Prevention is always better than cure, and this is true when dealing with both illnesses and errors in your accounting firm. Mistakes will cost you time, money, and maybe even some very unhappy clients or employees.
They become even more dangerous if you have a start-up that hasn’t established a strong foundation to rely on yet. You already have a heavy workload running a business—there’s no need to add more to it.
Looking Only at the Incoming Cash Flow
Receiving money has such a huge impact on your business that it’s easy to forget all the expenses that lead up to it. You could have a huge profit out of your deals, but that won’t matter if you’re spending too much. This overspending should be fixed immediately, as it could lead to debts that will take years to pay off. Those years could have been spent expanding your teams or investing in better office equipment.
Solution: set up a budget. You can prepare your firm for the long haul with just a pen, a piece of paper, and a few minutes of your time. A budget allows you to take the reigns on any cash flow problem before it gets out of hand. If you’re having trouble figuring how much should go where, then it’s never a bad idea to discuss it with your staff, or even consult another firm owner.
Related: Top 3 Best Budgeting Tools to Keep Track of Your Budget
Ignoring your firm’s marketing
No matter how beneficial your service is, you won’t get a single customer if you don’t step out for everyone to see you. Marketing is your means of getting the world to know that your firm exists and is ready to serve. Without it (and a large number of connections), you’ll be relying on mere coincidence to gain customers - and you’d be lucky to last a month.
Solution: Invest in marketing. It isn’t as easy as making a website and sitting back as the customers come in. You need to differentiate yourself from another firm. Create an identity that will be the first to pop up in your audience's mind. A website is your best bet in this modern age, because of how every business is expected to have one nowadays. It’s a long and somewhat costly process, but it’s well worth it in the long run.
Keeping the price on your services too low
There’s no doubt that customers would flock to lower prices, but you’re damaging your firm’s chances in the long run. After all, you need money for business maintenance and continuously improving to stay on top of the competition. Low profit can also lead to very unhappy employees (or no employees at all) because their paycheck will inevitably be affected by your lower rates.
Solution: Make the price right. You need to be able to pay off whatever costs it took to finish that project or maintain that client, with a reasonable amount of profit.
Only looking internally for help
The best solution can’t always be found inside your firm. You may have to consult with outside sources if a problem is beyond your field of expertise. There are instances where some business owners shrug and say that they had no other option, only to have an outcome that is sub par at best.
Solution: Think outside the box. If you have any connections from your previous jobs, friendships, or even within your family, there’s no reason for you not to ask if they can help you. In case they refuse for various reasons, there are other options still available to you: outsourcing, consultations, online materials, and many others.
Read Next: What You Should Look for in Your Partner Firm
If you are looking for resources to better understand how to start and grow your practice, we have an offer you may find interesting. Read our guide, Solutions for Australian Accounting Firms, to learn more about D&V Philippines.
First published on 7 February 2017; Updated on 27 February 2020