We Run Your Practice

How to Improve Your Accountancy Practice’s Brand

Many accountants feel adrift on the subject of marketing in today’s world. Between “Tickety Tocking”, “Vulnerability Posts” on LinkedIn, and all the hype around Inbound Marketing, even veteran marketers have trouble staying on top of what works and what doesn’t these days — not to mention your average accountant.

Everywhere you look, it seems that people are talking about Social Media’s vital role in brand awareness. But a quick trip to Twitter leaves even the most optimistic of us feeling downtrodden and shocked at the state of the world.

And that’s where we’re supposed to build a brand?

Well, yes. To understand why, we need to appreciate what we’re talking about when we say “brand”.

Brands are not simply “brands” anymore.

Eighty years ago, the concept of a brand came down to having a good logo, readable ad copy and a probably decent newspaper-advertising budget.

In this super-connected world where everyone feels entitled to an opinion and often blasts that opinion far and wide regardless of their credentials (or lack thereof), brand has become far more complex.

Brand has always meant identity — how you portray your company to the world.

But never has the perception of that identity rested in so many hands which are so far out of your control. One wrong word and the seemingly ubiquitous cancel culture might lower its mighty sword on you, even when they’re wrong.

That’s perception. Brands are no longer defined by a great logo or a wonderful photo op at the local human rights rally — brands are determined by the things you do every day and how you take care of your customers.

Do you need a brand if you are small?

When people think of brands, they tend to think of Coca-Cola, McDonald’s, Nike, Amazon, and so on. They think of the giants and believe the world these giants tread on is different from our own world.

When Amazon creates an ad that brings people to tears, it is watched by millions. If your small accountancy practice created an ad of the same impact (costs aside), would it be as effective?

It’s a question of the global stage and the local stage. Macrocosm and microcosm. Every person is a king (or queen) in their own corner.

When determining if you need a brand as powerful as the giants’, take the size-factor out of it. Think, instead, of people who walk past your practice’s door every day. Think of the 1,000 or 2,000 followers you have on LinkedIn. Think of the 100 visits your website gets every week. Even though that isn’t millions of people, those people will indeed respond to your brand when they see it.

Given two accountancy practices that offer pretty much the same thing, which one will someone choose? Would they choose the practice whose brand and ethos communicates (1) “Helping Bring Jobs to Your City through Good Accounting” or will they choose the brand that says, simply, (2) “Chartered Accountants”?

It’s all about perception.

Customer Service

There are two crucial phases in marketing:

  • Getting new customers
  • Keeping existing customers

As an accountancy practice, you need to be sharp on both points.

customer service

“Getting new customers” requires branding that works well on a first-impression basis.

“Keeping Existing Customers” has more to do with customer service. What you do will translate into how those customers perceive your brand more than the marketing material you send them.

The initial perception — logo, colour scheme, those vital photo ops — can only take you so far. These days, what people really want to know is what others are saying about you.

As Warren Buffett so aptly put it, “It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.”

To build a strong brand as an accountancy practice you must serve your clients with the utmost professionalism and jump on any dissatisfactions immediately. If you make yourself available for clients to reach you, and help them willingly with their problems, they are far less likely to run off to Twitter and post their discontent before reaching out to you first.

You also need to proactively get clients to positively review your business or talk about it positively online. A good way to do this is with follow-up emails to check if the client is satisfied. Have a link in the email that sends them to an online review platform if they were pleased with your service. Or give them a “one-click” option to tweet something positive about your service.

As you can see, social media plays a crucial role. The best way to win at social media and avoid catastrophes is to take a proactive role in it.

Prepare social media posts long in advance, always sticking to posts that match how you want potential customers to perceive you.

And always keep your existing clients happy and encourage them to engage with you online.

Target markets

You can’t appeal to everyone, and not everyone will perceive your brand with the same enthusiasm.

That’s not necessarily a bad thing.

If you’re trying to reach out to small mom-and-pop businesses, a friendly, approachable brand might be necessary. Funny, quirky videos would be a great way to get that type of brand’s message across. So would light-hearted social media posts that don’t touch on anything heavy or controversial.

But if you serve primarily large businesses, this type of approach is unlikely to garner much interest.

It doesn’t really matter if you go for the staid, serious brand or the playful, quirky brand. It all depends on your target market. (Some companies are looking for staid and serious.)

But you do need to take a two-pronged approach: (1) The first impression to new clients and then (2) the nurturing of existing clients, encouraging them to review your services online or to post positive messages about your practice on social media.

Brand is about perception, and you need to constantly work on that perception to avoid the pitfalls of a super-connected world that is quick to judge and quicker to pass sentence.

Accountancy Owners Are Tired. Here’s What to Do About It.

It has been a gruelling six months since lockdowns spread across Europe and then England. Accountants have had to play catchup with one coronavirus scheme after another, advising their clients on everything from Job Retention Scheme to Bounce Back Loans, CBILS, SEISS, and so on.

Just reading the list of schemes itself is exhausting, not to mention:

  1. Understanding the intricacies of each one.
  2. Then understanding how it might dovetail (or not) with your client’s needs.

Just as accountants were preparing to deal with complexities of tiers of lockdowns, Boris J. went and announced yet another nationwide lockdown, adding to the strain of accountants who have fought right along with their clients to prevent their finances from imploding and their businesses from collapsing.

Add to the above that many accountancy owners themselves are also facing the same problem their clients face, wondering if they shouldn’t just cut their losses and run.

