: Rob Nixon
: Accounting Practices Don't Add Up! Why They Don't and What to Do About It
: Vivid Publishing
: 9781922204141
: 1
: CHF 7.60
:
: Betriebswirtschaft
: English
: 192
: DRM
: PC/MAC/eReader/Tablet
: ePUB
The traditional Accounting 'Practice' model is outdated. Your clients do not want an accountant who is just an order taker. What they do want is an accounting firm that looks to the future and provides them with timely advice on what they should be doing now to improve their businesses and ultimately to help them achieve their financial and lifestyle goals. If you want to be that firm, you need to read 'Accounting Practices Don't Add Up' to learn how. In this book, Rob Nixon reveals how he helps accounting firms succeed.

1


What’s Right and Wrong with the Traditional Model

I am convinced that the inventors of the current profit model of an accounting practice werenot very good at strategy or business development. I am certain that the creators of this model had charity in mind. I am also convinced that the current model will bring in a decent income (and maybe a reasonable lifestyle if you are frugal) but it will not make you wealthy.

Now that I have your attention let me share with you what is right and wrong with the traditional model.

The Bizarre Habits


The current model just does not add up– it’s flawed from the start. Take a look at how the vast majority of accounting practices around the world make a profit.

Most partners of most accounting practices earn $200K - $400K per annum. However, that’s before taxation and working capital. You can build a reasonable lifestyle but it won’t make you wealthy!

This model truly is bizarre. The success of the revenue model is predicated on…

1. A volume of people to do the work– who always seem to be in short supply.

2. Squeezing maximum chargeable hours out of the accounting team. (In a Scottish accent the partners rant,“We want more billable hours out of you laddy.”)

3. Increasing charge rates. However they are typically linked to salary levels so you get marginal profit improvement.

4. Reducing write-offs, which is discounting before billing. While you price in arrears you will never ethically reduce write-offs.

5. Reducing labour costs. Since when has that strategy worked?

6. Reducing overheads and being extremely frugal. See point above!

What wrong with all that, you say?

The entire model is based on‘labour for hire’ and that is not what you sell. You sell what you know; you sell intellectual capital turned into intellectual property, which is disguised as letters, reports, statements of advice, meetings and recommendations. You DO NOT sell labour– yet that is what your business model says you sell.

Around the world at various partner retreats (why they are called a retreat is beyond me– I thought you were supposed to be‘advancing’ at these things&ndas