Are you trying to scale your CPA firm? Scaling your accounting practice involves more factors than just client outreach. In fact, scaling doesn’t always mean taking on new customers. It could be improving margins to generate more profit.
Whatever your growth goals are, it’s important that you use the right strategies to get you there. Here are five ways to scale your CPA firm.
#1: Leverage Technology
Technology has come a long way in the past decade. Almost all of an accountant’s tasks are completed digitally. If you don’t have the proper technology and IT team working in the background, your firm might be met with low productivity margins.
Data estimates that CPA firms should spend between 5% and 8% of their gross revenue on software. This means that for every $100,000 you make, $8,000 should be allocated to your IT department.
Go through your current software programs and devices used. Are there software subscriptions that are unused that you can cancel? How about a laptop that could use updating? Deploying your money in an efficient way can help you add capacity to your firm and generate more profit.
#2: Track KPIs
Most accountants like to work with numbers, meaning KPIs should not be a foreign concept. Odds are you compute KPIs for your clients on a regular basis, but what about for your own firm? How can you expect to know where change is needed if you don’t have tangible data to base your decision on?
Implement a combination of qualitative and quantitative KPIs into your monthly procedures. Tracking progress between periods can help you implement actionable change to reach your scalability goals.
#3: Utilize Outsourced Talent
The advancements in technology make it easy to outsource mundane tasks that you might not have the time for. If your firm is operating at capacity, you should utilize outsourced talent. This prevents you from turning down a new client because you lack manpower. Developing an outsourced team gives you the opportunity to reduce bottlenecks and scale your practice.
Think of tasks that you or your staff might be completed on a regular basis. This could be monthly bookkeeping or general customer service. Can some of these bookkeeping tasks be outsourced? Outsourcing a portion of your workload can also result in hidden benefits, like lower employee turnover, and higher productivity. Each of these items can help you scale your CPA practice.
#4: Create Meaningful Advertising Campaigns
The methods of effective advertising have dramatically changed in the past few years. What once were ads in the newspaper have turned into social media. To grow your practice and generate more traffic, you need to understand who your target market is. Are you looking to bring on clients that are small business owners or millennials?
Keep in mind that you may have to break out of the clients you generally retain to grow your practice. For example, maybe you find that your firm is an up-and-coming area with millennials and gen z taxpayers. Are you targeting that customer base? Moreover, consider your geographic location and the services you currently offer to target the right consumer base.
After you’ve identified your target market, you will need to complete due diligence on where these consumers get their information. Are they on Tik Tok or Facebook? Finding the right advertising platforms ensures you aren’t paying for ineffective campaigns. If you notice that you aren’t gaining as much traction as you hoped, reevaluate your target market and marketing campaigns to uncover where to make changes.
#5: Offer New Services
Scaling your business relies on expanding your reach. If you only offer in-person, consider offering remote services using outsourced labor or implementing new technology. Make a list of your current services and jot down a few additional services you can reasonably offer. You don’t want to offer clients a service that you don’t have the qualifications for, as this can lead to bad reviews.
Once you’ve identified services you want to add, create meaningful advertising campaigns, identify what team members will be on these new projects, and develop a pricing structure. Working out the fine details before you add new services promotes a smooth transition in your scalability process.
Every CPA firm should have the goal to scale. Growing your practice can yield additional profit, improve financial health, and contribute to creating a generational business. Remember that your time is valuable. Is your time more valuable completing a QuickBooks bank reconciliation or meeting with new clients?
This is where outsourcing should be infused into your business, giving you the flexibility to leverage more valuable tasks. For help finding the right outsourced partner, reach out to one of our team members at Remote CoWorker. We can pair you up with the professional that fits your business needs.