accounting business

How to market your accounting business

Marketing can play a pivotal role in attracting new clients to your accounting firm. By investing a little time and budget in the right areas, you could expand your client base and achieve your goals for growth. Here are four tips to successfully market your accounting business.

1. Learn more about Facebook advertising

Facebook can be a valuable tool for growing your accounting practice. Not only does it provide helpful information to prospective clients about your services, but it also encourages people to interact with your business on the platform – whether to ask a question or respond to an advert.

Advertising on Facebook can also help take your practice to the next level. Due to its popularity and mammoth amounts of user data, almost any business can find its target audience and still stay within its advertising budget.

2. Partner with your accounting software provider

If you use accounting software, it might be worthwhile checking how your provider can support you in attracting new clients. For example, QuickBooks runs a ProAdvisor program to give accounting professionals the tools and training they need to move to the cloud and help clients run their businesses more efficiently.

Become a ProAdvisor, and you can add your profile to QuickBooks’ professional listing, visited by thousands of small businesses looking for an accountant every month. You’ll also gain access to a host of other valuable features, such as training to upskill you or your team and ready-made marketing materials to promote your new ProAdvisor status to your clients.

3. Encourage clients to refer your services

There is simply no better way to advertise than via word-of-mouth. Studies have shown that people are 90% more likely to trust a company recommended to them by someone they know. This is why it’s a good idea to encourage your clients to refer your accounting practice to their family, friends, and co-workers.

The best way to make this happen is to offer fantastic customer service. You can then ask trusted clients to add a positive review to your Facebook page or on Google – these reviews are worth their weight in gold.

4. Optimise your website

Having a website for your accounting practice is critical. Not only does it add a level of professionalism to your business, but it opens up the opportunity for new business. Search engines, such as Google, can play a significant role in determining your success. 

Search engine optimisation (SEO) is a strategy to improve your website’s position on search engines.

How you optimise your site is directly related to how search engine algorithms assess your website’s relevancy, such as content, links, user experience (UX), design, and functionality. If done correctly, an SEO strategy can help your practice grow exponentially.

Six time-saving tips to transform your accounting business

Operating an accounting business comes with its own unique set of challenges. At some point, almost every accountant will find themselves wishing there were more hours in the day. While time travel isn’t possible (yet), there are a few simple things you can do to make the most of your working hours.

1. Prioritise your workload

At the beginning of each workday, spend a couple of minutes writing down what you need to accomplish before the end of the day. Create a checklist for yourself with the most pressing tasks at the top, and work your way through it. If a job seems particularly daunting, break it down into smaller, more manageable steps. This will help you to visualise your workload and make tackling it a lot easier.

2. Work with your calendar

Structuring your day around what you’ve got planned and any upcoming deadlines is a great way to keep yourself focused and on track. Put everything – events, meetings, work lunches, due dates – into your calendar, and schedule your work around them. Consider when you’re most productive, too – for example, if the morning is when you do your best work, schedule time to complete your most pressing tasks at the top of your checklist before lunch.

3. Invest in the time-saving tools

There are several time-saving tools designed specifically for accounting professionals. For example, QuickBooks Online Accountant is cloud-based accounting software that gives accountants more control over their work, team, and clients’ finances. From its easy-to-use dashboard, you can add tasks, review deadlines, and delegate to team members. You can even save all your favourite accounting and bookkeeping tools and create customised and automated reports.

4. Delegate

While it’s nice to be considered indispensable, there should never be only one person on your team who knows how to do something. Ensure others in your practice can take over for you or someone else if need be. Where possible, delegate tasks to those with smaller workloads so you can free up more of your own time to focus on securing new business or growing your practice.

5. Take breaks to avoid burnout

As hard a worker as you might be, you’re not a robot. You and your team need time to recharge so that you can operate at total capacity when you need to. Take breaks throughout the day to grab a coffee, go for a walk, or get outside. Allotting some ‘me time’ to get away from the stresses of work will help you stay sharp when you’re back at your desk and save you time in the long run.

6. Say ‘no’ to social media

Social media sites, such as Facebook, Twitter, Linked In, and Instagram, can help you reach new audiences and grow your practice. Still, they can also be highly distracting when you’re trying to work. If you need to be active on your business accounts during the day, make sure the time is scheduled, and try not to look at your social media accounts until after hours.

Eight accounting equations every business should know

Managing your business’s finances and revenue can be a full-time job, so much so that you may need to create a financial position to handle these duties within your small business.

However, many small businesses—especially businesses just getting started—prefer to handle this aspect of their business themselves, thus preceding the help of an accountant to manage the company’s balance sheet and business transactions.

If you’re a small business owner who would prefer to monitor your company’s cash flow with your own two eyes, there are financial accounting equations that you should be familiar with. These fundamental accounting equations are rather broad, meaning they should apply to various types of businesses. Combined with a basic understanding of how accounting works, the equations will provide you with the figures you need to understand your business’s viability and health and make more informed business decisions.

Whenever you post a transaction, you should practice double-entry accounting. Double-entry accounting requires you to post debits on the left side and credits on the right side of a ledger. The total dollar amount of debits and credits always needs to balance. All of the following equations stress the importance of double-entry bookkeeping.