We all want to do good by our clients. To that end, Accountants have gone above and beyond in advising clients on the different schemes, assisting them in applying for one if it was a good fit, advising them against another because of their debt profile, and so on.

The task is both mammoth and exhausting. Here are some things you can do to reduce that exhaustion.

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Realise you are not a therapist

Times are tough for everyone. The in-thing on LinkedIn these days is to show your vulnerability and that you’re human as opposed to letting everyone think you’re a superhero.

As with everything in business, a little goes a long way, but too much can make you nauseous.

There’s nothing wrong with being a sympathetic ear every now and then. But your job is to ensure your clients’ businesses do not collapse due to a mishandling of their finances and their accounts, not because of their emotional state.

Taking on other people’s woes will only burden you more. Give good, professional advice but draw the line there. To do otherwise is exhausting.

Triage? Maybe not.

Here’s the hard truth of it: Some businesses are going to go down unless concerted, dedicated, full-time effort is made to keep them afloat.

The burden of that effort falls on the business owner, not you.

Unless you are personally responsible for someone’s failures in accounts and finances, you need to let them bail themselves out. Your job as their accountant is to give them a bucket without holes in it, perhaps even a bigger bucket. Your job is not to sit in that sinking boat and bail.

If you have a hundred businesses in dire straits, but three of them (who also happen to have the least amount of employees) require almost full-time attention to rescue at the expense of the others, who do you tackle first?

You tackle the other ninety-seven first. Or, maybe, tackle ten or twenty, then address one of the problem businesses. Then another twenty of the “quick-fixes”.

Perhaps you’re tired as an accountant because you’re sitting there bailing water out instead of giving advice on how to do it.

Call a daily timeout, install boundaries

Call a daily timeout, install boundaries

Again — it’s tough.

Some business owners might find it difficult to call a timeout for various reasons:

  1. They’re afraid to lose a big client.
  2. They’re genuinely concerned for the client’s welfare (the more usual concern amongst professionals).
  3. A combination of the above.

But your accountancy firm is also important. If you go down, your clients will likely be able to find another accountant — the accountancy industry is glutted. But you won’t have anywhere to turn.

There’s a difference between working late into the night to help the occasional client, and never calling a timeout.

We’re professionals. Work must be done, and it is rare to find a pro who never works after hours during stressful times.

But that doesn’t mean your clients need to have your personal mobile number, WhatsApp number and a direct 24/7-line to call you at their whim whenever they want to.

You need to call a daily timeout for your emails and your business calls.

Part of the problem is that WFH has blurred the lines between what is work and what is play. It’s vital to define these boundaries. Although it’s not possible for everyone, try and ensure that your home office space is located somewhere else from your family/relaxation space.

There are phone apps around that block notifications/usage of other apps after certain hours. Decide that there will be no more work, say, after 20:00 and stick to it.

Then spend time with your family, a good book, or just sitting on your couch and recharging. In this day and age, it’s crucial to work smarter, not harder, and an exhausted executive is no good to their clients. Make sure you get your rest. Your service to your clients will be all the better

How Technology Is Driving Accountancy Firms into Higher Profits

For an accountancy firm to compete effectively in the UK accountancy sector, it must utilise cutting-edge technology.

I embraced this model many years ago, when I first started out in business. By doing so, I was able to implement a tremendous amount of workload-reducing procedures in my own award-winning accountancy firm at the time.

I founded We Run Your Practice when I realised that other accountancy firms could benefit from this service — making them profitable while reducing their workload.

Artificial Intelligence

Probably the most exciting advance in technology for accountants is the use of artificial intelligence in accounting.

Previously, a subject only touched upon in Science Fiction movies and novels, the use of artificial intelligence in accounting has since become a day-to-day fact.

And few accountants know about it, never mind fully leverage it!

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What is Artificial Intelligence in Accounting?

Artificial Intelligence is defined as:

“The theory and development of computer systems able to perform tasks normally requiring human intelligence, such as visual perception, speech recognition, decision-making, and translation between languages.”

Some key words pop up in that definition that should alert any trained accountant to the potential use of Artificial Intelligence in an accountancy practice.

“Decision-making” requires data. And, through the analysis of financial data for a client’s accounts, decisions can be made.

There is only so much data the human mind can process in a second. A computer can process much more than that.

And, so, we enter one aspect of the realm of Artificial Intelligence as applied to accounting.

Visual perception, speech recognition, language translation — these things have become the norm. For example, merely by inputting data into a system like Xero and QuickBooks, we are allowing that software to engage in the perception of that data.

Which Existing Systems Utilise Advanced Artificial Intelligence for Accounting?

Artificial Intelligence

There are a few new products on the market which offer advanced AI for accounting, such as the German-based company Smacc, as well as a company called Vic.ai.

But let us not look at the existing software offerings in the way we tend to view the world of a hundred years ago.

In a world surrounded by such mind-boggling technological advances as virtual reality, constant connectedness and continual communication, it is easy to overlook that we already do live in that sci-fi future only dreamed about in novels.

It isn’t so much a question of which accounting systems utilise artificial intelligence, but which ones don’t.

Let’s take a simple task which is offered by all the major online accounting software vendors: Automatically matching bank transactions to invoices.

This is a process of decision-making, which is the very meaning of artificial intelligence.

Many analysis and reporting tools also implement artificial intelligence to draw conclusions and provide visual representations of data.

RPA (Robotic Process Automation) in Accounting

The place where truly advanced Artificial Intelligence in accounting starts to shine is in a specialised field called RPA, or Robotic Process Automation.

