As in any business, it’s easy for accounting practice owners to get bogged down in the nitty gritty. Before 2020 heats up, now’s the time to break the cycle. These tips will get you started.
2020 marks the start of a new decade and, for some, it’s an opportunity for a new beginning.
For accounting practice owners, now’s the time to leave behind the reactivity and complexity of the past.
Your transition to a more connected, efficient practice begins today.
Having perfected this transition in my own practice before spending the last few years helping other practice owners achieve the same, I’ve compiled a list of five key areas for you to consider before you solidify your planning for the year ahead.
Whether you’re a relatively new practice owner or you’re thinking about your own succession planning, you’ll find a tonne of value in finding the time to improve your practice strategy.
So, stop worrying about how you’re going to survive, and start planning a strategy to make sure you thrive.
You ask this question of your clients but is it a question you ask yourself?
Probably not, because you’re too busy worrying about making sure everyone else around you are happy!
Well here’s a newsflash for you: 2020 is the year of you.
You simply can’t expect to be as effective in helping your clients and supporting your staff if you haven’t properly taken care of your own needs, first and foremost.
That’s why you should make it a priority to take a step back and jot down all the things you need and want from life this year.
Here are the sorts of questions I ask practice owners to consider:
There are so many elements here, but the key one to look at in January is fiscal.
You prepare budgets and forecasts for your clients, but do you prepare one for your own business?
If you haven’t, prepare one pronto for the next six months and diarise in June to prepare a 2020/2021 budget.
This is something I habitually did in my practice.
It’s something I still do for my coaching and consulting business.
It’s something that all of my coaching clients do now, too.
Proper budgeting and forecasting can be a real eye-opener at first, but that’s often what’s needed to help change practice owners’ mindsets when it comes to changing the way they run their practice.
Take it one step further and enter your budget in your accounting software and then each month you can check in on your performance.
Trust me, these activities become addictive, inspiring and so rewarding.
Monitor your profit and loss against budget and begin setting KPIs for the next few months if not the whole year (adjust as you go).
It will surprise you what trends you’re able to see and act on to improve your income, your bottom line and processes.
My recommendation is to set up a spreadsheet or even a sheet of paper that you can write figures in at the end of the month and have it somewhere that’s visible to you daily.
You may like to also consider which team members can see these metrics as a way of inspiring productivity across your business.
While working in practice, I always had a great relationship with the ATO. We consistently lodged more than 90 percent of our clients’ tax returns on time.
One of the things we did in June was to schedule all of our annual compliance work in accordance with our fee budget and our ATO lodgment program.
I’ll share more about that later in the year, but the focus on the next couple of months will be meeting (and hopefully smashing) the ATO’s 85 percent on-time lodgement performance benchmark.
To do this, create a plan for each of the following due dates. I’ve given you a few examples below:
Do you know which of your clients are driving the most profit to your practice?
Chances are there are a few high performers, but there’ll be at least as many dragging you down.
So start building a personal naughty list populated with the names of clients that are hindering your success, either through tardiness, lack of care or outdated systems.
Now think about the type of conversation you could have with them that that potentially could be difficult, but would mean you (and maybe your team) could bounce into the office each day without fear of dealing with a problematic client.
Those hypothetical discussions may include:
If you sit with that list for the next couple of months, perhaps even making small requests to those clients and observe their response, you’ll be in a far better position to ascertain whether those clients are worth your while supporting in 2020/21.
If you’re anything like the practice owners I work with, I’m willing to bet one of the needs you listed above was to spend more time with loved ones and less time working so hard.
The good news is that, unless you’re profitable enough to replace yourself, the best way to claw time back in your day is to improve efficiency through the integration of good tech solutions.
And to figure out what tech you need, you first need to identify the tasks and chores occurring in your practice that people don’t like doing, that don’t directly generate revenue or things you end up forced to do out of hours.
Does your list look like this?
Attend an accounting expo or two in the next couple of months (INCITE is a good start) and check out the players in the areas that interest you.
Do your due diligence online and by putting a call out to your networks for honest reviews.
You can also consider joining me in The Balanced Firm community and learn about all things ‘practice management’.
I’m constantly hearing from practice owners that they would “love to integrate software XYZ” but they either “can’t afford it” or “don’t have time”.
But what is your time worth? Hint: check the remuneration figure you provided in your list of needs.
What’s the cost of not being able to spend time relaxing on the weekend and enjoying the company of good friends and family?
If you’re serious about making 2020 a success, then try factoring new technology costs into the budget that you’ve created. If you value what you do and your vast experience, then justify your prices in order to make the budget work for the technology you require.
I used to tolerate data entry, but I love BankFeeds.
I used to enjoy my A4 lever-arch folder with every receipt meticulously hole-punched, organised in date order behind my month tab (yes, I may have OCD).
But I love the new MYOB Capture App.
I used to get a kick out of sending statements at the end of the month but having automatic reminders in my software advising a client the due date is approaching or their invoice is overdue makes my life better.
I don’t even send statements nowadays.
I first began operating a paperless office back in 2008 with a document management system and standardised electronic workpapers.
You get the picture: technology is no longer just for the big accounting practices – it’s for any practice that wants to be successful and sustainable.
Once you’ve made a commitment to running your practice in a modern, growth-oriented way (the same way you advise your clients to run their business), you’ll be on the road to owning a better practice and leading a better life.