Increasing profitability is always a priority for every business, whether through new initiatives and efficiencies or cutting back on expenses (or a bit of both), but it’s often much easier said than done.
In the accountancy sector specifically, many firms find themselves stuck in the trenches of delivering core services for clients, which are important and essential, but this does put a ceiling on your ability to strategise and scale the business.
In this article, we look at five distinct ways to increase your profitability as an accounting firm.
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You may already be aware of the areas in your accountancy firm in which you are spending too much time and resource, but it can be a useful exercise to run an audit anyway. While the specific audit process can vary, depending on your individual company and activities, typically you can look at these areas:
The bread and butter of many accountancy firms, especially SMEs, are core offerings such as basic accounting, bookkeeping, year-end accounts preparation, self-assessment returns, other tax compliance tasks, payroll and auto-enrolment. These take up the vast majority of accountants’ time and resources, being filled with repetitive tasks that need to be carried out with accuracy.
By working with a trusted accounting outsourcing partner, you can hand over these repetitive and time-consuming tasks, safe in the knowledge that the outcomes will meet your high standards, for a managed cost. This frees up time internally for your business to focus on developing your growth strategy and finding new ways to increase profitability.
The most profitable accounting services can sometimes vary from firm to firm, but it’s likely that the maximum value you can add for your clients is in the area of specialist financial advice and business support.
Adding more advisory services to your proposition is a great way to give clients valuable insights that will help their business to grow as well as yours. Using your knowledge and experience to deliver value-added services, with the time freed up by outsourcing some of your core tasks, can make a significant difference to your firm’s profitability.
Some potential new services you can offer could include:
For accountancy firms, retaining and increasing the profitability of existing clients is more efficient than acquiring new business, although a combination of both is always ideal. A great way to test the increased profit potential of new services you’re developing is to offer them first to your existing clients. They already know and trust you with their accounts, so making new advisory services available to them can be a great way to build up additional revenue while gaining useful feedback on what insights and advice is most valuable to them and their business.
There is a lot of power in a word-of-mouth referral. If a business recommends an accountancy firm to others, it’s because they are happy with the services they receive and they trust that firm to do the same for their professional network.
You may have many happy clients who would be happy to tell others about you, but it’s not always something they might think to do. You can help to generate new business by introducing a referral plan to your existing client base, which includes an incentive for the business that helps to send a new client your way.
This doesn’t have to be a direct financial incentive, it can instead be in the form of additional discounted services, free resources or advice. When your happy clients refer you to another business, they get something as a thank you, you get a new client, and the new client gets a great service that they can go on and recommend to someone else too. Everyone wins.
When you’re assessing your current services and processes for efficiency, you may well find that there are some core repetitive tasks for your clients that can be outsourced to help make better use of your internal resource and expertise.
At Advancetrack, our teams have the specialist accounting experience needed to deliver a seamless high-quality service to your clients.
This provides you with time and headspace to develop strategies for growth and take the opportunity to expand and step up your services to give more value to clients.
When partnering with Advancetrack, it’s like you get to enjoy all of the benefits of additional staff members to expand your team, but not the overheads or resources needed to recruit and retain great talent. Another great thing about outsourced accounting is that it can be scaled as needed, so seasonal fluctuations and other changes in demand can easily be accommodated, all while maintaining the high levels of service that your clients deserve.
Book a call with us to find out how we can help your accountancy firm improve profitability.
