5 practice management tips

This article was current at the time of publication.

For many accountants, client billing, healthy cash flow, and software compatibility are regular issues that impact practice management and success.

Co-principal of G2 Accounting David Giffard FCPA and his eight-member team decided to shake up a few simple accountancy processes after realising the power of redesigning the business to suit the needs of the firm and those of its clients.

An accountant for 22 years, Giffard says he values straight talking and the company’s website tells it how it is, with a bit of humour thrown in. 

Lesson one: Be transparent with clients

For clients – mainly tradies but also small-to-medium enterprises ranging from jewellery to providore services – the business wanted to offer 100 per cent transparency on fees and practices.

A bit of lateral thinking has not only improved the way G2 Accounting handles accounts but smoothed out revenue ebbs and flows and won new business.

Giffard says it’s a win-win for clients and the firm: “Our new business model has delivered improved efficiency, which means most of compliance – annual tax and BAS statements – can be completed in around six hours, so there’s more time for other advice or we’re able to increase profit.”

Lesson two: Get rid of hourly billing

Giffard has found that in his practice, hourly billing isn’t for him. “I’ve never liked the way some accountants bill by the hour,” Giffard reveals. 

“The fact you charge more because you take longer doesn’t always mean the work is worth more, or that clients feel like they’re getting value for money. 

“The hourly model is most lucrative when it’s based on inefficiency.”

For all new clients, Giffard and his team review the work needed and decide what it’s worth.

“We don’t do time sheets at all, which means it’s very important for us to be across what the job involves,” he says. 

“Once we’re familiar with that, we pre-quote and fix the terms and fees.”

Giffard says time for any queries from clients throughout the year is built in.

“We let people come in as much as they like if they want to ask questions or need advice. That creates a closer relationship and we’ve found clients don’t take advantage of it.

“It also eliminates a one-off bill for making a phone call to ask us, for example, about the tax advantages of buying a new vehicle. 

“The fact that a client may be billed $4000 a year in accountancy fees doesn’t bother them. It’s a bill for $75 for asking a question that they don’t like.”

To keep pace with inflationary costs, all contracts have a standard, 4 per cent annual increase in the fixed fee.

“If someone is changing accountants, they may worry about what it costs,” Giffard continues. “Our online calculator provides an estimate of fees based on business size.”

Lesson three:  Quarterly billing

When the practice started in 2010, billing was annual.

“By 2012, that was untenable if our stream of income was to remain relatively consistent,” Giffard explains. “We decided to bill quarterly then, later, went monthly.

“Our cash flow is good and instead of the 70 days it used to take on average for a client to pay their bill, we’ve reduced that to three days.

“What we have found is that it is also much easier for clients to pay a monthly direct debit than pay in one go, especially if they are not sure what the bill is going to be. 

“We pick up a lot of clients like that. No one likes getting a bill shock at the end of the financial year.”

Lesson four: Standardise client software

G2 Accounting was early an early adopter of cloud-based software, which every client now uses. 

“If they’re not familiar with our software, we get them in for a training session with our bookkeeper,” Giffard adds. 

Making sure software is compatible saves everyone a lot of time and, as Giffard notes, the firm is always trying to automate more functions to improve efficiencies.

“During COVID, when JobKeeper was announced, we built a spreadsheet into our software and were able to pre-qualify all our clients in two days. 

“What that meant is that we did not get hammered by call after call when clients who needed financial assistance were trying to qualify for the payment.”

Lesson five: Customising income goals to clients’ aspirations 

“Accountants often assume the people we deal with want to make more money,” Giffard summarises.

“But their goal might be to have more time off. By finding out what is meaningful for them, we’re able to model their goals and advise them on the best way to [realise them], even if that means earning less.”