Tips For Increasing The Value Of Your Accounting Practice
Do you know how much your accounting practice is really worth?
Knowing your accounting practice value will give you an idea of your current market standing. But how can you actually increase the value of your practice?
Read on for reasons why you should focus on value growth, plus five ways to boost your value going forward.
Why Boost Your Accounting Practice’s Value?
You might be looking to increase the value of your accounting firm for various reasons, including:
1. Attracting potential buyers or investors. If you want to scale your business, you may need external investment. If you want to exit your business, you must find a buyer. It goes without saying that the more valuable your business is, the more likely it is that you’ll succeed.
2. Gaining a competitive edge in the industry. A highly valued business can often be a more highly regarded business. Remember that your prospects won’t always automatically go for the cheapest option. What matters to them is perceived value – if your work to boost your business value also improves their perceptions of your firm, you could gain a competitive edge.
3. Preparing for future scalability and growth. As we’ve mentioned, attracting external investors requires demonstrating that your business is worth investing in. If you can demonstrate that you have been working to grow the value of your accounting practice, this demonstrates to potential investors, new hires and prospects that you are serious about success.
Depending on the methods you use for improving your accounting firm’s value, you may also find that you are able to scale and grow your accounting practice by focusing on efficiency in various parts of your business rather than purely focusing on new clients and additional revenue.
Operational Efficiency as a Value Multiplier
When looking into improving an accounting firm’s value, operational efficiency is an important area to consider. How does what you’re putting into your business compare with what you’re getting out of your business in terms of your people, processes and technology use?
There are many ways for accounting practice management teams to streamline processes to improve operational efficiency, but it all begins with an audit. Understanding where you are now and the processes that you already have in place can help you pinpoint areas for potential improvements.
By implementing efficient workflow systems, you’ll be able to reduce wasted resources, time and money. It may also be that your team are responsible for certain elements of the role that could easily be managed by AI or other technologies, freeing up their time to focus more on client-facing work. Digitising elements of your processes can also help you minimise paperwork, thus improving efficiency in several ways.
Empowering Your Team
How effective and efficient is your current team? Your people are your biggest asset – which is why it’s so important that you nurture them and give them the opportunity to grow.
Access to ongoing training is one of the many benefits your team members can enjoy through a dedicated accountancy membership organisation. Not only will access to training demonstrate that you care, but it will also ensure that your accounting firm is up-to-date and well-placed to handle anything that clients throw at you.
Consider including certifications as part of your benefits package, and don’t be scared to specialise: if a team member is experienced in a particular topic, shout about this to your clients and prospects. You may well find that having specialists in key areas is seen as a value-add by those looking for accountancy services.
Finally, think about how you will retain your top talent. Are there any retention strategies you can employ to encourage longevity in your team? An established team will show outsiders that your firm is a great place to work and save you money on recruiting and training new team members.
Harnessing Modern Technology
New technology may be a low priority for you – may be the cost or the perceived difficulty in setting it up or transferring everything to a new tool puts you off. The reality, though, is that tech can make an incredible difference to the value of your accounting practice.
Adopting the latest accounting software can help streamline your processes and signal to the market that you’re ahead of the game. It need not be expensive either: through the ICPA, for example, members receive significant discounts on all sorts of software and hardware alike.
Putting the right cybersecurity measures in place to protect your business and your clients will demonstrate your commitment to security and confidentiality and boost your public image. Cloud solutions, meanwhile, will mean that your team can work more flexibly and efficiently wherever they are.
Broadening Service Horizons
With the time and resources you’ll save by improving operational efficiency and adopting new software solutions, your team will have the time to take on more work.
Of course, more of the same will help to increase your value…but have you considered broadening the scope of what you do?
Consider conducting an analysis of the market to identify potential niches that you could fill. You may have a team focused on a specific sector offering specialised services. It may be that you expand into consultancy and advisory roles. A strong understanding of the market, its needs, and any existing gaps will help you determine where to go next.
Nurturing Client Relationships
No guide on improving an accounting firm’s value would be complete without a reminder of how important your existing clients are. These are the people who are currently paying your bills and providing your profits…so how can you attract and retain the right ones?
Consider what you can do to ensure high client retention rates: how can you go above and beyond in terms of service without negatively impacting your operational efficiency? Can you strive for such a high level of client satisfaction that your clients recommend you – both online and to friends, family and colleagues – and help you build a reputation for excellence?
Can you determine the factors that are most likely to make a potential client valuable in the long term and prioritise these types of clients rather than those who are of lower financial value or are just looking to use you for a single project… can you convert these one-off clients into returning customers?
By balancing operational efficiency with the careful use of technology, a great team, the right offer, and a commitment to excellent client service, accounting practice management teams will be well-equipped to increase the value of their practice. It may seem daunting, but remember: you don’t need to go it alone. Find out how ICPA membership can help.
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