How to Scale an Accounting Firm Using Practice Management Technology
How to scale an accounting firm is obviously a hot topic for managing accountants and CPAs. Scaling your accounting practice allows you to generate additional revenue and increases your ability to serve more clients, more efficiently. However, while many practitioners immediately equate scaling their practice with expanding their team and service offerings, this is not the only — or best way — to grow your accounting business. The simplest way you can start to grow is by implementing practice management technology that can help you scale more systematically and cost efficiently.
Use technology to grow your accounting practice
Here are six tips you can use to better understand how to grow your accounting firm using cloud-based practice management technology:
1. Set goals
You can’t begin to efficiently grow your accounting business without first setting clear objectives. Before you start investing time, money and other resources into scaling your accounting practice, you need to understand what specific goals you want to achieve. For example, how much additional revenue do you hope to add to your bottom line by scaling your practice? Which kinds of clients and how many of them do you want to serve? These, and other key considerations should be part of your planning.
2. Benchmark key performance indicators
It’s impossible to know how to maximize your firm’s profitability and revenue if you don’t know where it stands on key performance metrics. The following metrics are ones you should consider tracking you as you look to scale your accounting firm.
Operational KPIs such as:
- Staff capacity and productivity
- Workflow turnaround times
- Cash flow (AR net 30,60,90)
- Profitability per team member
Client-Centric KPIs such as:
- Client profitability
- Services per client
- Client retention rates
- New client growth
- Average revenue per year per client
Reports detailing these KPIs are all available to you with a cloud-based practice management technology such as Office Tools. This is another reason to think about using technology to scale your practice first, before adding other resources to your firm’s operations and cost structure.
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3. Understand how scaling your firm will impact your client service delivery
While many firms attempt to sell themselves on the service level they provide, it is often a superficial premise that breaks down when client expectations fail to be met at some point in the onboarding or service delivery process. As you grow your firm, the risk of this happening increases dramatically. This is why having a centralized, digital practice management system that allows you to comprehensively track, analyze and report on your client service touchpoints and your firm’s operations is critical.
4. Evaluate the tools you need to scale efficiently
Scaling your accounting firm means so much more than just adding clients and more staff members. It also means having the tools to support the growth you are seeking. For example, Office Tools provides comprehensive practice management capabilities and features such as client contact management, efficient workflow, secure document management, e-signature and robust reporting. This type of practice management platform will allow you to organize client data, track your workflow efficiency, and monitor staff productivity—all of which will determine your ability to scale your firm effectively.
5. Map out workflows for new service opportunities
Another key part of growing your firm is detailing how the data and details associated with each service, task and team member should ideally work within your firm so you can maximize revenue and operational efficiencies. This is where practice management technology comes in—allowing you to have a centralized system for managing client workflows and monitoring their efficiency as well as your team’s productivity.
6. Determine any additional staff members you may need to add
As mentioned at the beginning of this article, when thinking about how to scale their practice, many firm owners immediately jump to expanding their employee count. This should actually be the last step in your plan to grow your business. In fact, having a cloud-based practice management platform in place prior to expanding your team will allow you to easily track time for cost and budget analysis so you know the exact amount of time spent by each staff member on each task. This information can then be used to create profitable product pricing that will allow you to bill profitably as you scale.
The six tips above make it clear that the first step in scaling your accounting firm should be implementing a cloud-based practice management tool. Otherwise, your workflow will remain inefficient, you’ll add costly overhead, and you won’t have the ability to truly manage your growth and revenue. OfficeTools can help you avoid these pitfalls and scale your practice the smart way.