10 Jan 7 Obstacles to Growing Your Practice and How to Overcome Them
Everybody wants their firm to grow, right? While not every firm will be able to join with the Big Four and see their name listed, proverbially, in lights, we all want to see healthy, sustained growth as a way to secure our firms’ positive futures.
When it comes to growing a CPA practice, there’s a right way and a wrong way to go about it.
On a daily basis, accounting professionals help other businesses determine the risks they can take. However, just because we can tell them how to grow and structure their business, that doesn’t mean our own firms have everything together, in place and perfectly aligned for unfettered growth.
We’ve identified a few issues that seem to be common for CPA firms and other business preparing for growth mode, and their solutions can be easier to implement than you think. If you’ve faced any of the issues below, you’re not alone, and by focusing on ways to mitigate their impact, you’re already on track to growing the right way.
I Don’t Have Enough Staff
It can be difficult to envision growing a firm without employing a more robust staff to keep the lights on, the gears turning and the revenue flowing in. However, there are a couple of ways to address concerns related to staffing.
First, put those accountant instincts to work and analyze your current staff makeup. If you determine you do need new headcount, which additional roles would make the most impact?
Do you need some fresh-faced and eager recent graduates who are ready to pile on the overtime and get things done? Or, would your firm most benefit from bringing in some mature accountants who are open to working part-time or flexibly while downshifting toward retirement?
Maybe accountants aren’t the problem, but you’re hindered by excessive paperwork. Look for opportunities to invest in technology that can lighten the load on your support staff and allow you to shift resources where needed.
As an example, invoice management and online payment portal technology, among other resources, can eliminate tedious processes from your support staff’s workload and can either help you free up headcount or allow some of your workers the opportunity to be more efficient and take on new challenges.
I’m Concerned About My Cash Flow
If you’re worried that the cash flow might just not be there when you most need it, you’re not alone. According to Inside Public Accounting, nearly 30 percent of the accounts receivables owed to firms outside of the “Big Four” are more than 90 days past due.
Many firms find options like fee financing to be a convenient way to keep cash flow concerns in check. Fee financing gives clients a chance to pay their invoices in a way that’s convenient to them, while at the same time, keeping your cash flow steady and on time.
How does fee financing actually work as a silent middleman to improve cash flow for your business? While your client is offered the opportunity to spread their payments over the course of three to 12 months, your firm receives its entire payment upfront.
The benefits of offering this convenience are multifold, and they may even encourage clients to increase their services and relationship with your firm because they feel so at ease with the flexible payments you provide.
I Feel Like I’m Always Running a Little Behind
Most businesses are running a mile a minute. At accounting firms facing looming deadlines, it can seem exceedingly difficult to stay ahead of the business treadmill.
One of the best ways to eliminate or decrease those feelings is to create consistent processes and create a culture committed both to using those processes and to look for ways to continuously improve upon them.
Getting your staff accustomed to new processes can feel challenging at first. Reluctance to change processes generally stems from a fear that someone’s role will be eliminated or their importance decreased.
As an example, at some firms, instituting an online payment portal for clients may meet resistance from team members typically responsible for handling payments. However, once they see the improvements in collection issues and time savings, they become the evangelists for the program and share its many benefits with colleagues and clients alike.
I’m Literally Out of Space
Office space is one of those pesky and costly overhead issues that firms have to reconcile before continuing growth.
When you’re considering whether to grow, square footage doesn’t have to tie you down. With the technology available today, your team members can work from around the globe, as long as you’re willing to put the infrastructure in place to make it possible.
You may even find some additional benefits grow from your willingness to think innovatively about your space. If you allow employees to work remotely or flexibly, their loyalty increases and so does their sphere of influence.
And, of course, as you implement new technology, you may recoup some space as you are able to automate processes and keep your office headcount low.
I’m Out of My League When it Comes to Technology
As the leader of a CPA firm, you probably receive a dozen emails a day offering sales pitches for the latest and greatest technology. You’re inundated with offers to demo everything from chatbots to data analytics software to marketing automation.
With so many promising products out there, it’s possible to spend all day every day evaluating technology and chasing after every shiny new piece of software out there. How are you supposed to determine the resources that are the best fit for your firm?
As a rule of thumb, the best technology investments will solve a problem and provide a significant improvement for one of the audiences you serve. It may be an improvement for your clients, or for your employees; the best technology will make life better for both.
Look for ways to consider the client experience. You may even take some time to talk with clients and learn which parts of their interactions with you are most frustrating.
Then, if resolving the issues makes sense from a financial standpoint, base your technology search around improving those processes and removing friction for your clients. Some good areas to start may include onboarding, payment processing and communication methods.
My Current Clients are Already Keeping My Staff too Busy
If your current clients are keeping your CPA firm busy, that’s fantastic. However, one of the best-kept secrets in the accounting world is that you don’t necessarily have to increase the quantity of clients you serve in order to grow your business or improve your bottom line.
Taking steps to deepen your relationships with your current clients can be both worthwhile and lucrative.
Many clients think accounting firms exist solely to complete their audits and keep their books in order. However, the knowledge and training your CPAs have gained may be able to fill other needs for your current clients.
Look for opportunities to develop additional service lines, whether it’s data analytics, leadership development and succession planning, or even farming out knowledgeable staff to fill a Chief Financial Officer role part-time.
When you deepen those relationships and make clients aware of all you can offer, you have the opportunity to grow their trust and improve your revenue at the same time. And, if they’re concerned about the cost, fee financing can put your consulting services within their reach without straining their overall budgets.
My Team and I Just Don’t Seem to be on the Same Page
You don’t want to put in all the effort to grow and expand your firm, then have your entire team jump ship. Before planning to go into growth mode, do some analysis of your workplace and honestly assess your capability for growth.
If you think there will be a period of high-stress growing pains, have you created a culture of resiliency and transparency to deal with the aftermath? Will your employees understand how the growth benefits them, or will they think it’s a power grab that primarily serves to make the firm leadership wealthier?
Invest time and resources in creating a culture that will withstand change and flourish as you grow. This type of culture typically boils down to showing employees that you appreciate the value they bring to the firm and being honest about the expectations you have for the future.
Phil Moore, managing partner of Porter Keadle Moore, was recognized by Accounting Today as a Managing Partner Elite and a culture maven for putting leadership development and employee accountability teams into place. If you’re planning to grow, offering resources like these can be foundational, because you’re telling your employees there’s a place for them and an opportunity for promotion within the expanded firm.
Growing your CPA firm can be an exciting and fulfilling challenge, even though there always will be obstacles to overcome. The best firm leaders will take time to assess their situation and prepare for both the internal and external factors that could affect their future success.