Increase your profits by selling additional services

This article looks at ways to increase the income your accounting and bookkeeping service earns by diversifying and selling additional products and services.

Everyone’s doing it! Mergers, product development, and additional services are the “name of the game” in virtually every industry. Why? Because that’s where we find the greater profits. Services like the following are excellent companions to a traditional bookkeeping service and can be terrific money makers.

  • Loan Application Preparation
  • Income Tax Preparation
  • Payroll Preparation
  • Word Processing
  • Incorporations
  • Notary Public

There are two reasons why you should offer more than the traditional bookkeeping service:

  1. More services mean more revenues. Any fees you earn on additional services to existing customers/clients comes to you virtually free. You’ve already earned the money that you have spent finding the client. Any additional services are gravy.
  2. The ‘one-stop-shop’ concept applies here. Why do people hire a general contractor to build a home, rather than deal with the subcontractors themselves? First, they don’t know how, and secondly, it’s a hassle. The same principle exists with their financial concerns. They don’t know what needs to be done, plus they appreciate it when someone who does can remove the bother.

Traditional bookkeeping is the core to financial services. Certainly, you will offer to provide those services yourself. However, you can provide these other services, or you can sub-contract them out to others. In other words, you do not have to be an expert in everything. And, even though you contract these out does not mean they’re not profitable to you since MOST PROFESSIONALS WILL PAY YOU A ‘FINDER’S FEE’ OR COMMISSION on the service.

For instance, say that a business owner approaches you and asks for your accounting help for his business. Then he asks, “Do you do taxes?” If you haven’t prepared taxes in the past, you may be inclined to say, “No, I don’t.” Wrong! Instead, simply say, “I have an associate that is an expert at tax preparation. I’ll take care of it. No problem.”

I’m sure you would admit that the latter response sounds much better, and will provide better results than your first thought. Then, all you need to do is contact your associate.

Consider the services above, then determine which ones you can and want to do. Find associates that are interested in doing the others.

Most of these services can be performed by people you already know. For instance, you probably know a tax preparer, a payroll accountant, a notary public, and a typist. I’m sure they would love additional business. By the way, if you don’t know somebody in these areas, you can find them listed in the yellow pages.

They will gladly share their fees with you.

When you contact them, explain your purpose in calling, and ask them if they are looking for more business. If so, do they offer a discount, or “finder’s fee”, for referrals. If their answer is “no”, you probably want to look elsewhere. Not because of greed, but it is usually an indication that they are not experienced, sophisticated or networked enough to be an asset to you.

For the more pricey services like income tax preparation, or loan applications you should expect between 15% to 30% of their anticipated revenue to come back to you. For less expensive services, such as notary public, getting a finder’s fee is unusual and not enough to worry about anyway.

Provide customized accounting services

This article shows you how to provide accounting and bookkeeping services that are fit to your clients needs.

Here’s a short quiz I don’t think you’ll have difficulty completing:

  1. All things being equal, would you rather earn $45/hour or $55/hour doing accounting for a business?
  2. All things being equal, would you rather have a $250/month clients or a $400/month client?

These questions may appear to take the record for the all-time dumbest questions ever asked. But, when you are working for yourself, sometimes these are questions that beg asking – it’s a question of economics.

You might recall from your high school economics class that supply and demand drive the pricing structure of the free world. The most obvious contemporary example is the computer industry where competition has been driving the prices of computer hardware down every year. As more computer manufacturers have entered the playing field the supply has increased beyond demand, and prices have fallen, and fallen, and fallen even further.

This principle can work for or against any business — even accountants. When we specialize in providing accounting for industries where there’s high demand, but limited competition, we can find clients more readily and charge a higher fee for our services. This is putting the law of supply and demand in our favor.

Why will some businesses pay more for bookkeeping than others?

The business world is “information hungry.” Managers/Owners want the latest information on the economy, their industry, and most particularly their business — and they want it now.

Fifty years ago a business owner might have been the only “game” in town. They might have been the only hospital, car dealer, or dentist. Not anymore. With competition being what it is, business management needs to keep on top of their business more so now than ever before. If they’re not watching their business, they may not have a business to watch.

That’s certainly where the accountant comes in. Through a well-designed information system, uniquely fit to their business, the accountant can give management the information they want and need when they want it.

THE KEY IS TO FIT THE SYSTEM TO THE BUSINESS. To meet their needs we must understand their business and fit the accounting system accordingly. A contractor, for instance, driving a pickup truck with papers stashed and stuck everywhere imaginable, needs to have a different system in place, than does the local hairdresser. An automobile dealership needs to have a system that will track each car separately for both control and flooring (inventory finance) purposes.

Now, I know what you’re thinking: “Don’t all businesses use debits and credits alike?” The answer is “yes” and “no.” It’s true that debits are on the left, and credits on the right. But each business has different types of transactions and different accounts to follow. For instance, the automotive business has three accounts that are somewhat unique to that industry. Namely, Flooring Payable, Contracts in Transit, and Bank Reserve accounts.

The construction industry, particularly builders and developers, work with Jobs in Progress and Progress Billings. Manufacturing businesses must have a system in place that will track progress of raw materials and labor through to the finished product so that the owners can establish their cost per unit.

Since the universities and colleges don’t teach these small business concepts, the opportunities are great for the accountant knowledgeable about these areas. To confirm this, next time you talk with an accounting graduate ask them how “Flooring Payable,” “Contracts in Transit,” and “Bank Reserve Account” are used. Chances are very good that they won’t have a clue.

