How to have that ideal accounting practice: Part 1

This is the first part of a five part series showing you how to double your accounting practice profits.

How would you like to have that “ideal accounting practice” with:

  • no capital tied up in debtors or work-in-progress,
  • no compliance deadline stress,
  • a bunch of happy clients who respect your opinion and value the benefits that you bring to their business
  • happy team members
  • a constant flow of clients referred to your practice each month

 

In our introductory blog we identified the five steps with very a brief description on each. Today we will cover the first step in more detail.
Just to remind you of those five steps

Step 1: Reduce Your Administration Time
Step 2: Have a Brainstorming Session and Think of All the Services That You Can Offer Your Clients… and I mean EVERYTHING.
Step 3: How to Start That Discussion With Your Client
Step 4: Transitioning to Fixed Pricing With Your Clients
Step 5: Allow Your Client to Tell You What They Want to Pay

Step 1: Reduce Your Administration Time

A good place to start is to calculate the cost of running your time cost system. You need to take everything into account in this calculation, including the time taken to record timesheets, work-in-progress(WIP) management and WIP write-offs, invoice write-offs and time and money spent on collecting outstanding debtors. And think about how much more effective your team members could be without the burden of having to reconcile time sheets. Once you calculate the real cost of your time cost system you then have a number to work with in determining the viability of transitioning to a fixed price billing system.
For the purpose of calculating the cost of time cost, we have developed the “Cost of Time Cost Calculator.” This calculator is featured on Ron Baker’s web site and you can access this via this link.

We have carried out this calculation with a number of accounting firms ranging from small to mid-tier firms. In some cases we have calculated that the Time Cost System was costing more than 23% of gross fees.

 

View the introduction of Peter's plan to Double your Accounting Practice Profits
View Step 1 of Peter's plan to Double your Accounting Practice Profits
View Step 2 of Peter's plan to Double your Accounting Practice Profits
View Step 3 of Peter's plan to Double your Accounting Practice Profits
View Step 4 of Peter's plan to Double your Accounting Practice Profits
View Step 5 of Peter's plan to Double your Accounting Practice Profits

Gerald FitzGerald's picture
Chief Operations Officer Ireland
gfitzgerald@morganmckinley.com

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