Beyond your paycheck – build your accountancy practice into an asset
Article by Sanjay Swarup, Director & CEO, SKS Business Services
When establishing or acquiring your accountancy firm, you were probably focused on securing a good income. However, many partners find themselves stuck in that mindset, missing out on the broader rewards of transforming their business into a valuable asset.
A strong asset will do two things:
- provide you with professional fulfilment, work/life balance and a good income
- attract a high multiple from potential investors or buyers – in short, it is your nest egg for retirement.
What are the qualities of a strong asset?
A functional accountancy firm provides jobs, serves clients and makes ends meet. By contrast, an asset has financial stability, operational efficiency, scalability, a quality client list, a strong reputation, and a robust management team.
So, how do you get from here to there?
Step one – maximise operational efficiency and reduce costs
When you are busy helping clients employ best business practice, it is easy to forget your own advice. The following questions help you evaluate the efficiency of your three highest costs: staff, property and IT.
Are you using employees strategically?
It is common to value employees in terms of their training or tenure. However, evaluating their cost as a percentage of revenue is more beneficial.
This exercise produces better outcomes for your cost base and employees by identifying inefficiencies in staff allocation. For example, it is all too common for senior accountants to be caught up with junior tasks rather than focusing on high-profit services.
Addressing this challenge involves innovative solutions, such as assigning specific tasks to team members in cost-effective locations, as demonstrated by our outsourcing approach at SKS.
Are your premises an unnecessary drain?
The global pandemic has altered the dynamics of office space. It is useful to evaluate both the size and the scale of your premises in an era of remote work. Do you need a town centre location if your client meetings take place on video calls?
How much does your software really cost?
Asset builders proactively review software subscriptions, pricing models and functionality to ensure optimal cost and time savings.
Step two – review your fee structure
Have you fallen into the trap of giving away advisory work for free alongside routine services?
To build an asset, you must communicate which services are included in your fee structure. Strict boundaries will ensure fair compensation for your expertise.
Step three – step back to move forward
Accountancy is built on lasting relationships, many formed when you are still a junior accountant. The problem is that your clients still come to you with junior tasks ten to twenty years later.
Preventing this without damaging relationships can be easily handled with technology. A Customer Relationship Management (CRM) system will enable you to remain the main point of contact while allocating work to appropriately qualified staff members.
Step four: plan your exit
Asset builders start planning for the sale of their business early on, recognising that a strategic exit can yield the highest multiple. They understand the importance of presenting solid financials and showcasing scalable processes, a positive company culture, a stellar reputation, and a resilient client base.
Release the full potential of your business
By adopting the habits of successful asset builders, you can transform your accountancy firm into a thriving business that meets your immediate financial goals and sets the stage for long-term success, growth, and a rewarding career.
Want to know more? Head over to our contact page and get in touch or request a callback to speak to one of our experts.