Have you ever wondered why some businesses in the same market experience different levels of growth and profitability? Despite appearing similar on the surface, the key lies in their internal mechanisms. It’s not just one factor that distinguishes them, but a combination of several distinct elements. Even small details can have a significant impact when they are combined effectively.
Peter Vickers, the owner of an accounting practice in NSW that employs 15 individuals and generates a turnover of $2.5 million, was kind enough to share with me five lesser-known strategies that have greatly influenced his business’s profitability.
1. Become a paperless office
According to Peter’s estimation, implementing this method can save approximately 5% of employees’ time. Although it may appear daunting at first, the process is actually simpler than people anticipate. All you need to do is select a starting date, digitise all constitution, deed, and trust files, and securely store them electronically. Once this transition is made, all future work can be conducted using paperless files. Simply continue with your usual workflow but scan any new documents along the way. There’s no need to worry about scanning old files.
2. File using a client-centric system
A well-organised filing system is crucial for maximising the advantages of a paperless office. This is one of the factors that make transitioning to a paperless environment appear daunting.
The recommended approach is to arrange documents in a manner that prioritises the client’s needs and preferences.
- Have one folder per client
- Have sub-folders for each year
- In each client folder, there should be a dedicated sub-folder specifically for storing signed copies of tax returns, ASIC documents, deeds, constitution, and minutes. This organisational structure ensures that all important paperwork is easily accessible and properly stored for future reference.
- In each client folder, there are sub-folders that replicate your existing filing system. These sub-folders include categories such as tax, land tax, working papers, general ledger, and more.
- Name documents using the clients’ name e.g. BOSS Bank Statement July 2010
An innovative solution that further streamlines the paperless/filing system is How Now, developed by Business Fitness. For more information and an exclusive offer, please see the details provided at the end of this article.
3. Give each accountant three screens, one scanner and one printer
This method focuses on classic time and motion efficiency. According to Peter’s estimation, implementing this technique can save an additional 5% of employees’ time. By using three screens, all necessary documents can be easily accessed. Peter recommends dedicating one screen for Outlook, another for scanned documents, and the third for the software program being used. It is recommended to have your IT technician configure the setup as an “extended desktop,” allowing the three displays to function as one large display.
A small sheet-fed duplex scanner is recommended for scanning documents, as it takes up less space compared to flatbed scanners. To optimise efficiency, each accountant should have their own printer instead of sharing one in a communal area. Additionally, using a swivel chair allows accountants to easily rotate between screens, minimising the risk of neck or back problems.
4. Standardised procedures
Efficiently training and managing staff is crucial for the smooth operation of any business. However, this can be quite challenging when new employees join or existing ones are rotated or promoted.
Ensuring that everyone performs tasks in the desired manner and timeframe is no small feat. What you need is a comprehensive set of procedures that clearly outline the “what, when, and how,” while also continuously improving over time. For small businesses in particular, this may seem like a daunting task, but Peter firmly believes that it is well worth the investment in time and effort. He estimates that implementing effective procedures can lead to a further 5-10% increase in overall efficiency.
To support his staff, Peter has implemented HowNow, which offers a wide range of standard accounting procedures and templates. It serves as a valuable resource for anyone seeking guidance or assistance. Additionally, HowNow allows for easy integration of new procedures and relevant information specific to your business operations into one centralised reference library accessible to all.
With these measures in place, you can ensure that your staff is well-trained and capable of consistently meeting your expectations while continuously improving their performance.
5. What to charge for superfunds
If you find it challenging to determine how much time and what fee to charge for a job, rest assured that you are not alone. Many professionals face this struggle. However, Peter has spent years evaluating various jobs and has developed a reliable rule of thumb specifically for superfunds. This rule consistently helps him determine appropriate pricing for his services.
Charge 1% of the value of the superfund to your client (with a minimum fee of $2,500)
By providing a detailed breakdown of the services rendered and associated costs, you can ensure transparency with your clients and avoid any unexpected billing surprises. Additionally, accurately estimating the time required for a task is crucial to maintaining client satisfaction and avoiding underestimations.
By following this helpful guideline, you have the potential to save a substantial amount of money by eliminating the need to cover unexpected expenses due to inadequate budgeting. Additionally, if you choose to utilise BOSS for your super funds management, you can further reduce your expenses by an impressive 40%. This significant reduction can directly contribute to maximising your profits.
Now, let’s calculate the projected increases in time and profit using conservative estimates.
To provide a clear illustration of the significance of the aforementioned five undisclosed strategies, let’s consider a scenario where you manage a practice with an annual revenue of $900k. Within this context, you oversee 20 small superfunds and usually bill $2,500 per service rendered.
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%!
There is no need for additional clients or services to be offered. In fact, less effort is necessary.
Business Fitness and Your BOSS SPECIAL OFFER!
At Business Fitness, we specialise in Paperless Office solutions and have the necessary software, procedures, and templates to implement the benefits discussed by Peter. If you would like more information on HowNow, please visit our website at www.businessfitness.net or reach out to Margaret George at 1300 333 424.
All firms who mention this article and BOSS are eligible to receive a complimentary Email Management system.