It’s 2017. Are you ready with your plan for the next 12 months yet? By this time, you should have already studied your previous year’s plans and analyzed your results. You should have a good idea of where you had gone wrong in the previous year and where you need to improve. Every CPA firm needs to do that.
But there are some common mistakes that CPA firms make when planning for the year ahead. Let’s take a quick look at them
Overestimating your cross-sells and upsells
One of the biggest mistakes CPA firms make is to assume that they would be making more cross-sells and upsells that they really end up doing. You should have a good idea of the number of services you are going to sell to each client, whether it is bookkeeping, virtual CFO or tax preparation.
But it would be a mistake to assume that there will be a specific level of upselling and cross-selling with each client. Often such projections turn out to be untrue as you may not be able to deliver as planned. So at the end of the year, you wonder why the revenues are not as high as you had projected.
The best way to go about this is to create a systemic approach. You should optimize your workflow. This means becoming more efficient by doing more in less time.
The best way to do that is to switch to cloud-based accounting services such as QuickBooks Hosting and Tax software hosting.
Not thinking about the details when creating a business plan
Another common mistake CPA firms make is to make too many assumptions about their business without thinking clearly about the details. This can lead to many errors, including faulty assumptions. You wouldn’t want to create a business plan that is not practical.
To prevent this, you should talk to your peers and develop a team of like-minded advisors, who will tell you the hard truth, whether you like it or not. They will poke holes at your plans and tell you exactly where you are going wrong. Your advisors will keep you on track.
Choosing a niche without listening to your clients
As a CPA firm, there are certain niches where you are good at and where you receive decent client feedback. But sometimes, you will have the temptation of venturing out into a new niche without paying attention to your clients.
It’s a good thing to expand your range, but what if your clients suffer as a result? You should base your decisions not on how well you think you are doing, but on how well your clients think you are doing.
You should listen to your clients carefully and consider their feedback with all seriousness. Any CPA firm that does not listen to its clients is doomed to failure. Surely, this is not what you want!