Economist Paul Krugman wrote “Productivity isn’t everything, but in the long run it is almost everything”. A country’s ability to improve its standard of living over time depends almost entirely on its ability to raise its output per worker.” This is also true for businesses and organisations. The more effectively a business uses its resources, the more profitable it will grow. Accounting firms are no exception to this maxim. In an environment with ever- growing competition and the rise of AI and automation, what strategies can accounting firms use to grow profits? Keep reading to find out.
Outsourcing. Getting smarter with resourcing can make all the difference! It means hiring the right fit for the firm at the right price. Outsourcing is one such strategy. It gives you access to a larger talent pool and with the right mix of onshore and offshore staff, your firm can increase its productivity as well as increase cost savings. Outsourcing is a smart strategy to get work done in a timely and cost effective manner. It gives you an opportunity to focus on the business development and your core competencies. A reliable accounting service provider can prove to be a dependable partner to scale the business on demand without you worrying about looking for temporary resources during peak seasons.
The benefits of outsourcing apply to firms of all sizes. When running a small accounting firm, it may be tempting to do everything on your own as it may appear to be a cost effective way to do things. However, in the long run it will take away your focus from your core competencies. Outsourcing bookkeeping and accounting operations will help your firm to focus on more profitable endeavors such as advisory and consulting. Usually outsourcing partners utilise the latest technology and accounting software. This takes away the hassle of choosing the right accounting software for your business, managing the various subscriptions and keeping up to date with the latest technology in the field of accounting.
Segregation of Departments – BK/Payroll/Year End. When accounting firm owners wear multiple hats, there may come a time when the revenue of the firm plateaus. This happens because with lack of specialisation comes lower productivity. In order to build a scalable accounting firm, it’s of the utmost importance that it is not people- dependent but process- dependent. When you break down the business of your accounting firm into its various components or processes, it becomes easier to manage the business and you can put systems in place for each process. Thus segregation of departments leads to increased efficiency, elimination of duplicate efforts, increased ownership by the staff, reduced human errors and better internal controls.
Use of practice and task management software/ tools – Practice management software saves time, costs and reduces the time needed to bill clients. Different firms will look for different things in their practice management software. While some might need a workflow built in some will need a CRM. A good practice management software should enable you to manage clients, work, collaborate and track progress of the work. In essence a practice management software is a software you can use to manage the back office of your accounting practice. Let’s look into some practice and task management softwares in detail.
a) GoProposal. GoProposal is a pricing and proposal software specifically designed for accountants. It helps users to speed up proposals and fee reviews instantly while also making letters of engagement and service schedules. It preloads the app of users with various pricing methodologies, services and descriptions for users to add prices, edit and amend.
– Everything is in one place – Pricing, Proposals, Letters of engagement and sign up.
-Existing clients can be put through the tool and it ensures that the payment is coming through as per the latest pricing and on schedule.
-Enables decision making regarding the terms of payments.
-Can be integrated with GoCardless, QuickBooks and Xero including others.
– Scope of improving the dashboard further.
– Though it is preferred by small and mid- tier firm, sole practitioners might be hesitant on account of pricing
b) Onkho. Onkho is a fully integrated client care for accountants. It enables you to plan your workloads more efficiently, never miss deadlines and communicate more effectively with your clients. Onkho targets at reducing the churn which eventually leads to increase in productivity.
– Platform specifically developed for small accounting firms by accountants in practice.
– A fully featured CRM system
– Insights to report on anything from the status of jobs to up-selling and cross selling opportunities.
– The pay as you grow plan may not find favor with all practitioners.
c) Monday.com. Task management software is essential to manage accounting projects optimally. While large accounting firms often use robust, organisation-wide ERP (Enterprise resource planning) systems, small and medium sized firms that do not need such robust systems can opt for ageneric task management software that can be used across different industries. Monday.com is a cloud based project management tool that has its core strengths in how it visualizes work that needs to get done.
– Allows use of Gantt Charts and allows to create unlimited boards
– Allows to customize the forms and conveniently track the deadlines.
– Impressive visualization
– Lack of strong task dependencies
Use of other software such as Dext and AE
a) Dext. The new name for Receipt bank is Dext to reflect the capabilities of the software that go beyond receipt management. It makes business finance easy and helps track, read and store expense receipts on the go and more. The use of OCR gives this software a user-friendly feature by making it simple to capture, process, and share financial information instantly. The capture can be done through the mobile camera on the App or through emailing through your customized email set up in the software. It has a smart and adaptive AI and searches transactions in the software to try to look for matches so as to sync up for payment with ease.
b) AutoEntry. AutoEntry is an automated data entry platform. It has efficiency enhancing features like document scanning, item capture, smart analysis and processing, auto-publishing and document storage. With seamless integration tools and accessibility through mobile apps, AutoEntry is a smart tool that makes accounting data entry faster and efficient.
Use of Management Reporting Software – Futrli, Fathom, Spotlight and Syft. Management reporting software can help you customize KPIs for each client based on their industry, size and goals which can be analysed to make better decisions and also help to drive conversations with clients. Futrli, Fathom, Spotlight and Syft are some of the reporting softwares that are ideal for small and mid-sized accounting firms.
a) Futrli. Futrli is a cloud based forecasting and reporting tool. It has 3 way forecasting and KPI dashboards. It has an impressive visualisation and it’s templates for summary reports are excellent. Its functionality allows you to make decisions on a range of issues right from whether you can afford a new member of staff or office space to whether you need more cash.
b) Fathom. This business information and reporting software transforms accounting data into management reports to offer deeper insights, it’s great at explaining variances to budget and setting out cash flow in an easy to understand manner. It integrates beautifully with accounting softwares including Xero.
c) Spotlight. This is a great plug and play software that makes generating reports easier, given its relatively fixed reporting structure which makes customization comparatively limited. It comes with an extensive chart gallery and chart customization options along with multi-currency accounting features to allow firms to gain a comprehensive view of a group’s performance.
d) Syft. Syft can be best integrated with Xero, QuickBooks online or Sage accounting. It includes features such as automated commentary, branded pdf reports, consolidations, AI-powered insights engine, forecasting, budgeting and benchmarking vs. industry peers.
A mix of the strategies mentioned above or working with an outsourcing partner that uses these strategies will ensure that you run your accounting practice in an efficient and effective manner.