of making partner more and more elusive in many firms today, no firm can promise continued career progress for every junior professional. Understanding that part of the professional psyche is the need for career progression, the only true answer to this situation is outplacement. By offering such an opportunity, a firm can truly ask for motivation from their junior professionals with the knowledge that there is still a commitment to continuing career progression, even if it is not with their present firm. Many firms are learning that having this new feature of their managerial tool box is a key element to filling a very significant void in their management system.
Long term success is at hand for those senior professionals willing to truly understand and embrace the important role of motivation in today’s service firms. The knowledge that the motivational incentives of the past are no longer available to today’s professionals and the willingness to positively address this fact are what will attract the desired professionals to any given firm. By improving and modifying the role of senior professionals with respect to their interaction with junior professionals and offering outplacement as an answer to fewer partnership positions, the Motivational Spiral will continue in a positive direction for the entire firm.
But there is an even better alternative: engage one of our experienced public practice Outsourced Accountants and save yourself all the headaches and aggro of looking after staff – not to mention up to 54% of the costs!
October 8, 2013
How to Cull Clients to Make Your Business Thrive
A savvy business owner knows which business connections are worth his time and energy and which ones are not. But unfortunately, many others don’t take the time to prune dead-end or troublesome clients simply because they can’t bring themselves to cut the cord for fear of creating an income drought. When was the last time you took an objective look at your client list with an eye to weed out the ones who are more trouble than they are worth, or don’t fit into your profile of an ideal client?
Culling your client list is an important business strategy. It is not personal. It is about their value to your business. According to Anthony Davis, a New York-based partner with Hinshaw & Culbertson LLP, “…this strategy works.” Furthermore he advises,
“Being selective is key. I choose only those clients who meet my predetermined criteria in regards to the type of work and fee-paying capacity.”
Another professional service firm who stays on top of its client’s list and culls it when needed is Deutsche Bank. It has begun to close accounts for customers whose investable assets have fallen below new thresholds. Along with human capital, these professional services firms recognize customer selection and retention criteria as the most important aspect of crafting their firm’s success.
To actively seek the right type of clients and isolating them as “best fit” for your business is what client culling is all about. As a result, you will have a rationalized client base which can free up valuable internal resources to service your current clients better and up-sell more value-add services to them. In addition more budget can be redirected from account managing poor-fit clients and be put into finding more “best fit” clients. In fact the effect will not only improve your profit but make your work more enjoyable.
Dropping a client is not easy. You can take an approach of just fazing them out gently and gradually. This involves not telling them flat-out that you won’t be working with them anymore. With any luck, they won’t even notice that you’re no longer pursuing business with them. By using this gentle touch solution, you get the best of both worlds – you’re no longer spending time courting sales that just won’t happen, and you haven’t insulted contacts that then might bad mouth you.
However, the above approach may take way too long and may never get rid of some your worst clients. A far more proactive and focused approach is to find an alternative accountant that would serve their needs. So if your ideal client is a high-growth business client, then refer a low value, simple “ITR client” to a high street accounting firm used to doing the high volume 20-minute tax returns. Better still strike a deal with the high street firm for a referral fee.
To do this I suggest you send a letter explaining that your business is going through a change and your service offering has been remodeled and now you only focus on business clients. Then provide them with your recommendation of the most suited firm for their needs. Send the letter a couple of months before the busy tax time. The secret is to explain politely how the (unwanted) client would be better served by another firm and that you no longer think that you would be the ideal provider for them. Then ideally have an alternative provider in mind so that the unwanted client still feels looked after.
Your criteria for an ideal client may include many things but here are some as food for thought:
- In business for at least three years
- Pleasant, outgoing personality
- Willing to listen to advice
- Positive disposition
- Technically competent
- Business is profitable
- Business is not chronically under capitalized
- Business is not dominated by a small number of customers or suppliers
- Clearly established demand for the product or service
- Business has a scope for product or service differentiation through innovative marketing
- Business has scope for improved productivity through innovative management planning and control
- Business has a strategic plan
It is also helpful to add to the list above the following traditional client selection criteria:
- Prompt payment history
- Amount of annual revenue
- Potential for growth
- Your customers are your business. They define what you do, how you operate, your character, your profitability, etc. Be wise, be savvy. Know when it’s time to let go.
October 8, 2013
How Do Prospects Form Their Opinion About Your Professional Skills?
It is of the utmost importance that you know exactly how your prospects evaluate you. In other words, what do they look for to determine how professional you are?
Often the more you try to convince someone to use you, the more they will suspect your motives and be sceptical of what you are telling them.
The Prospects’ Method of Evaluating the Level of Your Professional Accounting Skills
It is safe to assume most business owners don’t understand much about accounting.
