How does your firm stack-up? - To grow your accounting firm starting 1st July may be as simple as lifting your own expectations.
A partner in a firm the other day asked me: "What level do I lift my Average Hourly Rate to? Matthew what rate do I set?"
It's as simple as deciding where you want your firm to be (not your clients nor your staff deciding for you) compared to those in your industry. Above is a snapshot of Performance KPIs for a range of accounting firms. Take a look now.
- If you want to be a "high-performing" firm as is in the Upper Quartile, then set your AHR at a minimum of $231, across ALL jobs.
- If you want to be just "Average" then set it at around $200 or less.
- If you want to to have a poor performing accounting firm then set it below $170 per hour.
The choice is yours to make not mine. (That's what I told the partner of the accounting firm).
It's funny as accountants we preach to our clients such things like "Business Improvement", "Profit Performance" and "Growing owners return" and yet in our own accounting business it's almost forgotten. Hardly a living example are we? We tell our clients to make money, to maximise returns and "cash-flow is king" yet I know a lot of accountants with their own firms who are still sitting in the "Worst Results" column on the above chart.
So here's a few questions for you:
- Where do you sit on this chart?
- What targets are you going to set yourself and your accounting firm starting now?
- Will you settle for anything less than you are capable of?
I assume you have studied accounting. I assume it wasn't easy working two jobs while you got through Uni (I had 3 jobs to pay my own way). I assume you still study now by keeping up-to-date with all the tax law changes etc. I assume you have a lot invested in your business, have loans, a mortgage and are good at what you do. I assume you eventually want to sell your share in the business for a lot (CGT Tax Free don't forget) and have a great retirement.
You are worth more. You have immense value. You are the expert. Charge accordingly.
BTW - I help Partners, Owners and Directors of accounting firms painlessly lift their firm-wide Average Hourly Rate.