Now, before you get critical of their training or capability remember that the colleges are grooming them for the Fortune 500 — not the used car dealer. All these concepts I’ve mentioned in this article are small business issues for businesses typically employing less than 100 employees.

We recognized the value of these concepts years ago, so our course, covers all types of businesses including those that I’ve mentioned above. And the course is suitable for the beginning accountant and for the college graduate. You will even have an opportunity to do the books for these businesses and practice them for yourself before working on the real thing. You’ll find more information on our complete accounting course under Accounting Made Easy.

Well, should you specialize in a higher demand industry? That depends on your answer to these two questions. Do you want to make more money? Do you have the knowledge to work with these businesses? If your answer to both these last two questions is “yes” then you might want to consider answering “yes” to the first question, as well.

Taking Good Care of Your Clients

This article looks at a powerful strategy for increasing your customer loyalty and improving customer service in your accounting and bookkeeping business.

How can you keep your existing clients and win back ones you’ve lost? Become a client caretaker. Here are the four C’s of excellent client care:

Concern. Sincerely care about your clients’ complete satisfaction, and convey that caring in all your interactions with clients. Not only is this doing the right thing, it’s also doing the smart thing: After all, clients’ satisfaction and continued business can definitely impact your job security.

Consideration. In today’s bustling business environment, clients relish good, old-fashioned courtesy and genuine kindness. Even when you’re tired or stressed, act as though you were feeling energetic and cheerful. Your clients will appreciate your efforts.

Conscientiousness. Always do what you promised in a timely manner. This is essential to earning clients’ trust, and that trust is the key to gaining repeat business.

Cooperation. If one of your co-workers needs a hand in order to provide excellent service, roll up your sleeves and help out–even if you know your co-worker may get all the credit afterward. It doesn’t matter who gets the glory; what does matter is whether or not the clients’ needs are met completely.

What fee should you charge for your service?

This article discusses how to figure out what to charge business clients for your accounting and bookeeping services.

Make sure your prospective client recognizes the value of your services. See Why are businesses begging for my services? The most natural question next is “How much is it going to cost?”

The quickest way to discourage you is to charge too little for your services. Charging by the hour is too administratively time-consuming, and the small business clients dislike it. They prefer to know in advance how much the service will cost them, so that they can anticipate the charge and know what they are getting. You’ll need to calculate a monthly charge.

It wouldn’t be very responsible to GUESS at how much to charge each month. Either you will charge the client an unfair fee, or you won’t be charging what you are worth. A great way to assess the time-based fees involved is by the number of transactions you will need to record on average, each month. A transaction is a check, invoice, z-tape, bill, etc.

Ask your perspective client how many of each type of transaction you will need to record. The average small business has about 400 transactions each month.

Now take the number of transactions and multiply it by 50 cents per transaction and add $100 for the preparation of the Financial Statements. The average client will earn you $300 per month with 6-8 hours of work.

Then, ask them if this would seem a reasonable charge for all the benefits. If the prospective client says “yes”, congratulations on your new client.

If this person has not been pricing this service with other accountants, or does not fully understand the benefits, you might run in to objections. If it’s for the latter reason, you may have to step back and ask what benefits he thought were least valuable.

If the benefits are well understood, and he/she desires them, ask him if he might be able to get these benefits elsewhere for a lesser price.

If he plans on hiring someone, offer to help find a person. You might want to explain, however, that even paying someone a few hours each day will probably cost more than your fee. Plus, you will guarantee your work. And, they won’t incur the extra cost of computers, software, and office space.

You’re services are a bargain.

If he/she wants time to think, or is not interested, thank them graciously for their time, leave a business card, and ask for a referral.

By the way, you will get a “no”, more often than you will get a “yes.” Even the most qualified and practiced accountants will come away empty-handed more often than not. That’s alright. If you just pick up one account per week, within a short time you’ll be making a great income.

Request More Information and Tutorials here:

Accounting and Bookkeeping Tutorial

Should you use a contract for your services?

This article examines reasons why insisting on a contract may not be the best thing for your accounting and bookkeeping service.

You’ve finished your marketing presentation to your most promising potential client. They’re impressed with your confidence, energy, and offer. They’re ready to say “yes.” Do you pull out your bookkeeping service contract, or not?

In most cases, the answer is “Not.”

Most experienced freelancers have learned (the hard way) that small business owners avoid contracts – almost to the point of paranoia. They’ve heard all the horror stories where businesses signed a contract – any contract – and lived to regret it. Taking out the contract right now may kill the deal.

Not only does it put the potential client relationship in jeopardy, but you have to consider what value the contract is, anyway.

To begin with, the service contract simply formalizes your verbal agreement with the client. You can accomplish this just as well with a letter to the client, called an “Engagement Letter,” which you prepare and send when you return to your office. This one page letter, on your company letterhead, thanks the client for their time, lists the services you’re to offer, and restates your monthly fee.

Secondly, since you will pick up the set-up fee before you do any work, then request payment from the client upon delivery of financial statements, your greatest potential loss is one month’s billings. So the contract isn’t required for payment purposes, either.

Finally, since you guarantee their satisfaction, you’re taking all the risk. If they don’t like your work, they’re not going to pay for it – contract, or not.

However, on occasion a client might ask for a contract for their records, and legal peace of mind. If that be the case, here’s a contract form you can customize to fit your business and services. To download this form, click here.

 

Next Page »