Operational Efficiency: Your Unfair Competitive Advantage
The name of the game for any services based company or offering is efficiency. Efficiency dictates how many clients can be served, how effectively they can be served, and the breadth and depth of services that can be offered.
However, an under recognized reason why efficiency is critical to your success is that it also provides a better experience for both team members as well as clients. The end result internally being happier, harder working, and easier to retain team members. Externally, you have more satisfied clients, who are easier to keep, easier to upsell or cross sell offerings to, and more enthusiastic to share their experiences driving demand and new clients through word of mouth (WOM).
Below we will cover some of the ways prioritizing efficiency positively affects your business as well as highlight one of the most common challenges bookkeepers and accountants face and how to tackle it.
Revenue Per Employee
For services based companies, one of the most important metrics used to gauge the health of that organization is Revenue Per Employee. Since your most expensive cost will almost always be payroll in this type of a company, your ability to generate revenue per employee on your payroll quite literally dictates your firm’s revenue potential and likelihood of success.
If your processes are not well defined and optimized, time and effort is wasted. This in turn increases the amount of time spent on each task related to a project or client deliverable. The obvious upshot being that the more time consumed in completing tasks means fewer services that can be sold to fewer clients without adding additional team members.
Even worse, inefficient and poorly designed (or non-existent) processes lead to frustrated team members. Frustration leads to diminished work ethic and enthusiasm for their job, which then leads to even further inefficiencies as they now are less motivated to work quickly and diligently on what are already inherently inefficient tasks.
On the flip side, well designed and efficient internal operations means happier and harder working team members who are able to do more with the same limited time and bandwidth. This means that each employee is able to generate more revenue and the firm is able to support more service offerings. More complimentary offerings means more opportunities to upsell or cross sell your existing clients, a radically more efficient strategy than the expensive and difficult process of bringing on net new clients with their associated customer acquisition costs (CAC).
Mistakes & Compliance
When delivering accounting and bookkeeping services there is no margin for error. You are playing an integral role in the functioning of another business who is relying on your expert execution of your fiduciary responsibilities to deliver accurate and reliable services to them.
Inefficient and poorly designed operations open up numerous opportunities for errors, missed details, dropped balls, and inability to properly follow compliance protocols. The results of these issues can be dire. Not only does it risk the loss of existing clients, but those dissatisfied clients are likely to share their poor experiences. Worst of all, mistakes can easily land the firm and/or the client in financial and even legal trouble.
An efficient and well designed operation will always be on the lookout for areas of improvement. Since cleaning up mistakes is one of the most arduous and inefficient tasks you can undertake, identifying and fixing the root causes of those mistakes so the likelihood of them occurring again should be one of the top priorities.
Client Satisfaction, Retention, & Growth
It is critical to remember that your operational challenges do not only affect your internal team. They are almost always visible to and affect your clients as well. The most obvious and egregious example being the ones noted above relative to mistakes, unreliability, and noncompliance.
However, inefficiencies that can be as innocuous as showing up late to a meeting, being delayed in delivering a promised service, etc. are easily visible to your clients. While the impact of such small issues may be negligible, the impact to your standing, reputation, and your perceived expertise and reliability to your client will inevitably be impacted. When you’re delivering a technical service where the client is relying on your expertise, loss of faith and confidence can be deadly for your business.
Your clients want someone they can trust to do the job they have promised reliably and with minimal involvement by them. After all, your clients have their own businesses they need to focus on running. So missing deadlines, needing to have repeated conversations covering the same things, trying to chase down or locate documents, etc. significantly impact your client and their own internal operational efficiency.
An Avoidable Time Suck: Document Sharing & Management
One of the most ever present and frustrating operational inefficiencies for any firm, accountant, or bookkeeper is the gathering of needed documents from the client. For most, this is accomplished through the sharing of a spreadsheet where both parties can keep track of what’s needed, has been shared, etc.
This is indubitably not an awesome user experience on either end. Emailing docs back and forth while having to open and update a spreadsheet is a convoluted and time consuming process. It also requires you to be disciplined about downloading, filing, and storing the documents as they come back to you piecemeal from the client. Even worse, communications around these documents inevitably winds up in long and confusing email chains that can often become impossible to effectively search for and locate. Even when located it’s often difficult to locate or find the relevant information within the threads which can often grow to 50+ replies.
Already working with an awful and inefficient process the client will be less patient and quicker to become frustrated as you inevitably have to herd the cats to track down and secure the final documents they have struggled to get you to date. And if you manage to misplace or not be able to find something they have already shared, that frustration can easily spike and become exasperation or outright anger.
Technology as a Key Driver of Efficiency
The good news is that for virtually every endemic or widespread inefficiency firms, accountants, or bookkeepers face there is almost always a tool that has been built explicitly to address that problem. Document retrieval and management is no different and there are several excellent tools built to alleviate the pain associated with these tasks.
So what should you look for in a solution? Your solution should effectively address these 3 challenges inherent to management of client documents:
Simplified Submission Process: Your solution should offer an integrated and simplified document submission process. You should be able to invite clients into the platform where you can request the needed documentation, track the status, and allow clients to upload the needed documents directly. Not only does this provide a better user experience, but by offering a quick and simple process you will find that clients respond with the needed documents much quicker and more reliably.
Automatic Document Matching: Your solution should have a robust direct integration with the leading accounting platforms, in particular QuickBooks and Xero. These integrations should enable the creation of intelligent automation and routing rules as well as ideally have that ability to automatically match documents with corresponding transactions. The result is less time spent manually uploading and matching documents along with minimizing the opportunity for mistakes and careless errors. Even more, automation can be one of the most effective tools for ensuring compliance processes and procedures are enforced and followed.
Enhanced Communication: Your solution should provide you the ability to communicate directly and contextually with your clients. For instance when you send a client a request for a missing or needed document, the tool should give you a way to communicate and collaborate with the client and have that communication live alongside the request/document maintaining critical context and making the conversation easy to find.
Your Competitive Advantage
The good news is that these struggles are ones that all firms face and the vast majority of them are not particularly skilled at recognizing or resolving these kinds of operational challenges. That means that by recognizing how critical focusing on these challenges are to your success and the success of your firm, you have a huge opportunity to create a competitive advantage competing alternatives will struggle to replicate. The end result will be your ability to serve more clients, offer more services, retain happier and harder working team members, keep existing clients, and grow your clientele through their enthusiastic WOM.
Simplify your workflow, reduce errors, and delight your clients with effortless bookkeeping. Try Uncat for free and increase your efficiency today.
