Why is it that accountants & auditors are exceptional at giving sound financial advice to their clients, but find it unmanageable to implement profitable solutions within their own practice?
Let’s look at possible solutions to manage your practice more efficiently by easily accessing and updating your information real time with the latest technology methodologies.
Time based professionals are professionals that studied for some time, and have the right to sell their expertise or their extensive knowledge on a subject like taxation or accounting. In theory it should be simple, the professional charge for the number of hours they work and charge it to the relevant client. They negotiate an hourly rate by a complex method of hours to be sold, workload, expenses and salaries to be paid, in relation to their individual expertise.
Then why is it that many firms are not making money and complaining about the long hours they have to work and don’t reap the benefits. Maybe it is not easy to charge for your own time and manage a practice? Or maybe there’s a lack of information and hence a possibility why you cannot manage your practice effectively; alternatively it is difficult to find the correct information to manage your practice effectively.
Some common problems you could be familiar with:
- More than one database to manage your clients – or no database at all.
- Difficult to track your time & expenses and those of your staff.
- Lack of updated information as it is not easily updateable and available for decision making. System cannot handle Multi-offices/Multi-currency within one centralised database.
- Productive vs. non-productive time cannot be tracked.
- Cannot track Budget vs. actuals as it happens.
- There is no time to manage Work in process.
- Debtors are unmanageable (Your practice does the work this month and only invoice clients months later)
- Need to find information from printed reports instead of generating automated alerts for exceptions or projected work lists
- Difficult to consolidate reports with current structures in place, or produce reports based on practice requirements.
- Not easy to market from your current database.
- Expensive to buy software that will assist in managing your practice more efficiently
Every practice has its own unique challenges but for many the above mentioned challenges are the common ones that most would agree with.
So if there is an agreement that these are the challenges, how do we address this? Or why is it not being addressed? A common response is that “it is not easy”!!!! Or because of time constraints I am unable to manage my practice better or we cannot find the right people to manage this. Some firms just believe that some of these are just not worth checking, like productivity, or the ability to see what was recovered on a project after the final bill was collected, or it is not worth charging interest because it is a difficult job to do. In some instances Partners / Owners / Managers feel it is not worth measuring WIP (work in progress) on a daily/weekly basis because it is too difficult to check. Some even opt just to produce invoices at the end of the month instead of doing it when the work has been completed.
Let’s look at the production cycle, and if you can improve this simple philosophy you should be making more money:
Improving the production cycle is one thing, but speeding up the production cycle could improve profitability tremendously. Let’s break up the production cycle into the following:
Cost: Making sure that you cost your projects correctly and allocating your staff accordingly to charge out rate and availability could mean that you budget correctly. An easy way to do this is to look at previous bills or even budget on last year actuals.
WIP: Your Work In Progress if well managed could reduce overheads, like knowing who is on a project and who is booking time to incorrect clients or even managing idle time. Managing write offs, or being alerted that there is an overrun on a project could mean that you can manage this process immediately. Having the ability to do daily timesheets can prevent the over runs on a project and manage projects more affectively.
Debtors: We all know that out of sight is out of mind and that is all so true when it comes to billing. For some firms the ability to bill immediately after they completed a project could mean that payment is received immediately and not in 30 or 60 days. In some instances where the bill is only created a month later or sometimes even longer, the client has already forgotten what the value proposition was that they received. Having the ability to mail the invoice and statement and not snail mail could reduce bad debts by as much as 10%, enough to pay the utility bills.
Cash: We all know that cash is king, and following some simple rules; such as budgeting for a project, measuring WIP on a daily basis and billing accordingly could ultimately mean more profits.
A CRM system that is designed for the time based professional that not only considers the fact that you are a time based professional but also that you do not have the time to sift through important information. A CRM system that acts like an early warning system, that’s like tracker on steroids. I am not joking, the first time we implemented this, it was mind boggling, how could anyone fail if they have the right information come to them any time all the time?
This CRM system was designed that even the new, or old partner of any firm could have any information that he or she requires any time anywhere. The only problem is that they do not understand how to set it up to make sure it gives you that information.
Allow me to explain, in any firm you need to track productivity? You understand the value of time wasted on idle time?
This CRM software allows you to manage your staff and clients……
- In one database, be it secretarial, tax, debtors or contact information.
- Access data from anywhere in the world at any time.
- Receive alerts sent to you or any staff member based on firms requirements, namely:-
- When a project has reached a defined percentage of completion.
- Companies with Annual duty anniversaries
- Staff not completing timesheets etc.
- View Staff productivity from your mobile device
You don’t need to wait until the end of the month or next month to see who has worked and who not; you can identify a problem before it happens. Doing daily timesheets is no longer a chore but a necessity to make sure you manage your WIP appropriately.
A report that gets generated when a staff member captures overtime OR even non chargeable time can save a huge amount of money on over or under recovery; but how will you ever know if are not notified immediately? And maybe you can address some problems before they become problems?
Communicating with your clients is key, and offering new products and services (upselling) will ensure that any time based professional will survive. Having the ability to market out of one database to a selected audience will ensure future business, or the lack thereof could mean other firms will simply take your clients…
Upselling to your client base with your relationship with your clients could only mean more profitable business.
Implementing a new CRM or practice management solution will not necessarily make you more profitable, but having the ability to manage the firm better will certainly give you the ability to manage your practice better and become more profitable.
And if profit is not your consideration or making more money, it surely must be on servicing your clients better. You can only service your clients better if you understand their needs and what they require from you as a firm.
For more information complete the contact form at the right hand top of this page or contact our Customer Service Helpline on 0861 473 281