Accountants: How to Stop Leaving Money on the Table

Tim Sines

One big challenge that accountants, medical practitioners, lawyers, and all independent contractors and consultants share is balancing billable and non-billable hours.  

As a business owner, you want to bill as many hours as possible, but nurturing leads and building your client base to get paid more requires non-billable work like marketing, internal branding, and recruiting.   

For accountants facing this challenge, there’s only one solution: Generate enough billable hours and charge enough for them to cover your non-billable activity.  

Of course, this is easier said than done. But our CPA time and billing software company can help! Here are some tips to help you get the most value possible from every minute you spend on the clock. 

Raise your rates after tax season 

Recovering from the whirlwind of April’s tax season can leave you feeling that you aren’t compensated enough for the value you provide. Raising your rates post-tax season is a strategic move to get properly rewarded for your expertise, but you don’t want to burn bridges with existing clients.  

You have to strike the perfect balance between acknowledging your worth and appreciating your clients’ loyalty to achieve client retention. The good news is that with the right approach, you can raise your rates without diminishing your client base. 

Keep communication open and transparent 

One of the most effective strategies for raising your rates without alienating your client base is being completely transparent. Start by notifying your clients well before the rate increase and explaining the reasons behind the change.  

For example, you might share that your new rates will reflect: 

  • Enhanced quality of services 
  • Additional new features 
  • Increased costs of maintaining high-quality services 

Keeping your clients up to date can be a time-consuming process, but there are efficient ways to get the message out. Use the secure email communication feature within Mango’s practice management software to send personalized, detailed explanations and eSignature requests for new contracts for enhanced clarity and mutual agreement.  

Staying open and transparent helps you build trust with clients and shows them you value their business. 

Offer value-added services 

Introducing value-added services can also significantly soften the blow of a rate increase. Consider what new services or improvements you can offer to justify higher rates to your clients, such as: 

  • Complimentary annual strategy session 
  • Quarterly account reporting 
  • Guarantee of faster turnaround times 
  • Free financial webinars 
  • Access to client collaboration tools like a secure client portal for real-time project tracking 

Improving your service offering lets you increase rates while also increasing the value proposition for your clients. You can use Mango’s reporting and analytics software to identify which services your clients value the most so you can focus on these areas and make the price increase worth it. This will go a long way toward promoting client retention. 

Implement customized pricing models 

Instead of taking a one-size-fits-all approach to increases, consider implementing customized pricing models tailored to the needs and usage patterns of individual clients. It may take a little work upfront, but it’s well worth it.  

Analytics and reporting software can make customization infinitely easier. It allows you to gain insights into how different clients use your services so you can create personalized pricing plans reflecting the value they receive.  

For example, clients with more complex needs or who require more hands-on support might be more understanding of a rate increase if it’s tied to the specific services they use. Offering tiered or bundled services can also help clients see the direct correlation between what they pay and the value they get, making the rate increase feel more reasonable and justifiable. 

Set targets for employees 

Raising your rates is one of the first steps to take if you’ve been leaving money on the table, but employee management is just as important.  

Setting utilization goals for your team members can optimize employee and manager performance. The key to making it work is to set reasonable benchmarks. First, use time-tracking software to assess how much time each employee spends on each item. Then, set future benchmarks based on those timeframes.  

It’s important to recognize that executives and other members of the leadership team will likely have a lower utilization rate than a junior-level employee who is grinding out client work every day. Conversely, junior members who are just starting out may need extra time allotted to learn new processes and correct mistakes.  

As we’ve said before, if you use your time tracking tool to assist rather than control, your firm can yield positive benefits.  

Manage the time your team is spending 

When trying to maximize profitability and minimize financial leakage, one area that often gets overlooked is effectively managing your team’s time.  

The key to unlocking this potential? Capacity planning.   

Capacity management isn’t just about doing more in less time—it’s about doing the right things at the right time with the right resources. The goal is to balance your processes, team, and technology without burning out your team members.  

To start capacity planning, evaluate your data on how each team member has spent time across different tasks and projects. Then, optimize each member’s workload accordingly. 

For example, if you notice that a senior accountant is spending too much time on tasks that a junior accountant could effectively handle, you can reallocate responsibilities to boost efficiency. Conversely, if a junior accountant is overwhelmed with complex tasks that extend beyond their capacity and working overtime without proportional productivity, you can redistribute these tasks to more experienced team members. 

