Practice Management

5 Steps to a Profitable Accounting Service Practice

Written by Stephen King

At Accountex USA 2017 this year I will present the session, 5 Ways to Build a Profitable Client Accounting Service Practice. This article will provide some highlights of what we’ll be discussing there. Using our 5-step framework, I’m going to show you how to think strategically about how people drive performance and, as a result, profitability.

Stephen King will present the sessions, Smart Back Office Update and 5 Ways to Build a Profitable Client Accounting Service Practice, at Accountex USA 2017.

It all starts with “Why.” Why do we do accounting? One answer is we love it. But that’s not what clients care about. What do clients want ? Help making decisions that will make them more money.

Accountants can’t help businesses make more money just by being a normal accounting department — we need to change our paradigm. Instead of focusing just on compliance, we need to also understand the decisions a CEO must make to increase profits. Then you need to help clients get their fingers on key performance indicators (KPIs) that improve sales, marketing spend, operations, and client services. That’s how you add value and build a better accounting services practice.

Step 1: Business Strategy

It starts with helping your clients articulate a business strategy. That’s the first step to help business owners and CEOs make data-driven decisions. I’ll show you how to learn that process by walking you through how to define your business strategy — what your company stands for. That starts with why customers should buy from you and why people should come to work for you. Then you can communicate your business goals so everyone you work with understands the collective objective to be achieved. This makes it easier to digest and mark milestones for partners and employees over time.

5 Steps to a Profitable Accounting Service Practice

The first step in the 5-step framework that we will talk about in our session is strategy. Most business owners and CEOs don’t need a comprehensive business plan unless they are raising money. They do need to define their business strategy to get alignment in the company. That strategy document should include several considerations traditionally thought of as HR issues: hiring strategies, employee development and retention programs, and efforts to ensure that the right people are placed on the right teams with strategic, aligned management.

If you make money from knowledge workers, you need to align employees toward common goals and create a unified team working in the right company culture. That leads us to Step 2: Talent Management.

Step 2: Talent Management

The key is defining core values and personality traits to set the tone for company culture. At GrowthForce, it started by management asking, “Who is our best performer?” We looked at profitability of each person and team, client satisfaction, and delivery of our “client promise” and quality of the work. But mostly we looked at the behaviors that were successful.

Accounting Service Practice

John Coleman, in Harvard Business Review, defined a great corporate culture most clearly, as having these 6 components:

  1. Vision: This is the company’s purpose — the “Why.”
  2. Values: Setting guidelines for the behaviors needed to achieve the vision in order to be effective.
  3. Practice: Live and breathe these values consistently. If your people are your most valuable asset, you have to make decisions that back that up. The hard part about building a culture is making the difficult decisions. For us, it meant firing an Accounting Manager who didn’t fit, even though he had happy clients and ran the biggest book of business. Or, firing a $6,800 a month client who took out their stress by cursing at our team. If you believe your people are an asset, not an expense, your staff become more important than any one individual client.
  4. People: Recruit people based on fit and behaviors, not just skills.
  5. Narrative: Tell the story, because every organization has a unique history. The ability to craft that into a narrative is a core element of culture creation.
  6. Place: If teamwork is a core value, make the space collaborative. Whether geography, architecture, or aesthetic design — this impacts the values and behaviors of people in a workplace.

Once a business has the right people and talent management system in place, how does a business owner/CEO motivate employees to contribute “discretionary effort”? As shown in the famous Maslow’s Hierarchy of Needs pyramid, it is companies and management teams that provide self-esteem (recognition) and self-actualization (challenge) opportunities. Remember that most employees say they leave because they don’t feel they are being recognized or challenged at work.

5 Steps to a Profitable Accounting Service Practice

Recognition among peers and co-workers can have a long-term impact on employee work engagement and job satisfaction.

Step 3: Written Goals

People want a higher purpose. You give them that higher purpose when you give them targets, show them what to aim for, and give them feedback.

I’ll walk you through how the simple act of writing down your goals will get you more alignment and discretionary effort. How written goals help with belonging, helps you feel part of team. I’ll show you how to do it right and have a clear line of sight between the goal and the day-to-day work.

By working with your people and negotiating their goals, they’ll take ownership of those objectives and be more motivated to accomplish them. Some surveys say there are two hours of wasted work by the average American employee. This is how you get that time back on ways that increase profits

Step 4: Keeping Score

Operational objectives, by definition, are high-level. They’re company-wide goals. Ongoing planning and strategy are both main drivers to push a company forward and usher in growth and success. However, you must implement a constantly flowing review of strategic analysis and metrics; otherwise, the company isn’t performing at its fullest.

This is the fun part. I’ll show you how to think like a strategic CEO and the steps to create scorecards that allow clients to make data driven decisions. You don’t have to wait until September for this step. I’ve got a new CEO Guide to Keeping Score eBook  that you can check out now.

Step 5: Recognition and Reward

Remember that Maslow chart in Step 2: Talent Management and Step 3: Written Goals? I’ll come back to it one more time in Step 5: Recognition and Reward. When we think about rewards we naturally think about cash. That’s important, but not as important as Self Actualization. Self-Actualization means “the realization or fulfillment of one’s talents and potentialities, especially considered as a drive or need present in everyone.” If you recruit people who are passionate about your “reason for being,” share your core values, and believe they will be rewarded with personal fulfillment for their life’s work, you will have a high-performing team.

I’ll share the low-cost ways we have helped our staff grow their careers and fulfill their passion. And how lowering our turnover from 18% to 3% help us create GrowthForce as a profitable client accounting services firm.

Takeaway

Using our 5-step framework, we’re going to show you at this Accountex USA 2017 session how to think strategically about how people drive performance and, as a result, profitability. We’ll talk about written goals and how to track progress with the right reports.

I’m excited to share these lessons of how we grew GrowthForce to be one of the top client accounting service firms in the country.

We’ve learned what it takes to be successful and we want to share these best practices with you so you can become trusted advisors. We hope to share our experience with you so you can share it with your clients.


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About the author

Stephen King

Stephen King, CPA CGMA, is president and CEO of GrowthForce, a recognized industry leader in providing cloud-based bookkeeping and controller services for growing businesses.

From manager of accounting system design at Ernst & Young, to CFO for Amnesty International USA, to serial entrepreneur and software developer, Stephen's thirty-plus years of accounting knowledge, coupled with system and software design, led to his creation of GrowthForce. Stephen's "Software With A Service" solution combines outsourced Controller and bookkeeping services with an application development company specializing in QuickBooks integration, and is backed by a dedicated team of bookkeepers, Controllers and degreed accountants providing actionable financial intelligence. 

Regarded among the accounting industry's top thought leaders by AICPA CPA2Biz, Stephen remains at the forefront of ongoing research, development and customization of software and technology integrations to improve operational efficiencies and deliver meaningful financial intelligence to a growing number of strategic CEOs and CPAs around the globe.

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