British scientist Mary Archer said, “It sounds extraordinary, but it’s a fact that balance sheets can make fascinating reading.”
Accounting experts are storytellers. It’s their job to dig out number-driven narratives for their clients and create patterns for business growth.
But for many accounting firms, bookkeeping services might not be the first thought when planning to boost revenue. There is actually huge potential for profit by looking at your bookkeeping offerings.
Here are seven ways to make bookkeeping a profit center in your practice.
1. Get buy-in for bookkeeping
Buy-in starts from the top. Traditionally, bookkeeping has never been associated with profit. more often than not, it takes time and money to enable.
Yet, technology is making bookkeeping far more profitable. One major incentive that could start a conversation is bookkeeping’s upsell quality. It’s a great way to establish a new client relationship and jump off recurring revenue. Perhaps one of the biggest reasons tax-heavy firms struggle with finding up-selling opportunities is limited to client visits.
Some only see their clients two to three times a year. With bookkeeping and financial advisory, you’re seeing or communicating with clients on a much more frequent basis. This opens the door for more opportunities to sit down with clients, better understand the state of their business, and identify more services that can help them.
2. Define your services
Get granular. It’s important to define your value and services. Break it down into easily digestible terminology, so clients and prospects can visualize how you will add value to their business cost-effectively.
Are you a specialist in tax preparation or payroll? Get to know your strengths and how can they benefit your client base. Make it clear from the outset that these services will progress with your client’s growth.
With clarification, a client can select the correct product offering to suit their current business needs.
3. Systemize your processes
Every system is perfectly designed to get the results it gets.Donald Berwick
Whether it’s medical or financial, a well-run system is critical to success. In order to create an efficient bookkeeping process, start with the core functions rather than the clients.
These are document collection, payroll, general ledger, proposals and client engagement. All important no matter the niche.
Clients are going to need similar requirements and these core functions should be applicable across your client-base. We recommend getting all clients in a similar document process and payroll environment from the get-go.
4. Manage scope
Ensure you make it clear who owns the bookkeeping processes in your firm.
By defining scope you can manage expectations and delegate accordingly. A useful starting point is to use a scoping agreement, which outlines who’s responsible for each step of your bookkeeping service and removes any grey areas with regards to the execution and deliverables.
An example template for this agreement can be found here.
5. Define your customer base by standardizing your tech
There is a tendency to adapt your technology to client needs when really it should be the other way around. Analyze your core client base and design a system around them. Alternatively, target new customers with your existing tech stack.
Tech standardization is essential for your firm. It removes the need to constantly redefine your process for every new client. Settle on a system that works for your firm and let the right customer base come to you.
Simply put, build a model that is made to streamline and find the best-in-class apps that fulfill it. Start with a chosen accounting software and go from there.
6. Fix your pricing
Be specific about your pricing and the bundling of your bookkeeping service.
When Michele Grisdae, a Receipt Bank partner, first started her Sydney-based bookkeeping business, Rainforest Bookkeeping, she was taking in clients with multiple general ledgers (Xero, Quickbooks, etc.) and charging a range of price points.
Michele was working long days and weekends to fulfill her obligations and started to experience a personal burnout.
Eventually, she turned it around, increased her customer base and was able to hire extra staff. She achieved this by working out her target market and sticking to it. Don’t be afraid to stand your ground.
At Rainforest Bookkeeping, every one of her clients are Xero and Receipt Bank users and to prevent firm inefficiencies she turns away alternative ledgers.
7. Identify opportunities
A simple way to strategically approach value-add and cross-sell opportunities with your bookkeeping clients is to list out your core services, work out their internal processes and what they’re buying from you and others.
A few examples of value-add opportunities are:
At the next client meeting, highlight some services you can offer that would fit their needs but lean into the benefits of bookkeeping.