A recent article in Blackline Magazine stated:

“In finance and accounting organisations, RPA employs machine learning techniques to monitor simple accounting tasks such as journal entries, credit notes or accrual calculations. When a result goes beyond a set threshold, RPA can initiate a solution by triggering a remediation workflow.”

There is currently no “one-software-fits-all” for RPA in accounting, that I know of.

But, utilising extensive knowledge of a plethora of online and offline tools, it is possible to emulate, to a large degree, Robotic Process Automation in an accounting firm.

By knowing how to interconnect and integrate all these various tools into one cohesive system and workflow, one can start to implement RPA solutions in one’s practice, such as:

  1. Automating secretarial work
  2. Automating scheduling for clients
  3. Automating alerts for client bank accounts
  4. Automating innumerable day-to-day tasks which consume time and reduce profits

Which tools to use to effect this RPA is an extensive subject. Indeed, a comprehensive understanding of all the potential integrations and tools available is key.

Our own understanding of this field, obtained as a result of years of work in the accountancy sector, prompted us to found We Run Your Practice, which assists accountancy practices in implementing advanced AI in their practice, and so reduce their workflow.

For a taste of many of these procedures, we provide a free ebook discussing many of these tools as well as how to implement some of them in an accountancy practice.

Summary

Regardless of the particular tool or software chosen, the thing to understand clearly is that Artificial Intelligence and Robotic Process Automation have arrived. They are here, and the most successful accountancy practices are utilising this advanced technology to decrease their workload and increase their efficiency.

advanced technology

We Run Your Practice was recently shortlisted for the Digital and Innovative Firm of the Year Award, by Accounting Excellence. Our entire firm is built on the idea of implementing advanced AI to be able to white-label multiple firms under our umbrella and assist them in turning a profit.

By utilising this advanced technology, it is indeed possible to turn a higher profit in an accountancy firm as a result of the enormous time such processes save.

Why Selling an Accounting Firm Now Is a Bad Idea

News has been conflicting regarding the UK’s bounce back after the countrywide lockdown. One day the press reports positive gains, the next it covers how the recession is all doom and gloom.

But you don’t need the news to tell you if your accountancy firm is struggling.

Whereas as the hospitality sector got a “Eat Out to Help Out” campaign, the accountancy sector got no such scheme. Too often, when businesses look to pinch their pennies, they look at their accountants — especially if those accountants aren’t in the habit of delivering “add-on” services to their usual fee income.

A business is far less likely to write off its financial advisor than its accountant. But too few accountancy practices have branched out into additional-value services and therefore plenty of firms are now in the position where they’re considering putting their accounting practice up for sale.

Selling an accounting firm — what you need to know

The first thing you need to know about, when looking to sell your accountancy practice, is that it very likely will have a reduced valuation in a post-COVID world.

The value of an accountancy practice is determined primarily from its annual fee income.

But, even if that fee income is high, it won’t take away from the fact that the economy is shaky and people and businesses are looking to save their pennies.

If your clients are primarily small businesses who don’t have to use your services, then it’s unlikely that any evaluator will consider your chances at future profitability very high.

And so your valuation is reduced.

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Specialist Services

The other problem with valuations is that they don’t take into account all the many specialist services that a lot of accountants offer in order to pad their month-ends.

Whether you offer in-depth tax advice, financial advisory functions, or even business consultation on services which are not entirely accounting, these services will not necessarily be considered “fee income” if they are too specialised.

And so your valuation is further reduced.

And then there are the priceless aspects

Whenever an accountancy owner hits the point of wondering, “Should I sell my accountancy practice?”, you know that the decision was not arrived at lightly.

There are all those intangible aspects to the business which no evaluator could ever begin to put a price on:

  1. One’s dreams of being successful.
  2. The relationships one has built with one’s staff.
  3. How those staff will survive (it would be great to give everyone an excellent severance package, but if the practice is already failing, that’s unlikely).

And what will you do once the practice has been sold? In times of such deep recession, sometimes the best option might be to stick with the sinking ship in the hopes of spotting land, not to dive headfirst into a frothing sea.

But every practice and set of circumstances is different.

How to sell your accountancy practice?

How to sell your accountancy practice

Beware the sharks!

There are numerous steps to selling your practice, or possibly merging it with another.

The ICAEW has quite some guidance on it, but none of that guidance discusses the shark in the water.

It’s a fact of life. And as much as we’d all like to believe the modern world doesn’t contain an undue amount of unscrupulous individuals in professional business circles, it is an unfortunate fact that such people do exist.

The act of buying your accountancy practice is a business transaction. Profits and losses are involved, and if you were the other party, would you try to maximise your profits or minimise them?

Whatever steps you take to get your accountancy practice ready for acquisition or merger, keep your eye sharp because you are in treacherous waters during this recession.

A better solution to selling your practice?

What if I told you there’s a better solution to your difficulties than outright selling?

Well, there is.

We came up with the business model for We Run Your Practice after a decade serving as professional accountants in our own successful accounting firms.

We had always been somewhat tech-savvy. We implemented numerous digital strategies in our own practices and thereby reduced our workload while increasing our efficiency.

We honestly thought this was the way all other accountancy practices did it, only to discover that, sadly, it was not.

Whereas our own practices were doing well, marketing intelligently on the internet, using email marketing, working efficiently, we saw that a shocking number of our competitors weren’t doing this.

It is in fact so easy to get an accountancy practice up and running in high roar if you know how to do it that we saw a business opportunity: Making other accountancy practices successful, and then taking only a small percentage of their profits as our monthly fee.

