As the cost of doing business rises and AI and increasingly complex data systems remove much of the manual work associated with filing taxes, accountants are finding their profits dwindling.
Many firms consider lower prices as a means of staying competitive, eroding their margins and creating strain on internal systems.
But it’s not all doom and gloom – depending on how you view the future.
As old tasks are automated, accountants are free to pursue other areas of practice.
Now’s the time to look at new revenue streams for your practice in 2019 and see how you can continue to remain competitive and offer a superior service.
The basics to increasing your business sales:
According to floatapp, as a business trying to increase revenue, you would typically consider the following options:
- Increase the number of clients on your books.
- Increase the average transaction value per client.
- Increase the frequency of transactions for each average client.
But in order to attract these new clients or to grow revenue from each client, you’ll need to take a careful look at your offerings.
Mine your existing clients for opportunities
In every industry the biggest sales potential is your own existing client base. Your clients know and trust you, so why not take the time to see if they could utilise more of your services?
Spend an afternoon going through your client list. Decide on approaches to transition them to larger packages or additional services. You could also consider surveying your current clients about their needs or creating a referral campaign to encourage them to bring in more business.
- Offering time- and cost-saving products to your clients. For instance, an audit shield package or an ACC review. Upselling additional packages will increase your revenue per clients.
- Most small businesses don’t plan their growth, forecast their cash flow needs or even understand the reports their accountants send them. By providing advisory services that help your existing clients to understand their financials position better, you’re able to increase your revenue without letting go of your core business. These services utilise the business insights you obtain through the management of a client’s accounts and enable you to increase your revenue per client while building a solid relationship that will decrease churn.
- Offer a free business check-up. This is an opportunity to ask your clients a series of questions, then review their goals and cash flow. You provide conclusions based on the data and recommend additional services (such as business advice or coaching). It’s an excellent lead generation tool that can often lead to new business.
- Revamp your pricing. Stop pricing by the hour and using an ad-hoc method for additional services. Many firms now choose to bundle packages and get everyone on a monthly plan – this smooths out cash flow and introduces value-based pricing.
- Prune out the dead wood. Focus on marketing and delivering your services to the clients you really want – the ones willing to pay more for your expertise (The fundbox blog has an excellent article on sourcing value clients). Get rid of the ones that aren’t a good fit for your firm and that cause more trouble than they’re worth.
- Free up your time. In order to increase revenue with value-add services like the kind we’ve described here, you will need to free up time, so your team can deliver.
One of the smartest ways to do this is to outsource your compliance work to Connect.
With over 800 fully trained accountants ready to take on your work we’ll help reduce your margins for compliance and free up your in-house team for the more specialised (and interesting) advisory work.
Cutting costs where possible to increase revenue
Operating a lean business will enable you to collect a bigger share of revenue for every dollar of profit. Look at ways your firm may be able to reduce costs. You could consider:
- Outsourcing compliance. As we discussed above, outsourcing through Connect can be an excellent way to keep more of the money you make while enabling your accountants to focus on more interesting work. One of Connect’s client’s states that, “using Connect we have replaced a $160,000 wage cost with a $100,000 compliance cost, and we’ve increased our production significantly.”
- Working remotely. Renting office space and outfitting your team can be one of the biggest overheads in your business. Many accounting firms are moving to a remote-working model, where the team work from home or a chosen location and connect via conference calls or in co-working spaces when required. This gives staff flexibility and work-life balance, as well as lowering overheads.
- Revamping sales processes. Many firms waste too much time and money on the sales process. Take a look at your sales funnel and leads and see where you could make changes to decrease the amount of time until a sale, improve onboarding, and decrease churn.
Making changes to your accounting practice can be scary, but it’s the only way you’ll be able to grow revenue in 2019. Instead of being afraid of machine learning and AI in your business, embrace them and demonstrate the value humans bring to the business table. Build a vision of your firm for the next 5-10 years and make that vision a reality. Whether your practice needs help in managing your workload or you’re looking to grow speak to the team at Connect to see how we can make your business grow in 2019.
Ed Hayes Business | Development Manager for Connect Outsourcing
I’ve helped over 60 accounting firms become 30% more profitable in 2018 who wants to be next?