How you could build the best accounting practice: Part 5

This is Part 5 of my 5-Part blog 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

 

And here are the 5 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
 
In last week’s blog we discussed the 4th Step in this process about how to start the transition process to fixed pricing with your clients. We are now going to introduce Step Five which puts it all together and shows you how to value price your services and let the client dictate terms on that value. Here we go:-


Step 5: Allow Your Client to Tell You What They Want to Pay
From the Scorecard process you will identify the profit improvement potential for your client. The value of this profit improvement can be used as a target to aim for with your client for the next 12 months.
At a minimum you will be working with your client on the following ‘want’ items:-

  • Preparing a profit forecast for the year.
  • Arranging monthly meetings to compare the actual numbers for the month against the profit forecast figures for the month. You can discuss how to deal with any adverse material variations from the profit forecast numbers.
  • Look at measuring three Key Performance Indicators in the business. And emphasize to your client that if you work together to focus on these three key items there is a better than even chance that they will achieve profit targets.

 
Once you have established this minimum level of service, in addition to the NEEDS items on the menu of services, you will then be in a position to discuss the value of these services for the client and also how much they value those services (i.e. how much they are prepared to pay for them).
And here’s the best part…
Allow the client to determine their accounting fees for the year based on their perception of value for those services. And bear in mind the client has that target profit improvement number from the Attaché Scorecard exercise to consider in determining how much they want to pay you to help them achieve that target. Leave it up to the client to come up with what they would like to pay monthly for their accounting fees. This number will be based on their perceived value and will be much more than the number you first thought of… and do you think they will ever complain about the fee that they themselves determined? Have a good think about it.
 
It took me three attempts to master this process in my own accounting practice and it was all worth it. The result was that we had no WIP write-off, clients happily paying their accounting fees monthly and in advance, no write off on invoices and vast improvement in the effectiveness of the practice. We also had a happy team of knowledge workers that did not feel like a six minute increment.

So they were the 5 Steps to Double the Profits of your Accounting Practice. We value your opinion so please feel free to leave a comment below if you have some points which contributed to your success story.

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

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