It’s a win-win situation because those practices’ profits would not be high, were it not for our intervention.

Just recently, our highly innovative and unique approach and implementations won us a position as a finalist in the Accounting Excellence Digital and Innovative Firm of the Year Award. It has taken years of testing and trying what worked and what didn’t to come up with the specific formula to turn any accountancy firm into a going concern.

Now is not the time to sell your accountancy practice.

When is the time? Well, whatever the time, do it when your practice is earning a much higher fee income, and you’re selling from the point of success, not the point of struggle.

The New Evolution of Outsourcing for Accounting Firms

Due to the extremely competitive nature of the accounting profession in the UK, many UK accountancy firms have had to add additional services to their repertoire to compete effectively with other firms.

In any industry glutted with competing companies, the only three choices left for businesses in that industry are:

  1. Offer more services
  2. Become more efficient
    or
  3. Lower prices

Lowering prices can lead to an endless downward spiral where, ultimately, services being offered are so cut-throat cheap that:

  1. Quality suffers (leading to lost clients)
  2. A company’s staff becomes overworked
  3. A company struggles to make ends meet

One choice which many accountancy firms have turned to has been outsourcing.

How outsourcing has been used by UK accountancy firms

Accountancy practices tend to outsource repetitive daily tasks such as bookkeeping, payroll processing, bank reconciliations, etc. It doesn’t take a genius to carry out these tasks, just someone to sit down and do the job.

Theoretically speaking outsourcing is supposed to offer a solution to each of the above three problems:

  1. Offering more services (while not having to reduce price too much).
  2. Becoming more efficient (because the workload is shared).
  3. Lowering prices to a degree, but not necessarily suffering the excessive workload as a result.

That’s in theory.

In practice, the matter is a little more complicated — especially in accounting.

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The problems and dangers of outsourcing accounting services

In accounting, specifically, there are a number of caveats, pitfalls and outright dangers to outsourcing accounting services.

Double-checking work

Accounting is a tightly regulated industry. Professionals are overseen and governed by supervisory bodies such as the ICAEW, the ACCA, the AIA and others.

Errors in accounting and tax returns can lead to legal repercussions for clients, and subsequently for their accountants.

As a result, the first problem accountants run into when outsourcing is that everything which was outsourced must be double-checked internally.

That doesn’t lead to a lot of saved time in the final calculation.

Data privacy

Europe’s GDPR data privacy

The second problem is this matter of Data Privacy or, more specifically, Europe’s GDPR.

Very often, outsourcing work is carried out in countries whose currencies are not that strong — typically, countries outside of the EU.

Immediately, that poses a data privacy situation which could have costly repercussions.

But even if the outsourcing company is based in the EU or in the UK, handing over personally identifiable information to any third party opens the door to abuse.

The consequences of any resultant leaks of private information would then fall on your doorstep, as it is your company which is ultimately responsible for the client’s data.

Brexit does not ameliorate this situation very much, either. The UK has its own stringent data privacy implementation under the Data Privacy Act of 2018.

And more and more legislatures are enacting data protection laws, making the subject a hot one that must be observed with due diligence by accounting firms.

In today’s global village, it is rare that an accountancy firm will only deal with UK-based clients, or that it will deal with personally identifiable information of only UK citizens.

Hidden costs

The other caveat to outsourcing is that sometimes there are costs hidden in the fine-print of services advertised by an outsourcing company.

These costs can include additional hourly rates for high-pressure jobs. (Every month-end is “high-pressure” for accountants, so you need to watch this point carefully.)

The prime benefit of outsourcing has always been its “cheapness”. If the pricing starts to go out of control, it becomes pointless to continue using an outsourcing company.

Other issues

Other potential problems with outsourcing can include:

  1. Language problems if the company’s primary language is not English.
  2. Time-zone issues if the company is located in a different time-zone.
  3. Lack of “personal touch” to accounts (which is often a key factor for “Premium Service” offerings).

No alternative solutions to outsourcing

Despite the above issues, there has simply been no other choice besides outsourcing, up to this point, for firms that wanted to remain competitive.

Many accountancy firms either continued with the regular stresses of outsourced services or reached a point where they realised that the only solution was to sell their accountancy practice.

Other problems that UK accountancy firms face

Aside from struggling to keep up with workload, the other common problem with accountancy firms is that they have difficulty keeping up with marketing and promotion activities.

Failure to market effectively means a firm will be in peril, as it will not be getting in new clients.

Problems that UK accountancy firms face

Yes, word of mouth is great, and it would be wonderful if it was the only marketing ever needed.

But it’s not.

The evolved solution: White-Label Accounting & Marketing

It was these very issues which prompted us — multiple experienced, accredited UK accountants — to start We Run Your Practice.

We saw that accountancy firms who were struggling needed two things:

  1. Reduced workload
  2. And better marketing

Outsourcing accounting work is perilous at best, and pointless at worst. If you have to double-check everything anyway, why bother?

And, without marketing, you won’t survive for long because you just can’t make it without a steady stream of new business coming in.

This evolved into what We Run Your Practice offers today: A white-label accounting and marketing solution for accounting practices.

Not outsourcing, but transparent, regulated, reliable and local accounting and marketing done under your company’s name.

It’s not outsourcing at all. It’s an evolutionary step.

We Run Your Practice Shortlisted for Accounting Excellence Award!

We Run Your Practice has just been just shortlisted for the Accounting Excellence Digital and Innovative Firm of the Year Award!

