Istanbul in 4 days

This past 4 days I have been in Istanbul, Turkey at an Entrepreneurs Organisation (EO) conference (also Paris & Singapore on way home). There were 800 of us from 35 countries attending the Istanbul conference. I attend these events as part of my quest to search the globe for latest/best/greatest ideas on business and personal…

Xero vs MYOB

Over the past 4 weeks I have interviewed both Tim Reed, CEO of MYOB and Rod Drury, CEO of Xero. Both these companies are leading the charge in SME accounting systems. As per the interviews MYOB’s AccountRight Live is in pilot with SME’s and accountants, and will be ready to go to market as soon…

Revenue Profit & Cash in an Accounting firm – video # 13 – People to Partner ratio

To increase profits per partner you have 4 key strategies only: 1) Reduce costs whilst maintaining revenue 2) Increase revenue whilst maintaining low costs 3) Reduce the partner headcount whilst maintaining revenue and low costs 4) Maintain partner headcount whilst growing revenue and lowering costs Many “high profit percentage firms” have low leverage of people…

A project is not the annual fee with a client. Annual accounting is a project. A business plan is a project. A finance proposal is a project. A tax return is a project.

What is your average project value? It’s simple to work out. All you need to do is divide the number of invoices sent into your revenue for the year. If you have multiple invoices for one project then that should be classed as one invoice.

Your average project value multiplied by the number of projects per client per year will equal your revenue per client.

It’s a great way to look at your client base. If you have a very small average project value (but lots of clients) you will have a large administration function just for invoicing. The objective should be to increase the average project value whilst increasing the number of projects that each client buys from you each year.

If your business clients are not spending at least $20,000 with you annually and buying at least 4 projects from you (therefore average project value is around $5,000) then I think you are under-servicing your client base.

I have written an extensive report on Accounting firm performance. You can download the full report here.

Enjoy video # 11.