Many accounting professionals are providing advisory services to their clients. The purpose of advisory services is to help your clients solve a problem, overcome a challenge or create an experience of what’s possible for them with you by their side.
Cash flow forecasting and management is an advisory service that we help accounting professionals offer to their clients. By receiving this service offering from you, your clients are able to plan more effectively, make more informed decisions and have more options when a cash flow crisis is on the horizon.
But as an accounting professional, how do you improve the cash flow of your own firm?
One answer is to work with the levers in your firm that generate positive cash flow (inflows > outflows).
Below are some examples. Focus on increasing all of these things:
The number of "ideal clients" that you serve. Sounds simple and requires some focus. We know your product or service can meet a need for a number of different customers or clients. What would happen really if you focused on increasing the number of the type of customers you want to have?
The average value of each sale. This can be a pricing issue. Is your pricing in line with the results you provide? Do you have complimentary products or services that your customers should purchase that would enhance the results of experience? You know, like buying a pair of sneakers where they offer you the insole and socks, making sure that you have the best experience wearing your new kicks.
The number of times customers come back. Stay top of mind with your customers and clients. Do you only meet with clients once a year, twice a year or quarterly? Perhaps they are growing and really need you to keep your finger on the pulse of their finances monthly. Dentists recommend twice a year appointments for their patients. Garden stores provide products and services throughout the year so you can prepare, plant and harvest with east. The more you meet with your clients, the more value you provide.
The effectiveness of each process in the business. This is the not sexy and “passion-filled” aspects of your business. Automation is key here. Invoice your clients for services as soon as the project is complete. Have a credit card on file and automate payments for monthly, fixed fee or retainer clients. Systematize or delegate email communication. Create an ecosystem to reach, develop and maintain client relationships.
The above can work for your clients' businesses as well. But if you start focusing on these things, you will be well on your way to improving the cash flow of your firm.