We share this prestigious position with five other accounting firms.

As announced on Accounting Web, it has been a trying time for accountancy firms — all businesses, in fact. The COVID-19 pandemic has shaken businesses to their core, leading to layoffs and mass uncertainty.

Whether we win the award or not, I am more than proud to announce that we did not lay off a single employee as a result of the COVID-19 pandemic. Why would we? We were prepared for it.

Shortlisted for the Digital and Innovative Firm of the Year Award

What are the Accounting Excellence Awards?

The Accounting Excellence Awards were begun in 2010 by Accounting Web. They recognise excellence in accounting at an individual and company level.

Now in their tenth year, the Digital and Innovative Firm of the Year Award is a new category, available for the first time in 2020.

Because of the unprecedented challenges which the year of 2020 has presented to so many firms and individuals, Accounting Web also announced three new categories for this year’s awards:

  1. Covid-19 Hero award: Accounting firm
  2. Covid-19 Hero award: Supplier
  3. Covid-19 Hero award: Individual

When will the awards ceremony be held?

Following on the spate of postponed events this year — everything from movie releases to beauty pageants and anything else that requires a gathering of people — it was only to be expected that the Accounting Excellence Awards Ceremony would also be postponed.

Voting for the software awards is still open.

Originally scheduled for September 2020, the awards ceremony has now been moved to 2 February 2021. (Their website has not yet been updated to match the new ceremony date.)

Voting for the software awards is still open, until 26 October 2020.

Our clients — fellow accountants — come first

Our philosophy is that our clients come first. And our clients are accountants and other accountancy practices.

Our very business model embodies this philosophy: The only way we make money here at We Run Your Practice is if the accountancy practice under our care is making money.

We turn a higher profit when our clients turn a profit.

Offering vital services which accountants don’t have time to do

Vital services which accountants don’t have time to do

The accounting industry becomes ever more competitive, year after year. There are over 43,700 companies in the UK classified as “Accounting; bookkeeping and auditing activities; tax consultancy”.

There are more accountants in the UK than there are hairdressers.

Not only that, but HMRC continues to tighten up laws and regulations, requiring accountants to do more work within this competitive field even though they might not be able to raise their prices.

There’s only one solution to this: exceptional marketing and a Search Engine Optimised website that is a lead-generating machine.

That takes work, and it takes time. A lot of time.

This is indeed one of the services we offer: White-label marketing for accountancy practices, and an excellent website which brings in business. It is just one of the many services we offer which is innovative.

Pioneers in innovation

Our business model itself embodies the very term “innovation”. Never before — at least not to my knowledge — has such a firm as ours existed.

We are not an outsourcing company. We are an entirely new type of business that turns outsourcing on its head.

Although there is also a tremendous amount of digital innovation that goes on within our walls, the very essence of our business is innovative.

Digitalisation

To get an idea of the sheer magnitude of digital innovation and tools we’ve implemented here at We Run Your Practice, have a look at the ebook we put together on the subject. It’s free to download, and filled with information on things you can do right now in your accountancy practice to increase its efficiency.

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Our business model forces us to innovate and digitalise

The only reason we can stay in business is that we do innovate. The very nature of the service we offer — workload reduction and profit increases for other accountancy firms — means we are forced to innovate constantly in order to stay on top of such a competitive field.

Also, because we work with so many different types of accountancy firms, we are able to see what works in some and what doesn’t. This gives us a panoramic view of the field and allows us to constantly implement best practices in our company.

Were it not for continual improvement of sophisticated systems at our offices, we would not be able to run as a business at all.

And, so, whether we win the award or not, we are confident that our entry for 2021 will be equally competitive, and filled with new elements of innovation that we might not even have thought of yet!

How to Improve Your Accountancy Firm’s Efficiency

Accountants in the UK are, too often, looked upon as staid old fogies who can’t learn new tricks. Sadly, I have found this to be true of many older accounting practices.

But even some of the newer practices fall prey to this. They look at veteran accountants, or perhaps even to the Big Four, and they see suits and ties and formality everywhere.

Yes, accounting is a formal subject, entrenched in legalese and regulations. But the world has progressed. Even much of the “older generation” is now so familiar with a high-tech world that failing to live up to these expectations of speed and efficiency can lead to people simply not hiring you.

I’m not only talking about tech here. I’m talking about how you are perceived by potential and existing clients.

Whether you like it or not, you will be compared to Facebook and Amazon and even to the local pizza place. Yes, it might sound strange, but it’s true.

Service is service. And speed of delivery is speed of delivery. And, in this world, your business must compete with all businesses in order to be considered “modern” and “with the program”. If a client receives prompt and excellent service from Amazon, that’ll be the first company they’ll compare you to if you fail to deliver that quality of service as well.

Here are some ways to change your accounting practice from a staid, recalcitrant dinosaur to a high-tech, efficient, speed-of-light production-machine.

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Delegate

First and foremost, start shedding your load.

If you want your UK accountancy practice to compete with the best of them, you need time to sit at your office and plan. You need a distraction-free environment. You need space to look at your team with a clear head.

If you are still handling individual clients’ calls yourself despite having a twenty-person team, something is wrong with your delegation.

If delegating makes you nervous, likely you are one of those executives who is totally overworked.

Believe me, I’ve been there. Pick the employees you trust the most and give them some tasks to try out for a month. Don’t come down hard on them if they don’t manage at first. Just guide them along the way.

