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Hello and Happy Tax Season!
I was in a meeting with a firm yesterday and a business consultant. The topic of A/R came up and the business consultant was talking about “benchmarking” receivables (what percentage it should be 0-30, 60-90 etc.) I thought to myself for a moment, “What an old way of thinking!”. Benchmarking receivables would be like benchmarking write-offs. No good!
What systems do you have in place to make sure you are getting paid before the returns/financials are filed, sent or picked up?
As a reminder, a service that is in demand has a lot higher value than a service delivered!
If we set proper expectations, price upfront and have good systems we can eradicate A/R entirely from our firms.
Now is the time!
Happy New Year!
The holidays are over and the calm before the storm of tax season is upon us. There is no better time to set your intentions for 2014 and review your goals, both for your personal and business lives.
As we have moved thru the discussion of pricing, we have talked about the need to know your WHY and what you want as you define/refine your business model.
As it relates to pricing and client selection, there is another key question you need to consider:
Is it incremental change or business model change you want? If business model, when will you do this by?
It is important to consider both the short and long term in the areas of:
*Impact to you (health)
*Impact to your family
*Capital requirements (if any)
*What will the team look like
*What will the client base look like
As the saying goes.. “Rome wasn’t built in a day.” Your plan may be one year, two year or three-whether it is price change or business model change. The key is to have a plan that you puts you where YOU want to be and take action.
Aim at something and hit it!
Hello. I presented a webinar to a group of firms last week which included a polling question asking them to respond to the question about which Profit Driver they need to focus on the most.
Interestingly, 60% (Wow!)of the firms responded we need to work on Making our Firm the #1 Client, which leads me to a question for you and your firm as you think about and prepare for next tax season:
- What practices are you employing that are Making the Firm the #1 Client?
- What practices are you employing that are NOT Making the Firm the #1 Client?
As a reminder, the best people to ask are your team members!Related article: Stop the madness! How NOT to repeat last tax season!
You may have heard me quote Ron Baker, “Do not let your bad customers drive out your good customers”. That statement is still relevant today.
We now need to be extremely mindful and action oriented that we do not allow bad customers to drive out good team members.
Let me explain.
The past 4 business days I have been contacted by 4 firms where the Partner asked me for advice regarding a team member who came to them after 9/16 (word on the street is it was very painful) and said, “Mr. or Mrs. Partner. I can’t work the hours anymore.”
Here are key variables: Read More…
I went to get my haircut last week and the stylist (hold jokes please) who happens to be the owner told me her business coach she said she “had” to work with this firm who is in Nebraska http://www.kopsaotte.com/salon-spa.
Pretty cool right? Berkeley salon owner… has a local business coach who recommends a firm in Nebraska that has a salon niche.
There are a number of things I found interesting about this…
- She completed a questionnaire (on their website) then submitted to the firm’s assistant. She did NOT see that as an issue.
- She did not care where the firm was located. “We’ll use Skype and phone”.
- Importantly, she was attracted to the focus of the firm on growing Salons….
The firm has a few niches. Please note the following: Read More…
- To succeed in the future we need to start to re-think the sacred cows (the old way to profitability is more hours and face time).
- If one of our biggest issues is time why do we continue to work on unprofitable clients (the ones where we don’t achieve our target Average Hourly Charge Rates or Gross Profit Margins).
- Your ideal firm will be easier to run than the one you are running today.
- The difference between where you are today and where you can be in the future is discipline.
- We are our own worst negotiator.
- The fish stinks from the head down.
- Real Value is in the form of communication (goals, objectives, emotions not financials or tax returns).
- Do not take what you know for granted (i.e. it isn’t basic and do not under-sell it).
- Working remotely is not diluted work. It is working. Drop the word remote.
- Team members do things for their reasons not ours.
- Perspective is hard to obtain in the office.
- The traditional ownership model is becoming obsolete.
- Partners need to stop owning the relationship.
- Need to stop viewing confrontation as negative.
- We need to evaluate where we are inconveniencing our clients.
- Clients pay dearly for what they value dearly.