1. Overall value

The equation:

Total assets = liabilities + equity

What this accounting equation includes:

  • Assets are all of your company’s things, including property, cash, inventory, accounts receivable, and any equipment that will allow you to produce a future benefit.
  • Liabilities are obligations that the company must pay, including lease payments, merchant service fees, accounts payable and any other debt service.
  • Equity is the portion of the company that belongs to the owner. If shareholders own the company, then the stockholders’ equity would fall into this category as well.

This is a balance sheet equation. The dollar amount of assets on the left side of the equation must equal the sum of the liabilities and equity on the right side of the equation.

2. Net income

The equation:

Net income = revenue – expenses

What this accounting equation includes:

  • Revenue is the sales or other positive cash inflow that comes into your company.
  • Expenses are the costs incurred to generate revenue.

By subtracting your revenue from your expenses, you can calculate your net income. This is the money that you have earned at the end of the day. This number may demonstrate a net loss when your business is in its early stages. The ultimate goal of any business should be positive net income, which means your business is profitable.

stock market analysis

3. Break-even point

The equation:

Break-even point = (sales – fixed costs – variable costs = $xx.xx profit)

What this accounting equation includes:

  • Fixed costs are recurring, predictable costs that you must pay to conduct business. These costs can include insurance premiums, rent, employees’ salaries, etc.
  • Sales is the sales price charged multiplied by the number of units sold.
  • Variable costs are any costs you incur that change based on the number of units produced or sold.

The break-even point tells you how much you need to sell to cover all of your costs and generate a profit of $xx. xx. Every sale over the break-even point will create a profit.

4. Cash ratio

The equation:

Cash ratio = cash ÷ current liabilities

What this accounting equation includes:

  • Cash is the amount of cash you have at your disposal. This can include actual cash and cash equivalents, such as highly liquid investment securities.
  • Current liabilities are the existing debts the business has incurred.

This ratio gives you an idea of how much cash you currently have on hand. It also demonstrates how well your business can pay off its current liabilities. The higher the number, the healthier your company.

5. Profit margin

The equation:

Profit margin = net income ÷ sales

What this accounting equation includes:

  • Net income is the total amount of money your business has made after removing the expenses.
  • Sales refer to the operating revenue you generate from business activities.

When you divide your net income by your sales, you’ll get your organisation’s profit margin. Your profit margin reports the net income earned on each dollar of sales. A high profit margin indicates a very healthy company, whereas a low-profit margin could indicate that your business does not handle expenses well.

Remember that your net income is made up of your total revenue minus your expenses. If you have high sales revenue but still have a low-profit margin, it might be time to look at the figures making up your net income.

6. Debt-to-equity ratio

The equation:

Debt-to-equity ratio = total liabilities ÷ total equity

What this accounting equation includes:

  • Total liabilities include all the costs you must pay to outside parties, such as accounts payable balances and interest and principal debt payments.
  • Total equity is how much of the company belongs to the owners. In other words, it’s the amount of money the owner has invested in his or her own company.

A high debt-to-equity ratio illustrates that a high proportion of your company’s financing comes from issuing debt rather than issuing stock to the shareholders. Suppose you’re attempting to secure more funding or looking for investors. In that case, a high debt-to-equity ratio might make it more difficult to find creditors or investors who are willing to provide funds for your company.

7. Cost of goods sold

The equation:

Cost of goods sold = beginning inventory + price of purchasing new

inventory – ending inventory

What this accounting equation includes:

  • Beginning inventory is how much stock you have on hand at the beginning of the period.
  • The cost of purchasing new inventory is the amount of money your company has to spend to secure the necessary products or materials to manufacture your products.
  • Ending inventory is the product you have remaining at the end of the period.

The cost of goods sold equation allows you to determine how much you spent on manufacturing the goods you sold. By subtracting the cost of goods sold from the revenue, you can decide on your gross profit.

8. Retained earnings equation

The equation:

Retained earnings = beginning had earnings + net income or net loss – cash dividends.

What the retained earnings formula includes:

  • Retained earnings represent the sum of all net income since the business’s inception minus all cash dividends paid since the beginning.
  • Beginning retained earnings are the retained earnings balance from the prior accounting period.
  • The company’s net income represents the balance after subtracting the expenses from the revenue. It’s also possible for this to result in a net loss.
  • Cash dividends are cash payouts to those who own ordinary shares.

Knowing how to calculate retained earnings allows owners to perform a more in-depth financial analysis. The statement of retained earnings will enable owners to analyse net income after accounting for dividend payouts. Owners should calculate the statement of retained earnings at the end of each accounting period even if the amount of dividends issued is zero.

Monitor your company’s financial health

A complete accounting system and a well-maintained general ledger allow you to properly assess your company’s financial health. There are many more formulas that you can use, but the eight that we provided are some of the most important.

Although these equations seem straightforward, in reality, they can become more complicated. Many small business owners find it to assess your company’s financial health properly challenging to balance the right side of the equation with the left side of the equation when factoring in the potentially hundreds of accounts they have in their company.

Fortunately, small business accounting software can help. All you need to do is enter your business transactions. Your accounting software will then crunch the numbers so that you can analyse your business’s health. The more knowledge you have regarding your finances, the more efficiently you can run your business.

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