Soon, you’ll be able to buy yourself enough time to think up the big plans and focus on the larger picture because your own personal workload is lessened.

Implement processes

Whether digital or manual, you need to have fixed processes in your practice.

“When employee A is finished with Tax Return B, place it in basket C for it to be verified by Partner D.”

That’s a crude example, but it’s a factual one. No processes in place = confusion and wasted time.

Once you get the processes in, train your staff on them.

You’ll become more efficient and have less of those “Uhm, yes, I think you made a mistake on my accounts” phone calls which accountants dread so much.

Automation

accountancy firms is automation

Now we can get really fancy!

The way of the future for accountancy firms is automation. There is so much that can be said about this that it could fill a book. In fact, it has, and you can download it for free here.

In a nutshell, almost everything in an accountancy firm can be automated. And if you get your head around how to do this, the savings on time and money can be phenomenal.

Best of all, your clients will notice the difference — they’ll see that you’re high-tech.

Drop hourly billing

Hourly billing is a thing of the past. If a lead comes to you and sees that you charge by the hour, you’re less likely to convert them into a client.

Yes, I know, it can be scary to charge a fixed price. But if you spend some time improving your accountancy firm’s efficiency, you can start to charge fixed prices without too much burden.

I’ve found that charging a fixed monthly fee works well in the long run, provided your accountancy practice is operating at top speed.

How to reduce the load of routine bookkeeping

Bookkeeping is cumbersome, slow work. Once upon a time, an accountancy firm wouldn’t dream of doing a client’s bookkeeping.

Those days are now over. Too many accountants offer bookkeeping as part of their overall service for you to ignore it.

Of course, using tools such as Quickbooks or Xero is imperative if you plan on offering bookkeeping to your clients.

Another option, however, is to outsource the bookkeeping.

Outsourcing accountancy services is tricky business. It can come back and bite you if you go with the wrong company. But it is still an option if you’re looking to reduce costs and improve efficiency.

Use relationship managers

A relationship manager

The idea that the accountancy practice’s CEO is the only one who can have a relationship with the client is completely outdated.

There are a number of benefits to using relationship managers.

  1. Matching clients up with people of similar personalities/interests can increase trust on the part of the client, thereby leading to more willingness to work with your firm.
  2. Frees up your time considerably.
  3. Gives the client the sense they are receiving “Premium Service”.
  4. Improves service overall because clients don’t need to wait for your availability when there’s a problem.
  5. Increases a client’s sense of security when working with your firm — they can simply pick up the phone and talk to someone who knows their account backwards and forwards.

The only caveat to this system, however, is that it must be assigned only to employees of the highest trust, and who are deeply invested in your firm. Although you, no-doubt, have non-solicitation clauses in your employee’s contracts, you won’t have a leg to stand on in court if your employee leaves, to start their own practice, and the client follows by their own choice.

The new accountancy practice model

Efficiency, efficiency, efficiency. It is the mantra of any accountancy practice that wants to remain profitable in this cutting-edge world.

Unless you can improve your accountancy practice’s efficiency, you’ll be stuck in the old, fossilised method of conducting business, overtaken by new, fresher firms who have embraced efficiency and better methods of doing old things.

Do the above fully in your practice and you might be surprised at just how much it improves your bottom line.

5 Easy Ways for Accountancy Owners to Reduce HR Problems

HR turnover is one of the most frustrating banes of an accountancy owner’s life. In a field where a high premium is placed on training, experience and expertise, one’s best efforts at trying to build an effective and cohesive team can be quickly smashed to nothing by a single headhunter who poaches your best staff.

As an accountancy owner who ran an award-winning accountancy practice in London for over a decade, I have found the following things to be invaluable when trying to build and train an excellent staff who cares about your business.

(Please be advised that none of the following can be taken as legal advice. Please consult a professional on all legal matters.)

1. Training pay-back clauses

Make sure that employee training contracts cover what happens if an employee suddenly decides to head over to greener pastures in the middle of a training program which your company paid for.

One thing I’ve found successful is to specify in the contract that the employer is allowed to request that all training costs incurred are paid back by the employee who left midway through training.

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2. Non-poaching and non-solicitation clauses

If you are not using non-poaching and non-solicitation clauses in your contracts, you’re headed for trouble.

In 2012, employers won a decisive victory when the UK court clarified precisely what is meant by “solicitation”.

“The court has now ruled that solicitation generally occurs if an ex-employee directly or indirectly requests, persuades or encourages clients of their former employer to transfer their business to their new employer.” (source)

But proving it is still tricky, as it might be that some clients simply remain loyal to the former employee and so move over when the employee has left.

Ways to mitigate this include:

  1. Building strong, personal relationships with your clients. Even if you have 1,000 clients, try to reach out to each one individually at least once during the year so that you, as the owner of your firm, become the public face of your company, and not an employee. Some degree of automation might be required to do this, but there are tools around which can assist with that.
  2. Forbidding employees from giving out personal contact details to clients. All business-related communication must run through the company servers and phone lines. This way, it becomes easier to provide evidence of solicitation should it ever go to the courts5

3. Avoid larger issues by dealing with them when they’re still small

But if you have to go the legal route, then things likely got ugly a long time earlier. It’s best to pick up on problems early on, rather than try to tackle them when your employee already has half a foot out the door.

I do six- or twelve-month appraisals of all my employees, utilising 360° feedback to ensure well-rounded and constructive criticism of employee performance. I also accept input from the employee, and I work sincerely to improve working conditions where possible.

