Why Accountants Have High Turnover But No Profit.

This is something I have been hearing more and more when speaking to accountants.

Turnovers of R200K and up but not making profit. Now the first thing that comes to mind is how?

So today I want to take a shot at why this is happening and how to fix it.

If you have a turnover of R200K then having enough clients are not really on the top of the list of problems. So we look at Pricing, Services & Expenses. Office space, staff and software, tend to be the most expensive.

Let’s break down the expenses and see what can be done.

Office space tend to be important, for a professional business like accounting the home environment is not ideal. Dogs barking and children screaming do not come off as very professional when on business/sales calls.

It is very tricky to calculate the true value your staff bring to your company even though entire fields of study have been dedicated towards it.

Let us start with the services you offer – is every single service you provide absolutely necessary to solving the clients Problem/Need/Desire? If not, drop it! There is no need to offer any services that your clients do not want/need!

Now that you have lightened the load of your employees what work are they still doing? Is the work they are doing really necessary? Is it just busy work or brain dead work? If the work is brain dead work, there is most likely software that can do that work for them!

This brings us to software and automation. The main purpose of software is to save you time and automate most of your service.

Yes, most software is expensive, but does it save you enough time in your service delivery to make up for it? Software also creates the opportunity the services a lot of clients at the same time with minimal manual intervention.

If you are still not making profit after you have eliminated all the unnecessary services and optimized your staff and software – there is only one big thing left, Pricing.

Pricing can be challenging for most businesses and accountants especially struggle with this. Charging per hour might be how you are taught but it is not making you profit!

Start charging according to the value you provide for your clients and not the time it took you to provide it.

If you want to make profit and not just high turnover start: Cutting unnecessary services, optimize your staff and software and start charging according to value!