In collaboration with Eliza Picot
CPAs are well-adjusted to working under pressure. Carrying this extra weight is part of the job. Oddly enough, boosting profitability in their own businesses is much more difficult. Thankfully, the way that companies are doing their accounting is drastically changing. With the influx of tech innovations like AI and automation, businesses are beginning to brainstorm ways to earn money while essentially working less. Read on to find out the three ways you can boost profitability for your CPA business.
1. Make the Most of Your Time
It’s a bit ironic that, being such financial experts, CPAs struggle with boosting their profitability. Most people don’t realize the complexity of calculating earnings through a service-based business. It is much more straightforward to determine profitability through product-based companies because the only elements considered are overhead and the expenses accumulated from sales. Service businesses have additional factors, which can make determining profitability challenging. It seems that an easy way out of this is to make your rates more expensive or bring in additional clients.
Unfortunately, this method is not as easy to implement as it sounds or necessarily the best move for your business. Instead, CPAs can boost profitability by evaluating services and eliminating those with less value. Determine how much time is being taken up by services and decide if these tasks are hindering productivity and costing you more than you need to be spending. Some operations can be outsourced or eliminated altogether. Bookkeeping, as one example, is a task that can be conducted in more efficient ways through an app, reducing time and costs significantly. Moreover, look for better ways to store your data. Even with steady cloud-based storage options, there are multiple ways to go about the process. Look at your processes and find areas of improvement, then set out to streamline.
2. Intrigue Current Clients
Instead of attempting to get more clients, intrigue your current clients further by advertising additional services that promote collaboration and connection. CPAs are experts at various financial necessities but often orient around one or two services. Try expanding your services by including management consulting or another financial service you don’t currently offer. Some options include payroll and auditing services. You can market your CPA services by sending out email marketing blasts announcing your new services. Customers who are already signed up to receive notifications from your website will be likely interested in the new promotions you offer for these additional services. You can also include a ‘New Services’ section and a short blog post on your website, so any onlookers will notice the changes in your company’s offerings.
3. Embrace New Tech
With all the new technological innovations and solutions, there is a lot of opportunity for your business to streamline workflows and increase productivity with a small up-front investment. Having intellectual flexibility will open your eyes to new ways of conducting business and generating a greater profit. For example, you can look into tax preparer software so you can deliver outcomes that are both quick and accurate to your clients. Try integrating AI billing to cut back on costs; you’ll gain more control over your data, workflow, and billing. You and your employees will avoid getting burned out with the additional help as well, since it will save you time and make the work easier.
The Bottom Line
While it can be challenging to earn and grow profits as a CPA, service-based businesses are just as capable of managing and expanding their revenue as product-based businesses. By incorporating these changes, your CPA business can gain greater clarity and control over your revenue and how your business grows.
About Eliza: ”After relocating from the East Coast, Eliza made a new home in Denver where she received a degree in finance. Her love for mystery thrillers is only outweighed by a desire to pick up a pen and craft her own work. Coupled with her education and years of experience in bookkeeping, Eliza’s niche offers readers useful money-saving tips and creative ways to better manage finances. Her success has landed her work in major publications and has warranted esteemed recognition amongst elite finance bloggers. Growing up in culturally-rich Massachusetts, and spending so much time as a child reveling in Victorian architecture, Eliza developed an interest in interior design at a young age. She continues to pursue this hobby when she’s not writing about tax codes, IRAs, and Real Estate Investment Trusts, and has garnered a massive Pinterest following with her whimsical inspirations.”