So, you want to improve profit. To do that, someone has to pay for your services. Enter your clients. Every Accounting firm I have ever trained, coached, or even spoken to has clients who are costing the firm money. They won’t change, they are disruptive, they are disorganized, and they waste Accountants’ time. If you are on a fixed fee with these clients, then that is profit gone. Not to mention the distraction factor and opportunity cost. Start by asking them to leave. Get rid of the bottom 20 percent of clients. Find clients who appreciate your work and you can make a profit on. Every firm has excess capacity (especially when they implement our workflow procedures), and that excess capacity should be used on attaining more clients. If you got rid of the 20 percent of clients who are “bottom feeders” and replaced them with new clients who are A-class, then your profit would sharply increase.
When you have the right client base, you need to give them greater focus. It’s by doing this that you ensure that you maximize profit from each client.
The old (traditional) growth model is all internally focused. Nowhere in it is the client mentioned. The new business model is all about the clients. It’s about marketing to get new clients from firms who are not giving legendary service (hopefully not like you do). It’s about serving them well to keep them delighted, loyal, and referring others. It’s about offering all services to them, and it’s about you receiving fair compensation for the value that you create for the client.
Yes, you need to be efficient and track job turnaround times and productivity. And you need to monitor the average hourly rate and other measures, so you know if you are on track. These are all important things to quantify, but they should not be the primary focus. New clients give you the opportunity to try out new strategies which (if they deliver the results you want) you can later apply to your old clients.
The primary focus should be your clients. In our coachingclub meetings, we are constantly discussing “sales visits” that each partner or client-facing team member is doing each month. We are asking (and keeping accountable) how many were completed, how many projects eventuated from the visits, and what was the new revenue that was created as a result. Yes, I want you to drive top-line revenue, and I also want you to drive customer service and loyalty.
If it’s all about the clients, then you need to be into the clients. You need to think creatively about how you can help them, and you need to constantly meet with them and discuss ideas and opportunities with them. Do this and you will see a dramatic upswing in profits.
Rob NixonCo-founder at PANALITIX
About the Author
Rob Nixon is the world’s foremost authority on how accounting firms can achieve peak performance. Since 1994, he has been running businesses that specialize in helping Accountants run better, more profitable businesses. His speaking work has taken him around the world where he has spoken to in excess of 170,000 Accountants. Currently, his landmark strategies and products are used by Accountants in over 30 countries.
On average, clients increase profit by 75.5%, enhance capacity by 30.6% and achieve sustainable revenue growth of 52.1% - in just 12 months.
Rob is the author of two best-selling books “Accounting Practices Don’t Add Up – why they don’t and what to do about it” – and “Remaining Relevant – the future of the accounting profession”. Both have received rave reviews from Accountants and industry professionals from around the world.
Rob’s latest book “The Perfect Firm: Your Playbook for Building a Perfect Accounting Business” aims to help Accountants build their perfect accounting firm.
In 2005, he created the revolutionary coaching model called coachingclub. The coachingclub model enabled firms to be accountable, to consistently learn and to share ideas amongst their peers. So far, over 800 accounting firms have graduated from his coachingclub program. The vast majority of firms have doubled or tripled profits because of the program.
Rob is a keen golfer (single figures) and adventurer (he is ticket holder 293 on Virgin Galactic to go into space). He lives in sunny Brisbane, Australia with his lovely wife Natalie and three children.