So you’re new to the accounting business; perhaps you’re a veteran professional tax preparer, but struggling to maintain profitability. You’re probably already aware of the potential pitfalls that can lead your company astray, but it’s better to be proactive than reactive. For financial success in your CPA firm, follow these suggestions to manage your business like a pro.
When strategizing your practice development, you need to decide whether you seek organic growth or merger/acquisition growth. The former processes one client at a time, while the latter seeks growth through the purchase of a practice or a merger with another firm. While these are not exclusive avenues, and every CPA manager should put significant focus on practice development systems and processes for long term success. Although an acquisition might give you a boost, without new client development you are going to see decline unless you acquire continuously. Whichever route you pursue, ensure that enterprise risk management (ERM) is not simply an agenda item, but something that’s embedded in your organization’s strategic decision making.
Human Capital Management
Human capital management (HCM) can be defined as a set of practices related to people resource management. HCM is broken down into three categories: workforce acquisition, workforce management and workforce optimization. The ultimate goal is to maximize the value of employees while minimizing the amount spent on them. Clients will view their CPA as the go-to person for advice on business growth, so you need to be well-versed in these concepts. However, it’s equally important to apply these strategies to your own practice. In order to hit financial targets, you need to harness your employees’ skills and talents. Human capital must be managed as rigorously as financial capital, so avoid falling short of your potential by making effective hiring and training decisions. Consider hiring a professional service to connect your payroll and benefits administration for a single, simple solution.
Tools and Technology
Implementing the correct software into your CPA business is critical for successful management. Embrace the developments in technology to free up your time and redirect your efficiency elsewhere. Companies such as Intuit offer tax preparation software for CPA firms that allow you to file returns quickly and with more confidence. Blockchain technology has revolutionized the accounting world by utilizing science to simultaneously record both sides of a transaction in a shared ledger, rather than recording the same transaction in separate, private databases. The increased trend in cloud computing has also be proven to successfully increase productivity in CPA firms. Take advantage of emerging platforms and automation to lighten the load of your management responsibilities.
As a trusted adviser, CPAs must educate business owners on how to promote their company’s growth. Apply these strategies to your own firm to showcase your services and strengths through the implementation of effective marketing. Maintaining a website and sending occasional email blasts are not enough to make your voice heard. Try to increase your social media strategies, get to the top of search results with search engine optimization (SEO), and become a thought-leader by starting a blog. Manage where you direct these efforts and be sure marketing has an allotted portion of your annual budget. With successful marketing management, you’ll set your practice apart by projecting a clear, consistent message about the value you provide.
Once you’ve directed your CPA firm into financial success, it’s time to start looking at the bigger picture. Who will take over when you decide to retire? If you don’t know, it’s time to start planning. Succession isn’t a process that can be done well under pressure or in a hurry. Future leaders need to be nurtured, clients need to be transitioned, operating procedures need to be codified, and necessary agreements need to be drafted. Make sure to plan in advance to ensure your firm can weather a switch to a new generation of leaders.
If you manage your CPA firm diligently, you’ll experience growth in revenue year after year. Keep these strategies in mind to run your business with ease.