Accounting and Bookkeeping – Tips to Improve Profitability and Productivity

The number of bookkeeping, accounting, and auditing professionals employed in the US amounts to 1.44 million. In 2020, the accounting industry generated  110 billion US dollars in revenue.  

That’s huge! 

But, here’s a question for you if you are an accounting professional or a CPA firm owner. Do you really feel you are doing enough or think your firm can earn more revenue if it takes specific actions such as outsourced bookkeeping? The pandemic has upended the best-laid plans of numerous firms, and with vaccination in full swing, it is fair to say we are poised to coming out of it soon enough.  

This is the time when firms need to make certain decisions that can boost productivity and profitability over the long term.  There are plenty of firms out there (many of them are your competitors) who used the challenges they experienced in the pandemic to pivot.  

If your firm’s taken a hit in the pandemic and continues to do so, it is not easy to go back to being the successful and seamlessly managed firm you were before. But, it is imperative that you think of the future and slowly starts baking resilience into your firm. Think of this as a perfect opportunity to prepare an action plan that will fend off any challenges you will encounter in the future. 

Do you straight away hit the ground running with bookkeeping outsourcing work in India? No, you don’t. Adopt a strategic approach.  

And, here is what you got to do: 

1. Harness Technology 

Your firm must ride the crest of the technology revolution running through the accounting industry. Don’t think of digital transformation as a buzzword but weave this concept into the process fabric of your firm.  

The Cloud has become a key enabler of tech-empowered accounting transformation.  

Some of the challenges that accounting and bookkeeping firms face are legacy processes, human errors, task duplication, and perennial lack of process streamlining that increases TAT. The answer lies in using technology to drive better accuracy and process efficiency. The use of cloud accounting software was already picking up steam pre-COVID but has seen renewed focus post-COVID.  

Why are we making cloud-based technology such a big deal? The answer to this question lies in accessibility. The Cloud has made it easier for even the smaller CPA firms to access the best technologies to automate and speed up their accounting processes. Technology adoption is not the expensive process it was a few years ago. Moving to the Cloud has helped firms benefit from the same cutting-edge accounting technologies that the top firms benefit from.   

Something else impacting how accounting firms function is the convergence of Big Data, Cloud, and High-Speed Internet. Accounting firms need to use a considerable amount of structured and unstructured data to make informed decisions for their firm and offer ROI-driven strategic advice to their clients. This data can only be crunched, assessed, and analyzed with big-data tools available on the Cloud and accessed through the internet.  

Source 

The above figure tells us a story, a good story.  Digital transformation in the accounting industry is high. 97% of firms are reinventing their work process with digital transformation, but budgetary concerns remain an issue. This can slow down the pace of tech adoption, and while this is a challenge, it can be addressed with outsourcing. One of the benefits of outsourcing bookkeeping and accounting is gaining immediate access to advanced accounting technology without breaking the bank. 

2. Personalized Services 

Cookie–cutter accounting and bookkeeping services are passé. What clients are looking for are a wholly satisfying customer experience and a customer–first mindset. Now think very carefully before you answer this question – does your firm offer the kind of experience that clients expect from you. 

Take your time. But answer this question honestly.   

The foundation of personalized service is built on a client service plan.  

The first step is to sit with the client and chalk out a plan by asking the client about their expectations from the firm. These expectations are based on the client’s estimates about their goals and growth targets. This estimation enables them to identify the kind of services they are looking for from your firm and gives you critical insights into the type of services that are meaningful to the client. You, therefore, have an obvious roadmap in front of you in terms of the services you should add to your portfolio if you want to satisfy your existing clients.  

Say you are offering tax preparation services, but in your interactions with clients, you realize the client will need tax advisory services soon and also want help around personal finance. You can add this expertise (if you don’t have it already) to your portfolio. 

But there are two elephants in the room, which must be addressed.  

Lack of time and talent.  