Then how do they evaluate the level of your technical competence as an accountant?
Don’t think they won’t evaluate it. No way is a prospect going to engage you without formulating some sort of an opinion about your professional skills.
There are two issues here. Firstly, prospects do not have any workable way to determine the level of your professional expertise. Secondly, they are very hesitant to change accountants for that very reason. Nobody wants to make a mistake in something as important and far-reaching as the selection of an accountant.
It is this hesitation that you will have to handle in all of your prospects in order to win them over as new clients.
The most difficult of all decisions your prospect has to make concerns your skills as an accountant: “Is this accountant better than the one I have now?”
Obviously, it isn’t your competence they will make their decision on – they’d really have to be accountants themselves to do that. As you know, it’s no use trying to tell the prospect how good you are… he just won’t believe it. It is also clear that if the prospect cannot make that decision, he will just remain with his current accountant.
So what do you do?
Make Them Feel Good
Being an expert in accounting, you get to see how little most clients understand about accounting in general. The real truth is even worse – since most people will do anything to hide their ignorance. It is so human to avoid letting on when we don’t understand. Not knowing or understanding something has become synonymous with low intelligence. If you don’t know or understand you are “stupid.”
Of course, this is nonsense. Not knowing that the capital of Sweden is Stockholm doesn’t affect your intelligence in the slightest. You just don’t know the answer.
Nonsense or not, it’s a phenomenon you must take into account when dealing with prospects. If your meeting is filled with accounting terminology or you rush through things, your prospect will sit there just feeling lost. If they don’t understand you, they won’t feel like they can relate to you. If they can’t relate to you there will be no solid feelings of rapport.
Rapport is what you need
People buy based on emotions. This is the key to winning over prospects. You can have an armoury of features to your service but ultimately, they need to feel they really like you — and that you understand them. You need to make them feel good.
So watch how your prospect reacts to things you say and if there is a hint they don’t understand, take a bit of time to explain things to them. It is easy to lose sight of the fact you do accounting day-in-day-out and your prospects may only have a tiny inkling of accounting and tax.
Your prospect will make his decision about your professional skills based on how good you make him feel when he’s talking with you. The better the rapport you have, the more he understands what you say and the more he feels you understand him – the more he thinks of YOU.
So it is how GOOD it feels to talk to you, how NICE you are, how WELL YOU LISTEN and how INTERESTED you are in their specific needs that counts.
After the meeting your prospect should think, “Well, he was really nice, he was really keen to know what we need… and he really can listen… I actually understood what he said to me!”
People don’t remember what you have said – they remember how you made them feel. This is the vital ingredient of selling.
October 8, 2013
Content Marketing – What It Is and Why and How Expert Marketers Are Using It
According to Wikipedia, Content Marketing is an umbrella term encompassing all marketing formats that involve the creation and sharing of content in order to attract, acquire and engage clearly defined and understood current and potential consumer bases with the objective of driving profitable customer action.
Content Marketing’s basic premise is to provide some valuable information or entertainment – “content” – that stops short of a direct sales pitch or call to action, but which seeks to positively influence a customer in some way. This information can be presented in a variety of media, including text, video, Q&A’s, photos, etc.
The essence of this content strategy is the belief that if you, as a business, deliver consistent, ongoing valuable information to buyers, you will gain trust and respect while converting prospects into customers.
Benefits of Employing a Content Marketing Strategy:
- Gives your business a higher visibility and wider reach than traditional marketing
- Helps the potential customer to find you and find out useful information on your industry and your products
- Helps your business to achieve higher trust levels from customers
- It builds brand awareness, customer acquisition, generates leads, and promotes customer loyalty.
Content Marketing has gained popularity as the king of all marketing strategies
Businesses around the world have been taking advantage of the speed by which information reaches its target audience. With this kind of support readily available, content marketing has become the most used tactic in their brand awareness strategy list. HiveFire, an internet marketing software solutions company, surveyed nearly 400 marketing professionals about the state of the business-to-business market, and discovered that marketers are retreating from traditional marketing tactics such as search marketing and have made content marketing the most-used tactic in their brand-enhancing tool box.
Other facts resulting from studies made by different opinion-gathering agencies show that eight per cent of business decision makers prefer to get company information in a series of articles versus an advertisement. Seventy per cent say content marketing makes them feel closer to the sponsoring company, while sixty per cent say that company content helps them make better product decisions. (from Roper Public Affairs)
In a report produced by the Content Marketing Institute, “B2B Content Marketing Strategy: 2013 Benchmarks, Budgets and Trends”, 40% of B2B marketers identified their content marketing as “effective” or “very effective”.
