At AVN we regularly carry out benchmarking studies of the UK accounting profession. And since 1998 we’ve worked with hundreds and hundreds of accountants in the UK and seen what works – and what doesn’t.
One of the things that’s really interesting about our profession is that accountants are not performing very well.
The average profit per partner in the UK is about £68,706.
And this is about £10,000 less than our comparative study in 2007. So life’s getting harder and harder for many UK accountants.
And bearing in mind of course that this is £68,706 is not a true profit. It’s not a ‘true profit’ because most accountants trade as sole practitioners or as partnerships. Consequently we don’t put through a commercial salary for the owners’ own time. In other words, the costs for the time we put in.
At a recent seminar for accountants (partners and sole practitioners) we asked what their time was worth. In other words, thinking about all the work they do, their responsibilities and their experience, what would they expect to be paid if they were doing exactly the same things – and working the same ours – working for larger accounting firm. The answers ranged from £70,000 to well over £100,000.
What does this mean? Simple. If we were to put a commercial salary through for the partners of most firms, of accountants in the UK are making a loss. And that’s simply not good enough. Particularly when you bear in mind that the top performing firms, despite recent difficult times, are performing better than ever.
In the past few years, AVN has twice held a ‘summit’ meeting of 6 of the best performing firms in the UK (with partners earning in excess of £200,000 profit per year). Whilst on the surface their practices look very different (for example, there were more differences in their service offerings) at the very heart of what they do are a set of core underlying principles and best practice concepts. Things that every great business has in place and yet are often lacking in others.
And here’s the great news. When you truly understand what these things are you have a roadmap for building a £1m accounting firm. This roadmap consists of seven key things. Seven things, that when you get them right, can transform your results. Seven things which are missing in most accounting firms we come across.
Mistake 1 – No Clear Strategy
Mistake 2 – Wrong Pricing
Mistake 3 – Average Service
Mistake 4 – Poor Marketing
Mistake 5 – No Written System
Mistake 6 – Measuring The Wrong Things
Mistake 7 – Inadequate People
In later articles we will expand on these mistakes, so please follow us on FaceBook, LinkedIn or Twitter or return to our AVN Insights to expand your knowledge and help you develop your practice.
Thanks for reading.
The AVN Team
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