Employees are people, at the end of the day. We all have ups and downs, and it’s best to find problems long before they become too large to deal with without animosity or, worse, resorting to legal complexities.

4. Social days, close-knit team, avoid office politics

Social Days

Gamification” is a well-known technique for increasing employee morale and raising production. It also builds team spirit.

But I’ve taken it a step beyond mere gamification over the years. I try to build camaraderie between team members by organising regular social days, dinners, and anything else that might assist in avoiding messy office politics.

It helps when employees are friends with each other, and organising social days is the easiest way I know to achieve this.

Sure, not everyone is going to get along, but I’ve found that the mere fact of a nice dinner or day out after a stressful week, makes many of those complicated office-style politics “magically” disappear.

5. Assign better-suited people to different tasks

People’s personalities are often separated from their technical proficiency. The world has its introverts and extroverts, its go-getters and its stay-at-home types.

But personality rarely has anything to do with someone’s skill at technical tasks. People are either good at their jobs or not, regardless of their personalities.

This applies very much to accountants who might be great at crunching numbers but terrible at talking to clients.

Instead of insisting that an employee continues to do something that they really struggle with, try shift tasks around so that the load is shared, and they are not put under undue stress.

For example, let’s say you have a tax specialist who is terrible at talking to people, but you have a new people-person who is still learning the ropes. You could get the people-person to call clients, using the findings from your expert tax employee. This way, the new employee gets a feel for the technical side of the job, and the introverted tax specialist is not made to feel inadequate because of a personality quirk.

Both are made to feel valuable in the office, and might even spark up a close friendship from working together, which brings us back to point #4 and avoiding office politics.

Summary

I try and use a two-pronged approach to HR:

  1. Avoiding serious issues as much as possible by building morale and building a team that likes working at my firm.
  2. But also protecting my company fully by implementing simple yet effective legal instruments should matters go severely wrong down the line.

This method has worked successfully for me over my very many years of business and entrepreneurship, spanning multiple industries.

How Much Is Your Accountancy Practice Worth?​

Many are the accountants who almost feel personally insulted when they discover that their decades of hard work and excellent client service are worth nothing more than 0.8 – 1.2 times their Gross Recurring Fee.

That’s what accountancy practices are usually valuated at, at the time of sale: 80 per cent to 120 per cent of GRF.

But what about tax enquiries, VAT inspections, PAYE inspections and other occasional services? These are not, technically speaking, recurring fee income services, but they do come up intermittently for clients. If your practice has 500 clients, the chances are high at least a few of them will require this kind of add-on service each year.

There are also other add-on services which many UK accountancy practices offer, such as financial advisory services. This might not be a “recurring fee” in the strictest sense. You might provide the advisory service only occasionally to any clients who look like they might be heading into financial straits.

Some accountancy practices have invested heavily in in-house professionals to up their marketability, thereby improving the practice’s viability. Surely this could factor into the practice’s final valuation?

Maybe it would, but the final estimate would unlikely go over the 120 per cent mark.

Efficient practice? So what?

The fee-based calculation seems to penalise forward-thinking and tech-savvy practices a lot harder.

If you have invested heavily into increasing your accountancy practice’s efficiency over the years, likely you were are able to charge a lower fee than your competitors and still turn a profit. This strategy might’ve been great when you were in the process of actively seeking new clients, but it isn’t so great when the time comes to sell.

That lower recurring fee adds up to a lower valuation at the time of selling.

Accountancy is a tight-margin industry. Turning a profit requires near-genius these days. The volatile environment of ever-changing tax laws, as well as a playing field which grows more competitive each year, means that many accountancy practices must charge those lower fees just to stay in business.

Not great news for the almost-retired accountancy owner, now long in the tooth, who only wants to pack up his shop and retire comfortably in Gibraltar.

It’s a catch-22 situation.

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The dream client base

And then there’s the matter of the client base.

Good businesses are built on solid relationships. If you’ve been in business for more than a decade, it’s likely you know very many of your clients personally.

People buy relationships more than they buy brands.

Will that client base stay with the company after it has been acquired by another? Did you offer service with a “personal touch” over the years?

If the personal touch is gone — you — so is the client. This can lead to a lower valuation.

It’s almost as if selling a practice is counterintuitive. Those very things which were necessary to build the practice in the first place — competitive fees, the personal touch, relationships above branding — are the same things which could lower its eventual valuation.

The dream accountancy team

The same applies to the team you have built over the years.

Will the staff remain under the new management?

If your competitive edge is based on having a team with specialised knowledge of various areas, your client base might also decide to leave if those team members are not there.

At the end of the day, you are selling a client base and nothing more. The action of selling an accountancy practice is cold and calculated.

Possibly the company acquiring your practice is indeed very human and caring, but that still doesn’t change the process itself.

The process itself of selling a practice comes down to profit margins and nothing more.

Alternative options

Business Team

One option would be to hand the practice over to a willing friend or family member who will give you a nominal fee for it but still let you retain a portion of profits as the years roll by.

This is a risky option at best if your practice is already struggling.

Then again, if it is struggling, the price you’ll be offered likely won’t be great. At least with this option, there is still the remote hope that the practice can be salvaged sometime in the future, and that you will eventually get your dues.

The second alternative available is to outsource your accountancy practice’s activities. This is an extensive subject and is not without its risks. We’ve written extensively about outsourcing accounting activities before.

The bottom line

That’s what it comes down to, isn’t it? The bottom line.

And the bottom line when it comes to selling your accountancy practice is that no price could ever match up to your life’s work, or even to the work of a few years.

