The 3 culprits holding back accountants and financial planners
As a business coach specialising in the field of accounting and financial planning, I have had the privilege of supporting numerous firm owners working towards a better business. One common challenge that I see is low profitability.
More often than not, this predicament can be traced back to one, or a combination of three causes: pricing that is too low, work that is too slow, and difficulties in saying no to non-ideal clients or out of scope work. Let’s explore these three culprits.
Too low: re-evaluating pricing
Pricing is a critical aspect of any business, and needs to be constantly reviewed. Many accountants and financial planners struggle with setting their prices too low, or not reviewing them over time, which ultimately hampers their profitability. It's important to remember that your expertise, knowledge, and the value you provide to clients is continually growing and deserves fair and reasonable compensation.
To address this challenge, start by making sure that you are working with the right clients, that is, those who value what you do and for whom you can deliver significant value to. Then develop a pricing policy that reflects the value you are adding to these clients. Make sure it covers all your costs, and provides for a healthy profit. Remember, price is only ever an issue, in the absence of value. If you would like to learn more about how Slipstream Group supports clients with communicating their value by improving pricing, check out our 12-step process, Project Uplift.
Too Slow: Streamlining Workflow for Efficiency
Inefficiency is another common culprit behind low profitability. Excessive time on tasks, redundant processes, mistakes and re-work, and the wrong work on the wrong desk can eat into your productivity and ultimately impact the bottom line. To combat this issue, it's crucial to identify where the problems are and streamline your workflows to fix them.
Start by analysing all your key processes and identifying areas for improvement. Apply the Eliminate, Automate, Outsource, Delegate, Do framework. Firstly, look for redundant processes and tasks that you simply don’t need to do – and stop doing them. Secondly, wherever possible, implement technology solutions that automate repetitive tasks. Consider outsourcing functions that can be done more efficiently by others, and can turn fixed labour costs in your business to variable costs that are only paid for when used.
Then, delegate, delegate, delegate. Structurally, move work within your office to the lowest level that can get it done. This requires a commitment to training and building robust processes that make sure everything is delivered on time, in time (i.e. in the time it should take) and right first time (i.e. mistake free, with no re-work).
I know one client who takes their team out of the business for a whole day a couple of times a year to pick apart and deep dive on how they can improve key process. Alternatively, I know others who have a “continuous improvement list” of processes that they systematically work through based on what is the next most impactful issue to solve. Whatever approach you take, you must make this an ongoing focus in your business Check out our guide to finding your (personal) capacity which can then in turn, help you to find time to work on your business ‘factory’.
Can't Say No: Selecting Ideal Clients and Managing Scope Creep
A common challenge faced by professionals in the accounting and financial planning realm is the inability to say no to non-ideal clients or scope creep. Accepting every client or taking on additional work beyond the agreed-upon scope may seem tempting in the short term, but it often leads to overburdened resources and compromised profitability.
To overcome this challenge, it's crucial to define your ideal client profile. Understand the characteristics, industries, and client sizes that align with your expertise and objectives. By focusing on clients who value and appreciate your services, you can cultivate long-term relationships that are mutually beneficial.
Furthermore, establish clear boundaries and effective communication channels to manage scope creep. Develop a process for managing change requests and ensure that clients understand the impact of additional work on timelines and costs. Regularly review and assess the scope of your engagements to prevent scope creep and maintain profitability.
By recognising these key culprits and implementing strategies to overcome them, you can unlock new opportunities for growth and success. Setting the right prices, streamlining your workflow, and selectively choosing ideal clients are pivotal steps towards boosting profitability.
Paul Little, Business Coach
Paul founded his own firm to deliver real value to clients based on trust. He extends his passion for helping clients achieve their business goals as a Business Coach at Slipstream Group.
With a background in accounting and financial planning, Paul excels in problem-solving and enjoys making a positive difference in people's lives.
“Do well by doing good” is a personal philosophy at the core of Paul Little’s professional motto. His greatest satisfaction comes from sharing what he’s learned with clients and watching them succeed.