Here are some interesting stats from the report:
Percentage of B2B Marketers Who Use Various Social Media Sites to Distribute Content
(Source: 2013 B2B Content Marketing Benchmarks–North America: CMI/MarketingProfs)
In this report it is claimed that the most effective B2B content marketers:
- Spend a higher percentage of their marketing budget on content marketing
- Use more tactics and distribute content on more social networks
- Tailor content to specific customer personas more frequently
- Are less challenged by buy-in from management
All this data points clearly to only one thing – that content marketing is going to become more and more important going forward. For business owners who want to get leads and sales, content marketing is the way forward from now onwards.
So What Can You Do?
This topic is a whole book in itself. But the basics are use channels as indicated in the bar graph above to drive prospects to your website so that they subscribe to an email list, Twitter, YouTube channel (whatever works for you) to receive content from you on topics they will value.
Keep subscribed to us and we’ll be sure to give you some more tips in the future tailored for professional service firms!
Oh and by the way, as your marketing works more effectively and your growth exceeds your in-house capacity – be sure to give BOSS a call to find out more about outsourcing your tax compliance, SMSF work to us……or call us NOW to free up your time to do more marketing!
October 8, 2013
Five Little-Known Secrets this Multi-Million Dollar Sole Practitioner Used to Build His Empire!
Have you ever wondered how some businesses seem to fly along increasing in size and revenue and other businesses struggle to just maintain the same profitability, even though they are in the same market? The businesses can look the same to the casual observer but what happens on the inside is a different story. There’s no single thing that makes them different but there are usually a number of distinct things, some of which can be just small things, but combined they make a huge difference.
Peter Vickers has an accounting practice employing 15 people with a turnover of $2.5 million. I asked him: what are five lesser known things that have made a significant impact on the profit of your business?
1. Become a paperless office
Peter estimates this saves 5% of all employees time. It may seem like a bewildering task to do but it’s actually easier than most people think. Just pick a start date, scan all constitution, deed and trust files then lock up your filing room. From that point on any work done will be with paperless files. Just work normally but scan documents as you go. Don’t scan old files.
2. File using a client-centric system
An effective filing system is necessary to gain the most benefits to a paperless office and perhaps this is one of the reasons it can seem like such a challenge to go paperless.
The solution is to organise documents in a client-centric manner:
- Have one folder per client
- Have sub-folders for each year
- Within each client folder have a sub-folder dedicated to signed copies of tax returns, ASIC documents, deeds, constitution and minutes.
- Within each client folder have sub-folders that mirror your current filing system e.g. tax, land tax, working papers, general ledger etc.
- Name documents using the clients’ name e.g. BOSS Bank Statement July 2010
A system that simplifies the paperless / filing system still further is How Now by business fitnessTM (details and a special offer at the end of this article).
3. Give each accountant three screens, one scanner and one printer
This is more classic time and motion efficiency. Peter estimates this saves a further 5% of employees’ time. All documents can be seen on the screens. He suggests one screen has Outlook, another displaying a scanned document and the other displaying the software program you are using. Have your IT technician set this up so that it is an “extended desktop” which means the three displays effectively merge to be one big display.
The scanner can be a small sheet fed duplex scanner (flat bed scanners take up a lot more space). Each accountant having their own printer saves time compared to many people sharing a printer in the corner of the office. A swivel chair is recommended to swivel between screens to avoid neck or back problems!
4. Standardised procedures
Training staff and having people do things the way you need it done is so important to the smooth running of any business. But this can be a real challenge with having new staff join, rotated or promoted to other jobs.
Having everyone do what you want, when and how you want it done is no mean feat. What you need is a set of procedures that details the “what, when and how” but also improves and gets better over time. For a small business especially, this task can be a challenge but Peter believes the time and trouble is well worth it. He estimates efficiency can be increased by a further 5-10%.
Peter’s staff all use HowNow which has a myriad of standard accounting procedures and templates. It is a source of reference for anyone needing help. The other great benefit of HowNow when it comes to procedures is that new procedures and information pertinent to the running of your business can be added to one easily accessible reference library.
5. What to charge for superfunds
If you struggle to budget for how much time will be spent on a job and therefore how much to charge, then you are not alone. But over the years Peter has evaluated jobs done and has a rule of thumb for superfunds that he thinks invariably works:
Charge 1% of the value of the superfund to your client (with a minimum fee of $2,500)
This will ensure your client is not surprised by your bill and you do not under estimate the time taken to do it.
Using the above rule of thumb, you could save yourself thousands by never having to absorb the cost of under budgeting again. However if you use BOSS to do your superfunds you will reduce your costs by a further 40%. That’s 40% that can go straight to the bottom line.
So let’s add up the (conservative) estimates for increased time and therefore profit.
Just to demonstrate the value of the above five little known secrets, assuming you had a practice with a turnover of $900k. You handle 20 small superfunds and typically charge $2,500 to do them.