Perhaps in another industry, yes — a tech startup, maybe, or the latest unicorn.

But not in accounting.

The accountancy business model is made up of fee income. One can get creative when one is in the business, marketing to clients for additional advisory functions or finding ways to increase efficiency.

But when it comes to selling an accountancy practice, it’s difficult not to get the short end of the stick.

Most accountancy owners would settle for something that, at least, doesn’t hurt their pride.

If an accountancy owner really wants to let go of the reins, and make a profit while doing it, they would need to embrace a different strategy entirely.

7 Ways to Increase Your Accountancy Firm’s Profit Margin

Accounting is a tight-margin industry. New laws and tighter regulations quickly reduce a firm’s profitability.

To increase profitability in our industry, one must either:

  1. Drastically improve efficiency
    OR
  2. Reduce costs

How to improve efficiency in an accounting firm could easily fill a book.

In this article, we will give you an overview of how to cut costs in both respects.

1. Invest in effective and worthwhile software

There is no lack of software offerings for businesses these days. The sheer enormity of offerings makes the task daunting.

But there is no doubt that the way to improve efficiency is to invest in software which:

  1. Streamlines mundane tasks
  2. Shaves minutes off every hour, and hours off every week
  3. Reduces confusion (and, hence, wasted time)
  4. Keeps the business secure (cyber attacks waste time and can lead to expensive legal repercussions)
  5. Improves client service
  6. Guarantees that the company can keep working entirely remotely should they ever need to

The solution to knowing which software to invest in is simple: Don’t try to invest in it all at once.

I’ve spent nearly a decade learning about software and which cloud tools work best to increase an accountancy firm’s profitability.

There is a lot to know.

The trick is to start somewhere.

In a recession, it’s challenging to stay calm when the need for efficiency becomes almost like the need for oxygen.

Calm or not, it’s simply impossible to implement everything overnight.

So, dedicate a few minutes a day to learning one new tool, one new piece of software. Sign up for a trial and test each software one-by-one.

Slowly, your firm’s efficiency will increase, and so will your profit margin.

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2. Increase prices

If prices are increased for existing clients, they might feel betrayed and go elsewhere for their services.

If they are increased for new clients, they might consider you too expensive and go to your competition.

Still, increasing prices is a tried-and-tested way to increase profit margins.

One way to go about it is to offer services in “packages”. You could have a Basic Package and a Premium Package.

The Premium Package would contain more services. You could propose this to existing clients and keep them on the Basic Package if they refuse, and you could offer both packages to new potential clients.

3. Reduce fixed overheads (rent)

The mindset regarding office space has changed. A recent PwC survey revealed that 25 per cent of CFOs were looking to cut back on real estate costs since COVID-19.

Indeed, keeping an office might turn out to be even more expensive than it was as a result of new government guidelines which might very well become law.

Cutting the office rental fee is a surefire way to quickly knock out substantial expenses immediately.

Still, there is a certain prestige to writing Canary Wharf on your letterhead. If you deal with top-level clients, an expensive office might be necessary to keep up appearances and so keep those clients.

This matter of fixed overheads is something each business owner must decide for themselves.

4. Obtain recurring clients vs one-off

Recurring clients

Recurring services at lower prices start paying off after several months. If you’re able to take a cut on immediate income and really serve your clients well for the long haul, the recurring fee will slowly and steadily inch up your margins.

There is always the risk that new clients leave you in the first few months, forcing you to operate at a loss for those clients. So, start off slowly to reduce risk.

5. Increase the value of your clients

Big firms pay big bucks. But they also demand six-star service.

Assuming you’ve overcome the initial setup required to even get those big clients (superb marketing, astounding service, top-notch staff, possibly even an address at Canary Wharf), keeping them thereafter is a full-time job.

Small mistakes on large firms’ accounts can lead to massive costs (for them), and lost business for you — possibly even legal difficulties.

Pulling this off requires exceptionally competent staff who have extensive experience with large accounts.

Start small. Don’t go for the biggest fish. Try get in a few mid-level ones while you build up all the necessary elements to both attract and keep larger clients in future.

6. Suppliers’ terms

Although this isn’t the easiest to effect, one way to improve margins is to try and negotiate suppliers’ terms with landlord and software providers.

This would be more difficult with software providers because software is usually provided at a fixed rate, with only minimal discounts possible.

Still, you could also look at other suppliers with whom this might be possible.

7. Outsource

In its current paradigm, outsourcing all of one’s accounting duties is a risky investment for an accountancy firm.

And yet the use of outsourcing firms continues to grow.

What is needed, really, is an entirely new type of outsourcing; one which is:

  1. Transparent
  2. Local
  3. Regulated
  4. Accountable

If an outsourcing firm fits all those criteria, it is worth looking into to increase margins.

What not to do

What not to do

Dropping wages is one option that is not recommended. It leads to a sense of betrayal on the part of employees, which in turn could bring about lower quality work and high staff turnover.

Staff who are pleased with their working environment are more willing to go the extra mile. This itself is a way to increase profit margins — by improving the quality of service on an immediate basis, leading to more referrals from satisfied clients.

Conclusion

As with everything in business, the solution lies in the long haul. None of the above can be achieved overnight.

If you are truly strapped at the moment — especially as we head now into the UK’s deepest recession in 300 years — you might want to consider some of our services to increase your profit margins.

But if you still have your head above water, the above 7 steps will put you well on your way to increasing margins if you work on them regularly and with patience.