3 Keys to a Successful Accounting Firm: Performance, Profitability, and Payments
Building a successful accounting firm isn’t a math problem—there’s no one right solution, which is why the road can seem so difficult. Fortunately, there are a few general rules of thumb that can act as guideposts and make your path easier.
What Are the Factors of a Successful Accounting Firm?
Most successful firms focus on three key elements to empower their teams, drive cash flow and revenue year-round, and improve the client experience:
Each of the “three Ps” plays a significant role in your success during tax season and beyond. In this article, we’ll dive deeper into these key elements and share tips and tricks to help you optimize the 3 Ps in a way that works for your firm.
1. Performance: People and Platforms
First off, let’s talk about performance. Performance in an accounting firm is not solely dependent on having a high-performing team. Of course, investing in the right people is crucial, and nurturing a positive work culture that promotes growth and professional development will only help your team and your output.
However, even if you have a winning team, they may fall before the heavy demands of a busy tax season if their equipment can’t keep up. Providing your team with the high-performing tools they need can help reduce burnout and attract and retain accounting talent in the face of a growing talent shortage.
This technology can include cloud-based accountant billing and invoicing software such as CPACharge. Your team can handle all time tracking, billing, and payments with one easy solution rather than eating up time switching between programs. For example, create line items to document your services and expenses and then assemble those line items into an invoice PDF at the end of the month. Other tools to consider may be collaboration platforms and data analytics tools.
These technologies empower your team to work more efficiently, provide better service to clients, and make more informed decisions based on data. In fact, the 2022 Wolter Kluwer Accounting Industry Survey found that 81% of firms using cloud-based firm management technology reported greater profitability and higher revenue growth. Additionally, 64% cited integrated technology as helping them improve staff engagement and morale.
*Bonus: For more guidance on picking the right tech stack for your firm, reference our Fit for the Future e-book. *
2. Profitability: Services and Pricing
The second P, profitability, is often confused with your bottom line. There’s a lot more to profitability than that. It starts with offering the right services at the right prices.
Consider diversifying your services to meet the needs of a broader client case. For example, more than 90% of clients want advisory services, according to a report from Thomson Reuters. Not sure how to expand into business advisory, tax planning, or other specialized services? Prioritize upskilling to develop in-demand skills that keep your firm competitive. CPACharge offers free CPEs that can help you stay ahead of the curve and refresh evergreen topics such as client intake.
Setting competitive prices is equally important to building a profitable accounting firm. These prices may be determined with a thorough analysis of market rates, client expectations, and your firm’s expertise. Robust financial reporting for accounting firms can really come in handy here. For instance, CPACharge provides insightful reports that empower you to forecast business growth accurately and make strategic decisions.
Whatever your prices and services, be sure that you’re transparent and communicative with clients. The goal should be to help clients understand the value you bring—let them know what you’re charging and why. This will help to build trust and keep clients coming back again and again.
*Tip: For more strategies on how to price services and optimize your firm’s profitability, reference our blog article, “Perfect Your Accounting Firm Playbook: 3 Easy Steps to Improve Profitability.” *
3. Payments: Billing and Getting Paid
For the last P, let’s talk about payments—or, more specifically, billing and payments. Being up to date on current payment trends is part of what makes an accounting firm successful.
(Need to brush up? Learn about the latest payment trends with our e-book, Getting Paid: Trends to Know.)
These days, clients have come to expect online payment methods. A recent Fit Small Business article predicts that “up to 80% of business-to-business transactions will be digital by 2025.” In addition, an ACI Speedpay Pulse survey found that over 95% of people preferred to pay bills online versus in person.
Clients expect convenience and efficiency in every interaction, including with their billing and payments. When a client receives invoices late or inconsistently—or worse, an inaccurate bill—it can strain their relationship with your firm. Additionally, if a client has trouble paying you or doesn’t want to deal with outdated payment practices like writing a check or paying in person, they may seek a firm with more convenient payment methods.
An end-to-end payment and billing solution, such as CPACharge, can help improve client relationships and ensure that you get paid faster, more easily, and more securely. Plus, our software was designed specifically for the accounting industry and offers all the features and benefits you need to run an efficient, profitable firm:
- Track time and expenses
- Create and send itemized invoices in minutes
- View and track the status of each invoice
- Accept credit, debit, and eCheck payments
- Offer flexible payment options such as fee financing and Scheduled Payments
- Seamlessly integrate with QuickBooks Online for automatic reconciliation
With CPACharge, there’s no need to spend money on multiple platforms or experience the hassle of switching between programs. Plus, CPACharge invoicing is free!
How to Become a Successful Accounting Firm During Tax Season and Beyond
Utilizing the three Ps—performance, profitability, and payments—will help you build successful accounting firm growth strategies that win not only during tax season but all year long. And it all starts with CPACharge.
With CPACharge, you’ll get the time tracking, invoicing, and payment features you need to streamline time-consuming processes, ensure profitability, and provide a better client experience.
Schedule a free demo today to learn how CPACharge can empower your team.