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Much of accounting work is cyclical. Not to oversimplify, but there are ‘busy periods’ (usually when regulatory deadlines loom) and ‘quiet periods’.
During busy periods, Accountants tend to focus on Client work… and nothing else. This can result in missed opportunities.
An Australian accounting business wanted to generate more opportunities and smooth out its monthly revenue. Here is their analysis and the actions they’ll take, which could be of value to many firms.
(Note, the cycles below are based on an Australian regulatory calendar but can easily be adapted to other jurisdictions.)
Actions to Increase Revenue (mindful of the cycles of an Accounting Business)
“Quiet Period”: Immediately after Financial Year End
What happens in this period (3-4 weeks)?
- We ‘catch our breath’ clear out difficult items in Work In Progress and complete annual salary reviews
- We never plan for this period in advance so there is little work coming in
- The new fiscal year starts with low numbers and that puts us behind achieving our annual revenue goal
Actions:
- Before year-end, identify clients able to bring their work in early
- These include organised Clients who need financial statements for banks or journal entries to rollover their accounting system
- For Directors, Partners, and Mangers, schedule client nurturing visits and review completed work
- Follow-up with clients to ensure that their year-end tax planning was implemented
- Stop doing admin work. Delegate
“Quiet Period”: Between Christmas and New Year
What happens in this period (1 week)?
- Your clients and Team are in holiday mode, wishing they were elsewhere and trying to leave early!
- There are no immediate deadlines and Clients won’t answer queries
Actions:
- Reduce working team for this period
- Those who work should define what they will do AND ensure they have ALL necessary information in advance
“Quiet Period”: Mid to Late January
What happens in this period (1 week)?
- Team is back, but clients are away
- In the pre-Christmas rush, no one thought to bring in work to be completed in Jan
Actions:
- Accumulate and schedule work for Jan in the lead up to Christmas
- Pay close attention to identifying missing information before clients head off for holiday
“Quiet Period”: Just Prior to Financial Year End
What happens in this period (1 week)?
- No new work has come in because partners were engaged in year end / tax planning meetings
- but now tax planning is mostly complete and Clients are under control
Actions:
- Meet Clients (and set targets) for non-tax projects including annual cash flow budgets
- Set targets and select certain Clients for which you have been busy to consider additional work
- Identify additional ways to help selected Clients, set meetings to discuss and actively seek new work
- Develop your own firms budget for the coming financial year
- Share your business goals and targets internally to build momentum
Other features of revenue cycles in Accounting businesses
- Some firms earn LESS revenue in the FIRST six months because Clients do not bring work until tax deadlines loom
- Other firms earn LESS in the SECOND six months because tax planning is complete and no other work is lined up
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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