Would you like to earn the income you’re worth and still have time to enjoy it? Of course! It might sound too good to be true, but I promise—it’s not. If you’re motivated to implement the following advice, you will see results.

Consider your role as an accountant:

1. You’re good at numbers. You bring valuable and necessary skills to your clients.
2. You need to be your clients’ trusted advisor. Are you?
3. You can guide your clients to create successful businesses.
4. The income you earn is probably less than the smarts and value you bring to the table.
5. Just being a record-keeper for your clients will not change lives. If you want to implement real change for yourself and your clients, you can change lives — yours and theirs.

Working “In” or Working “On” Your Business

Most accounting firm partners spend too much time working “in” their business, rather than “on” their business. Working “in” your business means doing anything that keeps the business running, such as client work, management, and any administrative or human resource-related tasks.

Working “on” your business refers to your work on business and product development, leadership, sales, etc. These tasks will help you grow and expand your business.

Ideally, partners should operate on a 30/60/10 model. In other words: 30 percent of your time is spent “in” the business (high-end client work), 60 percent is “on” the business (sales), and 10 percent is spent on leadership.

Profit Time Index™

To be more than just an accounting practice, but also a successful, thriving business, you need a high “Profit Time Index” (PTI). Determine your firm’s PTI by taking the profit before partner salaries and dividing it by the number of “in” hours worked by partners. Most accounting firms have a PTI of $100 - $400. However, I know of a sole practitioner firm that makes $6 million a year, in which the owner works 600 “in” hours a year and has a Profit Time Index of $10,000. This very high PTI indicates that this firm is running a profitable business, rather than just practicing the work of accounting.

Less Work

To achieve a high PTI, firm partners must do the work of giving themselves less work. Many firms are too partner-dependent — the partner essentially is the business. What you want is a business that you build and guide that functions well even without your hour-by-hour input.

Where Do We Start?

If you want greater freedom and meaning in your work, and a better lifestyle along with it, you need to assess your firm’s current situation. Start by measuring areas such as average hourly rate, efficiency, number of clients, fees per client, revenue, profit, cash, and Profit Time Index. Determine where your firm needs the greatest change and follow the profit time program outlined below to implement the necessary changes. The speed of your results will depend on how quickly and effectively you choose to implement.

How Do We Implement Changes?

There are four main areas of change that your firm should address:

1. Fix
2. Minimize
3. Scale
4. Lead

Each of these four areas has eight key elements. Use these to assess your firm and to determine what needs to change for your firm to accomplish a higher PTI.

Fix

1. Pricing — Price upfront and increase rates.
2. Value pricing — Price projects based on value rather than an hourly rate.
3. Recurring revenue packaging — Offer additional value services to your customers, such as meetings, phone calls, advisory services, etc., and provide these services as an ongoing package.
4. Manage scope creep — Stop doing extra work for free.
5. Lock-up reduction — Transition your clients to recurring revenue packaging and eliminate “work in progress” and accounts receivable.
6. Client mix — Only work with A class clients.
7. Client service program — Your client service should reflect the reality that clients often can’t judge the technical aspects of your work, but they do know how they want to be treated.
8. Communication process — Have a plan for how often you will communicate with your clients.

 Minimize

1. Workflow management — Don’t let your clients dictate your workflow. Operate with deadlines and a workflow plan.
2. Client excellence coordinators (aka, administrative workers) — Hire more administrative team members to efficiently and cost-effectively handle administrative tasks, rather than paying partners/accountants to do the same.
3. Time budgets — Price up front, and then work efficiently with a low time budget in mind, not a financial budget.
4. Technology — For greatest efficiency, determine what accounting systems your clients use. The most efficient approach is pure cloud, integrating your client systems with yours. A ‘hosted’ solution is not a cloud solution.
5. Systems and processes — Determine the fastest way to do everything, document it, and do it.
6. Learning and development—Teach your team to work more efficiently —not cutting corners but delivering the finished product with efficacy. (Pricing up front motivates team members to work efficiently as opposed to the old system of working and charging by the hour.)
7. Partner time — Increase partners’ capacity by aiming for the 30/60/10 model — 30 percent of your time “in” the business (high-end client work), 60 percent “on” the business (sales), and 10 percent on leadership.

Scale

1. Brand development — What does your brand say about you? Is your digital presence up to date and does it clearly communicate your firm’s expertise?
2. Client goals documented — Document each of your client’s goals. Align those goals with your products and services. Where necessary, connect your clients with other professionals to help them achieve these goals.
3. Find opportunities — Practice looking for additional work in the current project.
4. Niche markets — Which clients do you want to serve? Have you narrowed your focus to a niche or are you trying to be all things to all people?
5. Lead generation — Actively generate “A” class leads.
6. Productization of services — Document how you are serving your clients and create products that you can efficiently reproduce for future clients.
7. Sales process and skills — Many partners are at the firm for retention reasons, rather than good business reasons. Are your partners there to lead the firm in sales and business development?
8. Maximize your people — Utilize people in each of the following areas: onshore (sales, advice), offshore (back of office/administrative marketing), and outsource (freelance).

 Leadership

1. Vision, mission, and values — Identify your firm’s purpose and focus so your whole team can work toward the same goals.
2. Organizational structure — What is your operational structure? Who reports to whom?
3. Operational plan — Prepare a one-page plan you refer to every week to stay aligned with your goals and moving forward.
4. Reporting and accountability — Do you have a plan in place?
5. Team culture — Be sure you have a team of A-class players. To assess your current team, ask yourself: Would you enthusiastically rehire them?
6. Team performance — Are you getting the best out of your people?
7. Themes and celebrations — Take time to celebrate successes.
8. Meeting rhythms — More meetings but less time per meeting and with a different meeting structure.

How motivated are you to earn more and work less? Your motivation makes all the difference.

Rob Nixon is not an accountant. Yet he has forged a niche to be one of the world's foremost authorities on how accounting firms can achieve peak performance. Since 1994 he has been running businesses that specialize in helping accountants run better, more profitable businesses. Over the years, Rob has trained accountants, consulted with them, coached them, researched them, and visited thousands of them—all in the pursuit of what works and what does not work. Currently his products and strategies are used by over 185,000 accountants in over 30 countries. 

You can find Rob at www.robnixon.com or email him directly at [email protected]