Today's Technology for Tomorrow's Firm.
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November 2014 • www.CPAPracticeAdvisor.com 5 FROM THE TRENCHES How Collaborative Accounting Can Help Grow Your Practice A properly done col laborat ive accounting ofering should provide: • High client value • High proftability • Balanced work load over most of the calendar year • Repeatable monthly revenue that can be performed by non-certifed staf • Increased client retention • Increased value of your frm • Less tax deadline based work • Easier business tax return prepa- ration • In c rea sed c l i ent co n su l t i ng engagements • More fexibility to you as a frm owner/partner Tat list is a prety tall order, but if you have an interest, it can be done. Beter yet, you can do collaborative accounting for specifc niche markets and related, adjacent niche markets. Where to Start? A nu mber of or g a n i z at ion s a nd companies are promoting the col- laborative accounting idea. Included in this list are the AICPA's CPA2Biz unit, Payroll Vault, RootWorks, and Te Sleeter Group that each provide strategic planning and tactical execu- tion guidance. Product publishers that have been promoting this idea for some t i me i nc lude: A ccou n- t a nt sWorld , I nt acc t , I nt u it w it h hosted QuickBooks or QuickBooks Online, Tomson formerly with CBS and now with ACS, Wave or Xero. W hile f ully recognizing that in most frms write-up has been looked down upon and with much disdain among most partners, the opportu- nit y in this practice area can't be ignored. Usually one or two partners are sufcient. Tings are even beter if you have a rain mak ing partner, and one that loves operations as well as experienced people that prefer to setup procedures and follow them. First, set a target market for your s e r v i c e s . Yo u m i g h t d o t h i s b y looking at your existing client base, or you may choose an area where you have e x per t i se a nd i nterest . For example, medical practices such as or thopedic clinics, pediatricians, ch i roprac tors, veter i na r ia ns a nd ot her s c a n g ive you a c h a nce to specialize in your geography or at a reg iona l or nat iona l level . Ot her industries such as construction are re c over i n g n ic e l y a nd s pe c i a lt y groups like electrical contractors or plumbing contractors can really use accounting help. In certain geogra- ph ie s , non-prof it or g a n i z at ion s provide a marvelous opportunity for you to specialize. In shor t, pick a market where you have a long-term opportunity. Look at your existing base of clients as a potential start. Next, consider the ser v ices you intend to offer. We believe it is in your best interest to go ver y deep with clients including accounting, payroll, human resource and advi- s or y w or k i n s p e c i a lt y m a r k e t s concerning business issues where your accounting expertise can shine. Your sk ills and client needs might include costing , pr icing , inter na l controls, inventor y management, supply chain, marketing or a broad range of other topics. We k now you need at lea st 10 outside clients to be successful, but a target number of 50, 100 or more i s n o t u n r e a s o n a b l e . C o n s i d e r building your pricing model based on a cookbook approach, so you can read i ly quote a f lat mont h ly fee. Further, if your accounting work for a bu si ne s s w i l l m a k e t a x ret u r n p r e p a r a t i o n s i m p l e , c o n s i d e r including the tax return preparation as part of quoted fee for service. You want the client to contact your frm for every need. You can either build your frm to meet the need or you can have a strong referral network for ser v ices needed by your client base that you don't directly provide. Yo u c a n m a k e y o u r s e r v i c e ofering as simple or complex as you like, but your client facing engage- ment should have simple, fat rate pricing that can be billed in advance through ACH entries with your local bank. Firms report to us that they a re qu ite s uccessf u l at c h a rg i ng $2,000, 3,000 and 4,000 per month even to small businesses. Frequently t he w i n n i ng a rg u ment is f ra med around replacing the bookkeeper or spouse i n t hei r busi ness, get t i ng compliance right and leting them foc u s on t he bu s i ne s s t h at t he y enjoy. Usua l ly the sma l l business ow ner w ill save money by pay ing you r f i r m more i n mont h ly fee s A N D t h e y w i l l h a v e b e t t e r accounting and payroll services. Update your marketing informa- tion to provide a clear explanation of t he ser v ices of fered . Create a consistent, professional format of your ofering. Make sure to include you r w eb s it e i n t he s e re v i s ion s adding video explanations of your ser v ices. Over time, include solid c l i e n t t e s t i m o n i a l s a s r e f e r r a l information, too. Accumulate mar- k e t i n g l i s t s t h r o u g h y o u r l o c a l chamber of commerce, from repu- table list sources and other referral networks that ft your target market. M a nage t hese ef for t s t h roug h CR M products like Results CR M, S a g e C R M , M i c r o s o f t C R M , HighR ise or comparable products. Randy Johnston is executive vice president and partner of K2 Enterprises and Network Management Group, Inc. He is a nationally recognized educator, consultant and writer with over 30 years' experience. He can be contacted at randy.johnston@cpapracticeadvisor.com . By Randy Johnston E x p e c t a t i o n s f r o m b u s i n e s s owners and clients have changed. This is par ticularly tr ue with accounting sof t ware and the impact on traditional write-up services. If you have ample engagements and proftability in tax and audit work, adding a new major practice area is probably far from your mind. If you have been focusing on n i c h e m a r ke t d e ve l o p m e n t , a ge n e r i c ofering will not make sense.