Whether you are organically growing or growing by acquiring an accounting firm, capacity always comes into play. When there is too much work and not enough capacity, someone is always going to suffer. (usually everyone involved.) It’s a delicate balance. Add in seasonality, and the balance can get disrupted fairly easily. The bigger you get, the more important it is to be intentional about your growth – both in your scope of services and how you delegate that work.
First you must analyze your firm’s capacity.
You have to ask yourself:
- Am I working too much in my accounting practice?
- Where is my time going?
- Where is my revenue coming from?
- Where should my energy be going?
- Is my team overworked?
The power of focus is key to running an efficient and growing accounting practice. When you are working too much as the owner several things happen. You get bogged down with menial tasks that keep you from doing the higher-level leadership thinking. You fail to be intentional with the workload you take on, and you also do a worse job managing your team. Said another way, when you are stretched too thinly, you aren’t wearing any of your job hats well and your client deliverables are less satisfactory. For both you and your staff this usually also means a poor work-life-balance and decreased office morale. If you go too far down this path, you may even risk losing both team members and clients.
My answer to this is both simple and at first counter intuitive. The answer is to prune before trying to grow! Do less, not more to start creating that valuable capacity. Personally, in my career, every single time I’ve pruned away work, I’ve always filled that capacity with more valuable work.
To determine your firm’s best opportunity for success you have to ask yourself:
What can we stop doing?
That can lead to a lot of good creative destruction that will free up the capacity you need to go after the better opportunities. Here are some examples:
- Stop working with certain clients.
- Stop doing audits.
- Stop doing work for less than X.
- Stop serving a particular industry.
- Stop working so much.
- Stop under valuing your work. (Say no to billable hours.)
- Stop allowing interruptions.
- Stop using outdated processes.
You get the idea. Watch that capacity. It has a HUGE impact on your success and satisfaction with your practice. Less can be a whole lot more, more free time, more productivity, more enjoyable client relationships, more team satisfaction, and more money.
What should you focus on to build a better accounting firm strategy?
- Take stock of the aspects of your practice you most enjoy. That can be the ticket to building a more profitable accounting firm. We do our best work when it’s enjoyable.
- Identify what you are particularly good at. (Often times the two go hand in hand.)
- Delegate tasks to competent team members. (Take stock of what they like and do well.)
- Implement value pricing. Measuring time for billing purposes is counterproductive to the mindset required to truly free up your personal time. It causes you to value your work in terms of how much time you spent on it, rather than by more meaningful criteria. (Check out our podcast on value pricing with Ron Baker.)
- Set boundaries around your time.
Often, most accounting firm revenue will come from only a few key services. If bookkeeping and personal tax each account for a large percentage of your firm’s revenue, then spending hours of energy on something like audits which may only account for say 5% to 10% of your overall income is most often a waste of firm resources. Upon further analysis, you would very likely find it is actually costing you money.
One of the first things our Accounting Practice Academy members do is perform a realistic analysis of offerings to determine which ones are profitable and which ones can be eliminated. Note that if no one in your firm focuses on a particular specialty, profitability in that area will likely be less than optimal.
Our advice is to cut the fat, and get really focused and efficient at delivering select valuable services. Armed with that knowledge, you can assign your team tasks that they can become very proficient at, meaning you can delegate more responsibility. This frees up your time to focus on filling the funnel with more high-quality clients and create a more profitable accounting firm. We have a great delegation tool you can use to help you get some clarity on what you enjoy, and what is valuable for your firm. It’s a great resource for you to complete, but also for your employees to work on so that you can get clarity about what they are willing and able to take off of your plate.
In short, protecting your time and using it wisely is the best way to grow with intention to simultaneously increase your capacity and your profitability. If you are committed to creating an accounting firm plan that encourages intentional growth, then learn how to increase capacity for your accounting firm by taking Accounting Practice Academy.
Also- Here are a few ways we might be able to help you write your next chapter:
- Register as a Buyer: https://poegroupadvisors.com/buying/interested-buyer/
- Resources(books, podcasts, etc.) to help you run a better firm. Visit https://poegroupadvisors.com/resources/ to explore.
- Planning Tools to help you with your exit strategy. You can check them out at https://poegroupadvisors.com/selling/
- Small group, virtual practice management workshops. Learn more at https://poegroupadvisors.com/accounting-practice-academy/