First, you might be short-staffed so much that you don’t really have the time to reach out to clients, sit across the table, and understand their needs and requirements. Secondly, even if you do all that, you still might find it challenging to add the right talent to your team, as the accounting industry suffers from talent shortages.  

Source 

Take a look at #5 in the above image. Yes, accounting and finance jobs are in the top ten list of jobs that are difficult to fill.  

What’s more, you also need to take a good hard look at your bottom line. Can you afford to add staff to your team? What if you can’t afford all the overheads associated with hiring an accounting professional? Do you give up? No, you don’t. Instead, you explore the prospect of working with a provider who offers outsourcing accounting and bookkeeping services., This step will add the much–needed assistance to your firm’s services portfolio or free up the time of your internal staff so that they have the time to offer strategic, personalized accounting services to your clients.  

3. Leverage Outsourced Bookkeeping for Accountants 

Here’s the thing. There are times when you are caught up in work that doesn’t pay well, and you cannot say no. But, it’s taking up a lot of time that can be spent elsewhere in high-margin work.  

In such cases take a step back, analyze and get somebody else to do this work for you. It’s easy. Get in touch with a reputed accounting outsourcing provider, sign up for a flexible engagement model that works best for you, and that’s it. You work with accounting and bookkeeping experts, benefit from faster TAT and save on your bookkeeping costs, meaning you earn money on your bookkeeping services or any other low-margin accounting tasks. What this also means is that you are saving a lot of time that can be spent on revenue generation activities.  

But can I trust outsourcing? How can I share sensitive financial data with a third party? What about data security? All these are good questions to ask. And the answers lie in the outsourced bookkeeping services in India that you choose. Pick a services provider who is SOC 2 Type 2 compliant, which means you have the assurance that your data is highly secure. More importantly, work with someone who subscribes to strict SLAs that guarantee peace of mind.  

4. Stop Getting Overwhelmed  

Peace of mind. That’s the need of the hour. How does this particular state of mind, result in better productivity? Yes, you might be saying to yourself, “I am working from home these days. I am actually at peace because I don’t need to worry about work-life balance and peace of mind,” but you do.  

Count the number of hours you are giving your work. You might be spending more hours working from home, than you were, while working from your office.  

But let’s not talk generically. Let’s think of this aspect from the purview of accounting firms. One of their busiest seasons is the tax season, wherein they battle overwhelming work schedules to prepare taxes on time. This is the season that many firms want to exploit for generating more revenue, provided they get more work done. So they stretch themselves to their limits. If you are a part of one such firm, you will need an answer to this continuing problem. 

The answer to this year-on-year challenge is ensuring your firm can scale up when you need to get more work done. But this is not limited to tax season alone. What if your firm needs to handle more bookkeeping work? Can you say no to a client? You cannot. Short of getting overwhelmed, what is it that you can do to handle all the excess unplanned work coming your way? 

Simple answer – you scale, and you scale quickly. But, again, this is only possible if you take outside help in the form of bookkeeping outsourcing work in India.  

5. Market Your Firm 

Firm profitability is a direct outcome of the amount of work your firm does. According to a Hinge Marketing survey, the median rate of growth of accounting firms is 9.3%, which is at the lower end of the scale.  

This is a problem.  

Do you know what’s the difference between high and low-growth CPA firms? A key difference is marketing. The latter are gung-ho about marketing. They make it a point to not just craft services that suit the needs of their target market (we have talked about personalization earlier in the article). Still, more importantly, they go out there and spread awareness about these services to the right audience. The messaging is such that it hits the right spots and makes prospective clients want to know more about the firm’s services. This drives client acquisition, which generates more revenue, which in turn increases profitability. 

So, market those excellent accounting services you are offering businesses.  

Conclusion 

Productivity and profitability are hand in glove with one another. You could say profitability is directly proportional to the productivity of your accounting firm. But it’s not as simple as that. As a firm owner, you will have to make the right decisions to drive revenue, and when work does come in, you need to be well-prepared to handle this work. Also, this work needs to be dealt with zero compromises on quality.