This month we have been cooking with gas and my staff are firing on all four cylinders in a race to achieve our #taxathon target. Last time, I wrote about the frustration of clients not delivering their papers on time (Herding the Hippos), which started me thinking:
Do I really want my hippos on my books?
Other than the fact that they contribute substantially to my cash flow, do I really want them given the stress that they contribute to the team?
However, having read some comments on my blog I may have made an about turn on my attitude to hippo clients - but on my terms.
One reader DJKL commented that tax season wouldn’t be tax season without the hippos and that their working life has been defined by it. I have to agree. I can put strategies and processes in place to reduce the stress levels in the office but I will never be able to eliminate it. So it's easier to accept that January will always be associated with a little bit of stress.
Accepting that January will be stressful is the first step to a happier and achievable #taxathon but what fascinated me was Adam Daniels response. Adam set up a drip campaign to show client case studies of other clients who got their tax returns in on a timely manner and how they greatly benefited. He advised that if I show my clients what was in it for them they will respond co-operatively.
Great advice, so this month along with our email of requesting papers I sent out case studies of clients who have already prepared and submitted their tax returns as well as using our “gunning down” approach in which I, the most expensive resource in the business, called the hippos for their papers.
I am always one to try and improve and take on board what my staff suggests. I called these clients individually which resulted in receiving five more papers. Not sure if this was the best use of my three hours.
Adam has found that people move towards pleasure and away from pain. “Show them what’s in it for them and they will respond.”
Adam if you are reading this article please share some of your campaign tactics because I think I am failing miserably. Of the 65 tax returns to do there are only 41 hippos.
Here are some of the tactics I have employed to surface my hippos.
Increased fees if tax returns papers and information are handed in after a certain date
We cannot guarantee the submission of their tax returns if papers are handed in after a certain date
We may not be able to sit down and review and amend tax returns if the papers are handed in after a certain date
There is another interesting statistic that is rumbling away uncomfortably in the pit of my stomach. Here is my confession. I have the feeling that I have not been managing the business as efficiently as I should have.
I have enough handbags and shoes to know I have been making a profit, but I don’t think I have been maximising my resources.
It’s a simple equation. On average my team prepares 30 tax returns a month. So that means if we have all our papers we would be able to finish by the end of December. Ergo the whole of January will be free. I have gained 280-man hours this year; if my charge out rate is £100 per hour then all these years what have I been doing?
Have I been losing out on £28,000 worth of super profits?
I started thinking about the profitability of each client when our admin lady told me how much time she was spending chasing hippo clients. When I roughly added up the time spent chasing, time spent doing the work, I realised that the profit on each hippo was quite small, but I couldn’t tell you the exact number. Pretty pathetic for an accountant.
When I was a trainee-chartered accountant the shock of going from a student to a “professional” was a rude enough awakening but by far the biggest anathema was those dreaded 15-minute timesheets. Oh, how I hated filling them in. Going to the loo, getting a coffee, having a quick social chat was like cheating on the timesheet. Where can I say I was? Who can I allocate that time to? It was really stressful mainly because I couldn’t always remember what I did and because somethings just took longer than others and the Spanish inquisition was awful.
It is for this reason when I started in my own accountancy business I decided I would move away from the traditional billing and work a cost-plus method where there was absolute transparency in the fees the clients were going to pay and the fees that I was going to receive.
I still think this is the right method for me, but I need more insights into my business. I need to know the profitability of each job, I need to know whether I am making the best use of my staff’s time. So maybe I need to get my staff to start filling in timesheets (they are going to hate me). After all, I am selling time. I really should have this key management information at my fingertips and I should be able to back my gut instincts with facts and figures. How shameful.
I need more insights into my business
I am going to do some serious analysis on my management numbers this month. Have I really increased my capacity by 280-man-hours? Am I really making a profit? Which one of my clients is profitable? Are my staff are working effectively?
Watch this space.
Susan is a chartered accountant in practice who in the pursuit of her 99% client retention rate (of which she is very proud!) ended up building onkho as well. Her firm KWSR & Co serves over 300 clients across London and the South East. In addition to product development, Sue pushes her "delight clients" mantra across the onkho business. There's a reason why we call it the Success Team and not the Support Team!