5 Simple Steps to ensure Uniformity across the Practice

While you may have a decent client base and you would be earning a good loyalty from clients and profitability, you may often be worried that your staff are doing enough to protect the goodwill of your practice which you have developed over years and also at the same time working efficiently. Some of the key things to ensure your staff are doing right things can be done by monitoring the following:

  1. Set Up Processes- Most accounting firms have complex processes where each individual does the entire set of work which includes things like data entry, preparing schedules, journalising, etc. If it’s and extremely small practice, this may be prudent but as your practice starts growing, you should start looking at dividing the team into various work streams such as data entry, preparing schedules, journals and then final review. You will think that there would be too many hand offs but you would be eliminating loads of risks while at the same time improving the productivity of your staff
  2. Hiring- It’s quite traditional that most people we hire come through referral or is based on likability. We generally see the overall suitability to the practice. That’s a big mistake we all make as accountants. We generally never think what processes we should have to manage the practice and what kind of people do we need to manage those processes
  3. Key Performance Area- It’s mostly seen that the appraisal process is seen as a process of giving salary hikes to employees every year. For many employees, when they join the company, they are just given a vague idea of what they should be doing but not in detail. It’s very important that you there are clearly articulated goals for each of your staff including that of admin staff and wherever possible, these should be linked to some numbers so that you remove biasness. Furthermore, it’s important that your senior staff have goals linked to revenue and profitability. Every month you should spend some time giving feedback to your staff on their performance rather than giving only at the year end. Your staff  will know where exactly to improve and your appraisal process would be a happier process rather than year end surprises
  4. Daily Monitoring- You should monitor daily the status of the work done by your staff. While it may sound to be too much of micro management, you will be surprised to know that every day of yours has no new surprises and in areas where you were struggling, those have completely eradicated. Your daily monitoring sheet may include the work in hand, status on them, expected time to complete, accounts in pipeline, etc.
  5. Checklists- Make sure your processes have checklist. These should be simple and completed at ease. These do not need to be too complicated where most of the items are marked as not applicable. Make sure all your clients work has a  completed checklist. This will bring in consistency across all your clients.

About the Author

Sachin Lohade is a Chartered Accountant and works with Accounting Firms to improve practice and reduce costs. He can be reached out at sachin@corientbs.com or you can visit www.corientbs.com for further information.

 

How can you improve your profitability

Most accounting firms make a very decent profit and generally its unheard of for any accounting firm to make losses. However, if you look at the recently published report on average revenue per partner, there is a significant variation. It varies from GBP 30K to more than 1 million GBP per customer. If your revenues per partner are less than 100K, its very important to introspect and take the right steps. Below are few steps of how you can increase the profitability

  1. Classify your clients into A, B and C Category: It’s important to divide your customers by Revenue. You should classify your Top 10% of clients by Revenue which forms more than 60% of the revenue. B Category of customers would be customers who are 20% of your size and 20% of your revenue. The C Category customers would be those which form just 20% of revenue but take your 60% of the time. You need to get rid of your C category clients or convert them into at least a B Category client.
  2. Sub Contract: Don’t just keep hiring people. You need to really plot number of hours required every month and draw up mean numbers of hours required per month. See where there are spikes and lows. You can talk to your sub contractors before hand and outsource the work when there are peaks. Wherever, there are lows, you can plan for holidays.
  3. Track the time- Track the time spent by your staff on each client. Budget the time based on the actual work and fees. Ensure the time spent on each client is thoroughly analysed. Also, compare the time spent by each of your staff on different clients. You can identify how the staff are performing and there would be several efficient practices followed by some of your employees
  4. Embrace New Technology: Do not shy away from investing or deploying technology. At times it may sound expensive, but there are really good tools and technology available in the market which can help you to bring in lots of efficiencies. You can look at simple things like developing Macros which can help you getting rid of several manual tasks
  5. Through Put Rate: Most of the accounting firms spend loads of time in following up with the clients and you would be surprised to know that there would be less than 20% of the clients where work is completed at one go while rest of the 80% of clients, there is a significant amount of rework required which eats up a significant portion of your profits. It’s suggested that you have your customised customer checklist ready for document collection. When you collect or the client drops the documents, ensure you have gone through the checklist and ensured all the documents are available. Do not start the work untill you get all the important documents or there are a sizeable chunk of records received
  6. Collections- Follow up with your customers on time. Best way to improve your working capital cycle

About the Author

Sachin Lohade is a Chartered Accountant and works with Accounting Firms to improve practice and reduce costs. He can be reached out at sachin@corientbs.com or you can visit www.corientbs.com for further information.

 

5 Simple Steps to Prepare Accounts in Record Time

At this point of year you may be thinking, why have I not looked at these accounts earlier or do I not have a right staff or shall I give up this client to some other accountant… These are really some of the Goosebumps you get facing filing deadlines. Once you are under the stress of completing the work on time you may often skip quality parameters and completely forget providing the value added services which you thought of at the start of the year.