Once you’ve redistributed tasks, you can utilize Mango’s comprehensive project management software to: 

  • Allocate tasks based on their expertise and capacity. 
  • Evenly distribute work among team members to avoid burnout. 
  • Meet deadlines without overburdening any single team member. 

By analyzing these patterns and adjusting accordingly, you can tailor work assignments to match the skill sets of your team members. As a result, everyone can work on tasks that maximize their efficiency within a balanced 40-50-hour workweek. 

Understand which clients take more resources  

Another way to optimize your billable hours is to use an accounting time tracker to log hours spent on each client.  

Client relationship management is an important facet of running a business, and it should be expected that different clients will require different levels of management. But if a client is actively preventing you from doing your work efficiently, you’ll have to decide if there are parts of your interactions you can automate or if it’s time to find more profitable clients 

Either way, ensure that you include every out-of-scope task in their invoice. This often goes a long way toward encouraging clients to keep their interactions brief.  

Keep work scope expectations clear  

Speaking of the scope of work, another strategy to prevent your firm from leaving money behind is to guard against scope creep—when client engagements start to exceed the originally agreed-upon work without corresponding adjustments in fees or deadlines. It’s often caused by ambiguous agreements or the gradual expansion of project boundaries without regular check-ins. 

Scope creep is a common problem in the accounting industry. Thankfully, there are several ways you can combat this. 

Optimize your engagement letters 

Good engagement letters set clear expectations with clients and prevent scope creep. Engagement letters clearly outline the terms, conditions, and services you’ll provide the client in great detail so that everyone is on the same page from the beginning.  

Tools like Mango’s engagement letter feature can streamline the process by creating comprehensive, legally binding engagement letters within seconds. Instead of crafting and sending them letter by letter for each client, you use customizable templates and tailor them for individual clients. 

The software also minimizes the risk of misunderstandings and helps you get paid promptly by including proposals, agreements, and integrated payment links all in one document. It even includes a review and approval process before sending the letter to make sure it’s accurate and compliant.  

Having clear terms right from the start fosters a strong client-accountant relationship and ensures clients understand the exact service they’re paying for. This helps you justify your fees and manage your workload efficiently. 

Have regular scope reviews 

Schedule periodic meetings to go over the scope of work outlined in the engagement letter. You can use these opportunities to discuss any changes or adjustments needed based on evolving client needs or unforeseen challenges. 

Leverage project management and time-tracking software 

You can also take a proactive approach by utilizing the project management, time-tracking, and billing features within your practice management software. 

By documenting and tracking each project’s progress, you can identify when the work is beginning to exceed the original scope. Furthermore, in-depth time tracking allows you to provide clients with transparent, detailed billing statements that clearly show where and how you’re using their investment.  

Therefore, these features allow you to: 

  • Identify areas where the scope may be creeping beyond the initial agreement 
  • Have informed discussions about the scope 
  • Justify your rates and any subsequent rate increases with concrete data 
  • Make price adjustments in real time 
  • Ensure any additional work is agreed upon and billed appropriately 

By using these three strategies, you can stop leaving money on the table and build a foundation for sustainable growth and client satisfaction. 

Recognize that non-billable hours can be profitable  

In the introduction, we stated that one of the most effective ways for firms to gain new clients is to perform more non-billable work. This is such a self-evident fact of business that it hardly bears mentioning. After all, if you own your own accounting practice, you almost certainly built yourself up from nothing through non-billable sales and marketing tasks.  

The reason we mention it, though, is that it’s easy to lose sight of this when your firm hits a rough patch. If you find yourself with a lot of silent phones and empty invoices, refocus during this lull in client work to expand your knowledge and professional capacities 

For instance, you could use your non-billable hours to learn more about your time and billing software’s capabilities and then use what you’ve learned to create more efficiency. Even what we think of as “downtime” can be profitable—you never know when a news article or blog post will spark an idea that could revolutionize how you do business.  

Make every second count with Mango’s time tracker for accountants! 

Want to maximize your billable hours? Mango’s time and billing software for accountants can help.  

Our simple, intuitive time-tracking solution helps individual accountants and entire firms track their time efficiently and accurately. To see our products in action, request a free, no-commitment demo by filling out our easy contact form. 

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