When you consider the fact that we Accountants spend most of our lives immersed in numbers, it may come as a surprise to learn that there are some very important numbers many of us seem to take for granted, or in many cases, live in complete ignorance of.
More importantly, not knowing these particular numbers could be costing you serious money. The numbers I’m talking about are actually the key levers that drive your business, and by better understanding them, you will be able to use them to improve both profitability and team engagement with your clients.
So, the first key lever that you need to be on top of is the number of actual business clients ( or client groups) you have in your practice. Sounds pretty easy, doesn’t it, but the key word here is ‘business’ because once you are able to identify ‘business’ clients, you can then focus your efforts and resources more effectively.
The next number you need to know accurately is the average fee per business client. A general average is a good start, but obviously, the further you can drill down – such as average fee per year, per project, per service etc, will all add to your business intelligence and lead to a more focused effectiveness.
Why is this information relevant? Well a big part of Practice Growth is fee improvement, and if you don’t have a benchmark to work from, it’s hard to know if your marketing and engagement efforts are having a real and immediate impact on your revenues.
Next up is knowing at any given time, the number of ‘value add’ projects completed and the average fee per project. Regular readers of my blogs will know how much emphasis I place on creating value add projects for your clients. It should be your goal to create at least one value added project per major client every 6 months or so. And of course, knowing what your average fee per project will allow you to monitor your return on investment and whether all that extra effort is paying off.
Finally, it never hurts to spend some time understanding the numbers your staff are generating ‘below the line’, and by this, I don’t mean the obvious – like how many billing hours they’re racking up. Instead, I’m referring to the more subtle numbers that sometimes take a bit of digging. Numbers like how many phone calls to clients are they making per week, or how many opportunities they are identifying with client’s.
Just imagine if you worked to that 2 of your staff had an extra 90 minutes per week to spare. How would your practice benefit if that time was allocated to calling clients and having a chat about their business plans and future needs? If they haven’t heard from you for the last 3-6 months, it may never have occurred to them to consult you about their latest business project.
With the number of sophisticated and ( reasonably cheap) Customer Relationship Management (CRM) software products available on the market these days, there is really no excuse for not having these numbers readily at your fingertips .
If you’d like some advice on sorting out your customer data base, or some ideas on how you can better engage your clients through the provision of value add services, please feel free to contact me for an obligation free chat.