Mar 6, 2017
Whilst there is some debate as to the degree that individual accountancy businesses will be affected by changes in the marketplace relating to taxation returns, financial advice and superannuation fund audits, you would be a very brave accountancy business if you elected to reject these changes out of hand!
At the very least why not have an each way bet!
There are numerous examples all around us about changes that are occurring in the business community – think about:
now competing with businesses such as Amazon and other internet selling organisations.
As a "numbers orientated person" my suggestion is that in the first instance you identify what the “Potential Fee Slippage” might be for your accountancy business.
I believe this is fairly easy to calculate because the group of clients that will be most vulnerable to “fee slippage” are those that currently pay you less than $3,000 per annum. These clients probably do not receive any additional services other than the preparation of income tax returns.
The Benchmarking.com.au analysis of accountancy businesses in Australia – 2016 identified that in the "average firm" ("all firms' average") 77.1% of that average firm’s clients paid less than $3,000 per annum with the average fee being $1,246.
The "average firm" had a total income of around $2.1 million, with a contribution from the under $3,000 billing segment of $579,263. This is the group of clients from which you are most vulnerable to incurring fee slippage!
Why not utilise the “Potential Fee Slippage and New Opportunities Calculator” to determine what your potential “Fee Slippage” could be?
A Fee Slippage of 20% of these fees would be a significant loss of revenue for your firm wouldn’t it?
You could then use the “New Opportunities” segment of the calculator to analyse how many clients you have in the $3,000-$10,000 category.