Profit last year $300k
Increase of 15% (implementing points 1 – 4) = $45k
Increase of 40% per superfund (20 x 1,000) = $20K
Total increase in profit = $65k
You have just increased your profit by over 21%!
No extra clients required, no additional services need to be offered. In fact less effort is required.
Businessfitness and Your BOSS SPECIAL OFFER!
The team at Businessfitness are Paperless Office Specialists and have the software and standard procedures and templates to achieve the benefits that Peter has discussed. For more details on HowNow go to www.businessfitness.net or contact Margaret George on 1300 333 424.
A FREE Email Management system is available to all firms who mention this article and BOSS.
October 8, 2013
Value-Add: Incredible Story of An Accountant Who Now Earns More Than Ever!
Value-Add: It’s discussed by everyone and pushed by all the business coaches but done by few accounting firms.
Here’s the story of a tiny accounting firm that sold off 80% of the clients (you know those ‘D’ clients you think you need to keep?) and offered value-add consulting services to their remaining clients. Within one year they were making more money than ever!
Of course if you struggle to make time to transition across maybe you should outsource some compliance work to BOSS!
October 4, 2013
Client Retention – A Challenge for Practice Buyers and Sellers
Prepare for smooth transition
As a practice owner you spent your career building the firm from the ground up. You now have a book full of loyal, regular clients and business is still growing. The time will come when you will have to sell your accounting practice for some reasons, and funding your retirement years is one of them. In any event, getting maximum benefit from the sale of your firm will depend upon the successful transfer of your clients to your buyer. Losing clients during transition will usually reduce the payout.
In a personal service business such as an accounting practice, your clients trust you to solve their problems and meet their needs, and if they like the way you treat them they could be your clients for life. But this can make it difficult for you to sell your practice to someone else because clients tend to reassess their loyalty after an acquisition and you cannot guarantee that they will stay. How then will you prepare for transition and maintain continuity?
Allay stakeholders’ fears
- Look at the deal from the clients’ perspective. The clients will get an initial shock. But once they get over it, they will realize they still need an accountant. The best option for the clients is almost always to give the new owner a try – convenience is their top priority. After all, the new owner already has their files and can be found in many cases at the same phone number and the same address as the old owner. If the buyer makes it a priority to reach out to them as soon as possible then staying with the new owner is the easiest choice for the clients to make.
- The seller must clearly communicate to the clients, that he carefully prepared for this event and that services will be provided by the new owner in a similar manner with similar fees to put them at ease. Informing them of an impending change will make them feel protected by their trusted adviser.
- Both the seller and the buyer must develop a business plan for a permanent takeover of the firm by the new owner. It should include work processing, governance, billings and collection. For the protection of the buyer, the plan should also include a non-competition agreement.
- The seller must assist the buyer with introductions to clients and endorsement letters and to bring the goodwill of his clients to the new owner. It is important that he makes himself available to the new owner for a period of time after the sale to answer questions and help with issues. The smoother the transition for clients is, the more likely they are to stay.
Structuring the transfer of the practice
In an article written by Joel Sinkin, a partner in Accounting Transition Advisors, LLC, he suggested two ways to structure transitions from one firm to another.
- Merger Contract with Buy-Out.
The seller and successor merge their practices with a future buy-out, the detailed terms stipulated, signed, sealed, and delivered up front,creating an affiliation starting an appropriate time before the seller’s retirement. Not only does this allow for a stronger, more comfortable transition of the client base, but in the event of the seller’s death, permanent or temporary disability, back-up is already in place.
The seller may also be the beneficiary of increased technology and support, to better service clients until the eventual buy-out. While the buy-out can be done in stages, it is important to have it in place in advance. Neither party wants to wake up three years after initiation of the merger and realize that one or the other cannot agree on the next step of the buy-out or how to structure it. An agreement that details the entire process should be acknowledged prior to establishing any affiliation.
- Sale with a Consulting Agreement.
Selling a practice with a continuing consulting agreement can give the seller many features of a buy-out without the liability exposure of continuing as a partner. The greater the possibility of increased exposure to the seller, the more this arrangement may make sense. While a consulting agreement is obviously for the purpose of an orderly transition, i.e., giving the clients an opportunity to get accustomed to the change, it should not be announced to the seller’s client base up front as a “done deal.”
Keep the clients happy
Practice acquisitions expand client bases, but holding onto clients can be a significant challenge. Changes in products and services can often be the catalyst that forces clients to go and look for another provider. From what we have observed the risk of retaining clients should be shared by both the buyer and the seller. But for the most part, it is the buyer who has control over client retention. It is the new owner who makes decisions regarding quality of services and if he does not provide fair solutions for them, they will leave no matter what the seller says.