Based on our experience of working with successful practices, we believe the best way to complete the records in real time is:

  1. Step 1- Segregate your accounts between Complex, Medium Complex and Simple Accounts. This can be done on the basis of volume of transactions, quality of book keeping , etc
  2. Step 2- Divide your team or time into these categories. This will ensure the team is completely focused on the task.
  3. Step 3- We can learn a lot from the Automobile Industry where the assembly line concept is followed. Divide your team or the work between data entry, schedule preparation, reviews, etc
  4. Step 4- As soon as the client financial year end is over, proactively chase for the records from the clients. Clients will appreciate you being genuinely interested in their business
  5. Step 5- Depending on the team allocations- Complex, Medium Complex and Simple, set out the target for each team. Your targets can be higher for simple and Medium Complex but a bit lower for Complex accounts. You will be able to complete Simple and Medium Complex accounts in record time. This will help reduce stress and allow you or your team more time to focus on completing accounts which are more complex and give the value added services your clients deserve.

In a nutshell, you will reduce pressure and stress in the office for yourself and your staff. Your clients will be happier because their work is completed on time and they will be grateful for the advice and feedback you have been able to give to improve their business.

About the Author

Sachin Lohade is a Chartered Accountant and works with Accounting Firms to improve practice and reduce costs. He can be reached out at sachin@corientbs.com or you can visit www.corientbs.com for further information.

Real time Book Keeping helping you to achieve your business goals

There are approximately 4.5 million businesses employing fewer than 250 people in the UK, providing a total of 13.7 million jobs, equating to half the private sector workforce in 2011. However, while such Small and Medium Enterprises (SMEs) are of importance, the survival and growth for SMEs is always a challenge

There are several reasons why SMEs struggle and some of the top reasons are: limited use of technology, inability to innovate, unable to get the right funding, too much work kept to themselves, inability to analyse the business financially and operationally.

A major key to the success of SMEs is to manage their books effectively. These are the key steps to ensure you manage your books properly:

  • Identify appropriate person- Identify who can do the books in your business. It’s very important that the person who manages your books understands the basics of accounting and regulatory laws such as VAT
  • Outsource It- If you do not have a right person in your office, just outsource the book keeping function to the Accountants or a Book Keeping Agency. Ensure whoever you outsource to is proactive, completes your work in real time and provides you with management reporting information on timely basis
  • Budget- Prepare a forecast, not in detail but overall, of what revenues you are targeting to achieve as well the costs that you are going to incur.
  • Review- Make sure you maintain your books on a real time basis. Review the financials against the figures you have budgeted and forecasted
  • Adjustments- Make any necessary adjustments to your business plan whether to marketing, range of products or services, etc to ensure your targeted revenue is achieved. Ensure your expenses are maintained below your budgeted figure.
  • Analytics- Try to measure your business on Key Performance Indicators. If you are in retail business, some of the examples can be ‘what is your average revenue per customer? What is the footfall during morning, afternoon, evening and holidays? etc.  Based on the analysis make any necessary changes to your business.

About the author

Sachin Lohade is a Chartered Accountant and works with SMEs in providing book keeping and management accounting services. He can be reached out at sachin@corientbs.com or you can visit www.corientbs.com for further information.

5 Steps to Real Time Accounting

A lot is being heard about the introduction of ‘Real Time Information’ for PAYE, but it doesn’t end there. ‘Real Time Accounting’ is here too and growing fast. The advent of Smartphones and tablets means we are getting used to having instant access to data wherever we are with an internet connection and accounting information is no exception.

Your clients will be excited by hearing of ‘Real Time Accounting’ and will want it without really understanding what it means. There are lots of ‘Cloud based’ solutions and if you are looking to provide this service for your clients you may even be getting bogged down with all the different options.

There is not a simple ‘one fix solution for all’ so here are some quick tips on how you can provide real time accounting and also help your clients comply with the real time issues of real time accounting.

1. Choose the right software.

There are several online tools which are available in the market including Amoeba, Xero, Kashflow. Each of these tools have their own benefits and shortcomings.

Before you choose, please check which software provides the right modules for each clients specific needs.

Some of the important modules you should look for are whether they have a Document Management System, Workflow, customised Analytics, etc.

2. Set Up Processes

Once you have chosen the right software, you need to lay down a simple and sleek standard operating process. This will specify how you capture your payables, travel and expense, sales invoices, etc

3. Decide Frequency

Decide on the frequency in which you need to provide reports. Decide on whether these should be daily, weekly, monthly, etc

4. Design Reports

Sit down with your client and understand from them what really drives their business. It’s important to capture business relevant KPIs and publish them regularly. It’s also important to benchmark some of the costs and other KPIs with industry benchmarks

5. Follow Month End Process

While you may keep getting information from the client, it’s important to follow the hard close for the month end. You should complete all the reconciliations, provide for accruals, etc. This will help you to compare monthly performances, etc

There are several benefits from real time accounting. In this world of email and internet, businesses are changing rapidly and it’s essential to be aware of how the business is performing. Embracing technology at times can make a business as vulnerable as those who avoid it.  It’s very important to be on top and keep tracking the performance of your business to drive both yours and your clients business to the next level.