Becoming Superman: How to increase your profit in six steps (step three)
Peter Czapp, director at proactive accountancy company, The Wow Company discusses what it takes to build a super-profitable agency in six steps, by sharing unique insights into how to increase the profit you make every day. Following on from step two, The Big Cs, here Peter discusses the third step to success - 'Live on a Cloud'.
Integrating all your business processes with cloud-based technology means that you no longer need to be “living on a prayer.” Integrating the right technology into your agency eliminates most of the guesswork, as you can work off real time data and be able to see exactly if a decision is going to be profitable or not. Here’s the technology that Wow’s top-performing agencies are using right now:
Take control of your future
One of the best ways to do this is to make sure you have your important financial information at your fingertips. A recent survey of the creative sector, found that the most popular finance solution for agencies is Xero. 56% of agencies now use Xero, compared to just 10% that use Sage's desktop solution.
Xero is beautiful cloud-based accounting software that makes staying on top of your accounts easy-peasy. The user Interface is really intuitive – you’ll have it all sussed within 15 minutes of playing with it. There’s a neat dashboard with the most important bits of financial information you need to run your business, and you can produce reports that you can easily understand at the click of a button, making it easier to be in control of your agency’s future.
Never run out of cash
The other great thing about Xero is that it takes a live feed from your bank account, allowing you to easily see who still owes you money. You can send statements to clients via email in one click, or even use one of Xero’s add-ons, such as Chaser, to do your debtor chasing automatically for you. Chaser is one of over 500 apps that integrate with Xero. They’re all designed to make your life easier and increase your profitability. Other popular apps for agencies include Float, which will help you forecast your cash flow, and Receipt Bank, which will save you hours messing around with paper receipts.
We’ve also noticed more and more agencies setting their clients up on direct debits, using tools like GoCardless that have made collecting payments via direct debit far easier & more accessible than ever before.
Achieve more profitable projects
One of the biggest challenges faced by agencies is delivering an amazing project, whilst still making a profit. We see so many agencies walking the tightrope between keeping the client happy and ensuring that the job doesn't overrun as a result of additional client requests. The reality is that there is no simple answer to solving this challenge, but a good place to start is to use a project management app to keep track of things.
With more and more agencies now embracing this technology (85% now use project management or time tracking software), there are more choices than ever before. Tools such as Agency Core, Streamtime, WorkflowMax & Synergist will all take care of your quoting, project management, time tracking, CRM, invoicing and reporting. They all link with Xero and are really easy to use. Most importantly, they’ll allow you to produce a report on your most profitable projects (and clients) at the click of a button. So, say goodbye to spreadsheets and whiteboards.... and hello to more profit!
Spend your time wisely
In a service business, how you spend your time directly impacts the profit you make. The good news is there are loads of great tools out there that will help you spend your time more profitably.
If you're not doing this already, we definitely recommend getting your clients to sign-off each stage of the project using e-signature tools such as Rightsignature or Adobe Sign. By asking your client to sign that the stage is complete, it draws a clear line in the sand and avoids endless tweaks. You can also include a reminder in this document that any amendments will be chargeable after this point. It’ll save you lots of time further down the line (or will mean you can charge extra for the work).
As an agency grows, projects can become bigger and more complex, and miscommunications are more likely to happen, often resulting in a less profitable project. Slack is great tool to help you keep your team connected and updated with the latest goings-on with clients, projects, and creative ideas - much more efficient than sending those round-robin e-mails.
Top tip for more profit
What app could you implement today that would make the biggest difference to the profit you make in your agency? How could make better use of an existing piece of software in your agency? What reports should you be looking at, but aren't?
Looking to increase your profits?
If you’d like to discuss the difference a proactive accountant could make to your profitability, call Wow on 0345 201 1580 or email info@thewowcompany.com
Content by The Drum Network member:
The Wow Company
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