5 fundamentals for effectively managing your virtual accounting practice

By Jason Schow and Jason Blumer, Jason Blumer

May 5, 2020 5:07 PM

As the owner of an accounting firm, it is crucial to keep a strong direction for your practice and to anticipate and accompany growth. In the beginning, you may mainly provide a lot of technical service, taking on the role of a technical leader rather than a manager. But as the staff and client base expands, the need for continuous management will clearly appear. This can be a role that is more or less natural for you. In any case, you can learn how to be a good manager and do the right things from the start. This will make your practice flow more naturally, and possibly improve the attitudes of the people you work with.

In a previous article, we explored ways to successfully start a virtual accounting practice. In this one we present you with ideas to manage this structure and gain maximum benefits from it.

We came up with five tips that should enhance the way you manage your virtual practice. Specific situations will occur, but these pieces of advice are foundational and can be relied on when developing new managerial practices.

Make your client onboarding process valuable

Your onboarding process should be slow and strategic. It is fundamental that your potential clients understand what to expect when working with you. This process will generate a barrier of entry to your services, which carries some strong benefits:

1. Creation of a high value perception of your services.

2. Identification of potential clients who are not a fit for your firm.

You also need to understand what your clients want — not just need. This is called value capture. An example of a client coming to you with a need would be them asking you to prepare their tax return. However, what they may want is a particular level of financial growth. Try to discover the person’s values during the onboarding process.

Use this time to manage your clients’ expectations. As the virtual format of your business can sometimes lead to miscommunication, you should be extremely clear about expectations. We have outlined some things you can do to prevent unrealistic expectations from the start:

1. Make it clear that you highly value honest and open communication.

2. Set up an in-person meeting at some point in the process. If this is not possible, organize a video conference.

3. Write down the specific items you want to clarify — for example about how you work if you are not in the same physical location.

During the onboarding process, you need to be slow, thoughtful and thorough. You will set the tone for what your client will expect. They will first make judgments of your practice’s value based on their onboarding experience.

Choose the right business model

You will have to choose a business model for your practice. Two possible business models are general tax services and concierge services.

Basically with a general tax services model, the more team members you hire, the more clients you will help. If you install solid processes, your services can become an efficient machine. However, general tax services don’t provide as much value as the concierge model. You have to be creative if you want to offer high-value services and expand your offering.

With the concierge services model, you will bring more value to fewer clients. This format often leads to more profit, but you may feel limited in your ability to scale as largely or quickly as the general tax services. That is why you need to make sure the positive outcomes of this model offset its limitations.

There are also different methods to choose for gathering client information. We have identified three to consider:

1. Cloud-based tools can be a great technique for gathering client information, especially for a virtual practice. Clients and staff members will both have access to all the information anywhere with access to the internet.

2. Tax organizers often come in the form of a PDF with questions for clients. However, some clients don’t like organizers because they can be confusing and require work on their end. Also, any form that has to be mailed back to you is not ideal for a virtual practice. So, if you choose to use an organizer, you should make the process entirely digital.

3. Phone calls: Consider using this method for clients who are not tech savvy or if you know a call will be quick and efficient.

Implement rhythms and processes

It takes less management when a rhythm or process starts guiding things innately. They keep team members on the same page and enable your practice to run efficiently.

You need to document the processes implemented for each task. If you haven’t ever documented your processes before, you can use the simplest cloud-based method. That could mean using a shared Google document that outlines process steps. This document can be updated as needed. If you’re looking for a more advanced, functional method for documenting your processes, try a workflow system.

Rhythms help team members know what to expect. These practices eventually become habits, which then turn into culture. We have listed some actions you may want to implement:

1. Weekly team meetings held at the same time;

2. Adding strategy planning to your calendar;

3. Reading a book that expands your creativity the same day, each week;

4. Meeting with new team members once a month for six months;

5. Having quarterly conversations with established team members;

6. Working from 9 to 5 each day.

Rhythms are fundamental to growing a practice, and the bigger your team gets, the more rhythms you’ll need to keep everyone on track.

Price your services strategically

You need to adopt a financial model that generates profit and matches your team structure. Many aspects of your business will be impacted by these decisions.

You will of course have to price your services, but also decide how much to pay your staff. It is an absolute must that your financial structure and your pricing model allows you to make a profit. Otherwise you will need to make adjustments.

One pricing model is value pricing, where you don’t use fixed or hourly pricing, but you identify which services a client values and price them accordingly. In this case, it often works well to pay the team members a percentage of the revenue generated.

You can also offer different pricing packages for each service. When people are offered multiple alternatives, they generally perceive this to have added value. Present them with at least three options with a low, middle and high price. You will notice your clients will often choose the middle one. It also happens that some customers don’t know they are interested in a more robust service package until they’re presented with the option.

To find out what a client values and eventually lead them to take a more effective package, use the client onboarding conversation as well as a dedicated value conversation. Having value conversations in person is a great method as you’ll be able to pick up on a client’s body language. If this is not feasible, it is a good practice to set up a video conference.

Prioritize quality control

Quality control, if laid out strategically, is what allows you to scale your practice efficiently. It consists of two parts:

1. The review process: The person producing the work should be different than the person doing the reviewing. Document this process, making sure to include the high-level points that should be checked every time. Don’t hesitate to delegate some of your reviewing responsibility, as this will liberate time for leadership functions.

2. The delivery process: This is the last step where you provide the proof of your value. Simply handing your client a tax return does not count as setting up a delivery process. Delivery is a great opportunity to provide additional value to your customers and round out your service. Some examples of delivery processes you could adopt are:

Giving your client a presentation of their prior year to the current one;

Scheduling a meeting with your client to go over their tax return in depth;

Setting up a tax planning appointment with your client where you talk about strategies for the upcoming year.

Generally, an in-person delivery process is also perceived as more valuable by your clients. But if you can’t have in-person meetings (since you’re a virtual practice after all), set up a valuable, digital delivery process.

Designing and improving a great management system for your accounting practice is a task that never ends. There will always be something that requires your leadership and direction, but thinking through client onboarding, business models, rhythms and processes, pricing, and quality control is a great place to start and then you can grow from there.

Jason Schow is a product manager at the tax practice management software company Canopy. Jason Blumer is the founder of Thriveal and the chief innovative officer of his CPA firm, Blumer & Associates. He is the co-host of the Thrivecast and The Businessology Show and speaks and writes frequently for CPAs and creatives, his firm’s chosen niche.