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10 Habits That Lose Your Accounting Firm Time and Money
Heavy income loss can be catastrophic for your firm. Here are ten habits that could be losing you money.
“Lost revenue” doesn’t always come from losing clients or a failed project and the like. Your accounting firm is likely to lose more money in non-client-related activities. How?
Several bad habits seem harmless but have a domino effect on your bottom line over time! These habits create inefficiencies in your workflows and render your staff less productive in the long run.
So, while these do not lead to obvious money losses, their effects increase over time and cause heavy monetary losses.
Therefore, it helps to be on the lookout for these to keep your firm operating at high capacity. What are some of these common accounting mistakes to avoid?
10 bad habits that are losing you time and money
1. Doing things the way "they've always been done"
While it may seem safe to keep doing things the same way, that could also be the reason your firm is losing money.
Many of your clients have undergone massive changes and thus require more unique solutions. What is your firm doing to address this? Are you customising your solutions to meet the new challenges, or are you sticking to the old ways?
The latter is dangerous because sooner or later, your clients will want to seek more “updated” solutions.
Furthermore, failure to change with the times will affect your team’s output. They will be using old methods to handle new technologies and trends, and such inefficiency will cost you a lot of time and resources.
2. Disorganised paperwork
There is no time waster in accounting quite like disorganised paperwork. It feels like you are searching for a needle in a haystack when you have invoices, contracts, bills and vouchers all over the place. You spend way more time than needed to find simple things.
Due to disorganisation, you will likely miss deadlines that will cost you heavily in late fees and unsatisfied clients.
3. Not using templates
You do not need to do everything from scratch anymore. Yet, this is a common accounting habit with small firms.
Many tasks are repetitive, e. g
- Basic compliance
- Client reminders, etc.
So, creating templates for such activities would make sense, so you don’t have to start from scratch every single time.
Failure to use templates means your people waste a lot of time doing repetitive yet unprofitable tasks. Therefore, they spend longer working on projects, which limits time spent on other profitable activities like finding new clients or servicing higher-paying customers. In the long run, you lose a lot of money.
4. Avoiding new software
Accounting software is meant to make your life easier and help you serve your clients faster and better. However, many accounting firms choose to stick to their old tools. The excuse is often the time and resources it takes to adjust to new systems.
This bookkeeping habit jeopardises your team’s productivity compared to other firms. It will not be long before your clients choose faster and more efficient competitors instead.
5. Not making use of automation
If you are the type that avoids automation like the plague, you are losing more money than you think. Accounting automation tools help you get more work done in less time. That is especially true with repetitive tasks like making ledger entries or balancing invoices and receipts.
By sticking to manual methods, you spend more time doing mundane tasks, which you could use on more profitable activities. This, in turn, affects your efficiency and profits in the long run.
6. Being a one-man-army
As with many other small businesses, the temptation is always high to try and do everything with just a few people.
But let’s face it, one person cannot do everything. They cannot be the bookkeeper, the tax accountant, the financial analyst, the auditor, etc., all at once.
As your firm grows, you must get more people on board to handle the increasing workload. Overloading your staff with multiple roles could lead to poor customer service, missed deadlines, etc. All these are costly in the long run.
7. Not sticking to deadlines
Few things are as off-putting for your accounting clients as not adhering to deadlines. Clients want their work done well and on time. When you constantly miss deadlines, it is a sign of unseriousness. And no one wants to trust their financial records to such a team.
Besides taking their business elsewhere, you could ruin your reputation in the industry. In the long run, you lose several clients and have difficulty attracting new ones.
8. Overservicing clients
As a small business in accounting, there is always the temptation to go above and beyond for your clients. Much as this puts you in good books with your clients, it could affect your bottom line over time.
You spend many productive hours doing more than what you are paid for to keep a few clients happy. But on the other hand, you could use that time and resources to improve your business processes, seek out new clients etc.
Time is money! So, you don’t want to spend too much of your time doing free work.
9. Not standardising processes
Having all your account managers “figure it out along the way” is a common accounting mistake which leads to time wastage and leaves room for huge errors and poor service. Simple tasks become more complex and time-consuming.
You cannot also measure customer service quality without a standard process and checklists. In the long run, all these issues significantly affect customer experience and trust, and it will not be long before they start seeking alternatives.
10. Not understanding key metrics
Key metrics and reports can seem trivial when you are too busy managing your team, clients, and other admin tasks. But failing to track such information means a lot of data goes unnoticed.
For example, you will not be able to tell when some clients or processes are not as profitable. Such operational cracks cost you lots of money in the long run and lots of time to rectify. So, the more you work them out, the better your bottom line.
How Pixie can help
Habits that waste time and cause inefficiencies cost you a lot more money. So, you want to avoid these ten critical mistakes to preserve your business’s profitability.
Maintain a culture of orderliness and real-time reporting, maximise automation and continuously measure your activities to ensure maximum productivity and efficiency.
Luckily for you, accounting management tools like Pixie now exist to help you manage your business and clients more effectively. Reach out to our team today and find out how we can help you.