Tax season is almost over. For many CPA firms this is a critical time of year from a revenue and profitability standpoint. Most firm will call their tax season a success if they have happy clients and no A/R issues once the work is complete. There is a third leg to this stool – stopping the revenue leaks in your CPA firm.
There are two ways revenue leaks impact a CPA firm , the first is the failure to get right the blocking and tackling of delivering your services; the second is missed opportunity costs.
Blocking and Tackling
As CPAs we are by nature cautious, methodical and process driven. Follow the steps and you reach the desired outcome. The hard truth is our service delivery model is complex. Our clients must give us complete and accurate data in a timely matter, the regulatory and compliance environment governing our work changes regularly, and there are a variety of disparate systems we must call on to complete our work. Locking down step-by-step processes isn’t easy.
It’s not easy – but if you start fixing the blocking and tackling stuff it can make a big difference in the efficiency your service delivery, and increase your profitability. The place to start is with your fire drills. For example, when a simple process step is forgotten, like the failure to get a signature from a client or a missing form, resources are then required to triage the situation and make it right. It might only take an hour but that is an hour that is flowing out of our profits. Identify the root causes for the fire drills and put a plan together to end them!
The concept of opportunity costs is typically viewed as a binary choice – I will take this course of action over that one. In this context we define it slightly differently. It is when latent upsell opportunities exist with clients, and we fail to act on them.
If they are latent, then most likely we don’t see them. If we can’t see them, neither can our clients. Here, a better approach to data and analytics can provide the insight that is needed.
Understanding and analyzing the data you receive from your clients can help identify potential trigger events for upsell services. For example, if you see a new transaction regarding real estate is this a new opportunity for your firm to engage?
Data is not static, it tells a story. Do you know what your client’s data is telling you?