Perfect Your Accounting Firm Playbook: 3 Easy Steps to Improve Profitability
The accounting profession’s transition into the digital space has been ongoing for decades, but has recently reached exponential speed. Technological advancements improve year after year, with new and better ways to boost your business emerging and vying for your wallet. If you can’t keep up, you run the risk of losing clients, talented staff, and profits.
We live in turbulent times. To thrive, you must adapt. Fine-tune your accounting firm profitability playbook with strategies that ensure you’ll have consistent cash flow, regardless of what the future holds.
How to Make Your Accounting Firm Profitable
Step 1. Align with Clients’ Needs and Goals
Your first step in crafting a strong account firm profitability playbook is understanding your clients’ needs and goals. This solidifies your position as a trusted advisor and guarantees they will turn to you as their demands evolve. Additionally, knowing your clients’ most pressing wishes gives you a starting point for creating specialized services and providing proactive solutions.
While your clients will have their own unique needs, it’s prudent to keep an eye on the emerging trends and the statistics of a profitable accounting firm. For example, prioritizing client services has risen in popularity, particularly for midsize firms. According to Thomson Reuters, 93% of surveyed tax professionals report that their clients are looking for advisory services.
Specifically, clients are looking for advice on:
- Tax strategy (91%)
- Business consulting (73%)
- Financial planning (63%)
- Decision support (46%)
Another significant trend among clients is the desire for convenient payment methods. In 2022 alone, 60% of payments were made with debit, credit, or prepaid cards, per the Federal Reserve. By 2023, Fidelity National Information Services Inc. estimates that 91% of transactions will be digital.
Keep up with demand with CPACharge, a leading payment software made for accounting professionals, you can save time by easily accepting digital payments and managing invoices all in one platform.
All in all, to maintain a competitive edge, you need to speak with clients, stay informed of rising trends within your specific niche, and adjust your services and pricing to match.
Step 2. Embrace Upskilling & Expand Services
As your clients’ needs continuously evolve, you can stay attuned to these changes by upskilling and expanding your service offerings. Whether it’s including online payment technology, offering strategic advisory services, or providing comprehensive financial planning, expanding your skill set allows you to stay aligned with clients as well as increase profitability through new or updated pricing.
There are three key benefits to upskilling and expanding your services:
1. A competitive edge
Clients will often seek out firms that offer a wide range of services. By diversifying your offerings, you and your firm will be more appealing to potential clients and will stay competitive within the market, which will boost your profitability year-round.
2. High quality talent
A wider variety of services will draw in new and better accounting talent who are looking for firms with greater profitability and growth potential. This will lead to a more experienced staff that is able to take on more complex projects and provide unparalleled services to your clients.
3. Added value
Recent reports reveal that 54% of buyers purchase accounting services in bundles or packages, and that clients are willing to pay 50% more for those bundled services. Expanding your services is a mutually beneficial endeavor; it adds value for your clients and increases the market value of your services. By offering more than tax preparation services, you become a valuable partner in their business and future, which can bolster your relationship.
Step 3. Price Properly
As your firm grows and expands, it’s essential you adjust your pricing to reflect the provided value. While increasing fees can be daunting or awkward, you must ensure that you are compensated properly for your expertise and hard work. There are two ways to approach this: on your own or with a trusted partner like SmartPath, a pricing engine designed to calculate the ideal price for your services.
On your own, you’ll need to conduct a thorough analysis of the costs associated with each of the services you provide. Calculate time, resources, and value margin for each one. Understanding the true cost allows you to make informed pricing decisions.
Then, you can update your fee schedule to match. Instead of billing solely on hours worked, consider pricing based on the value you deliver. With hourly pricing, it’s easy to answer one-off questions here and there and miss out on billing the time correctly. With bundled pricing, you can guarantee you’re paid for every minute worked.
If such an audit seems overwhelming, consider using a tool like SmartPath, a pricing engine that can help you determine the ideal price for your services. SmartPath can streamline the pricing process, make it easier to communicate the added value to your clients, and justify the increase in price. SmartPath also offers the Perfect Pricing Template, which calculates the ideal fair cost for your clients while improving your accounting firm’s profit margins. Get the proper price in minutes, with the data to back it up
Successful Solutions for a More Profitable Accounting Firm
Increasing your accounting firm's profitability is easier when you have a strategic plan in place. By aligning with your clients' needs and goals, upskilling and expanding your services, and pricing accordingly, you can achieve sustainable profitability year after year.
And remember: You don’t have to implement that plan on your own. Embrace solutions like CPACharge and SmartPath to support your revenue growth. With the right technology in place, your firm can flourish in any future.
Schedule a demo today and learn how CPACharge can empower your team to improve profitability.