1 / 35

Practice Support Services Top tips on practice management

Practice Support Services Top tips on practice management. John O’Donnell 6 December 2011. John O’Donnell. Graham Bale. The PSS Team. Catherine Woodthorpe. Top tips. Practice profitability Practice management Risk management Strategy for 2012. Practice profitability.

claire-lamb
Download Presentation

Practice Support Services Top tips on practice management

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Practice Support ServicesTop tips on practice management John O’Donnell 6 December 2011

  2. John O’Donnell Graham Bale The PSS Team • Catherine Woodthorpe

  3. Top tips • Practice profitability • Practice management • Risk management • Strategy for 2012

  4. Practice profitability

  5. Problem to overcome • Lock-up • Work in progress plus debtors • Problematic issue • Varies significantly • Barrier

  6. Billing bases • Historical charge-out rates based on hourly fees • Issues • Bad debts • Lag in payment • Cash-flow disadvantage • Overdraft • Client relationship issues

  7. Alternative bases • Fixed fee • Useful for basic compliance services • Cost estimation easy • Standing orders or direct debits • Advantages • Clients pay regularly • Firm receives funds regularly • Mutual cash-flow advantage

  8. Things to consider • Menu of charges • Different cost for same service based on different levels of transactions, complications, etc • Make sure you take all into account before quoting • Include annual meeting with the client • Consider retaining hourly fees for more complex and non-routine work

  9. Maximisation of fees • Contractual terms • Ensure that the terms clarify the work to be done on fixed fee • Base fee on provision of information • complete and • on time (to your pre-agreed deadline) • Clarification of scope • For ad hoc work have separate bespoke engagement terms and make sure the client understands that this is not included in the fixed fee

  10. Collecting over-runs • Improvement of billing efficiency • Fee £1000 • Inefficient client • Fee £1000 • Additional cost £ 150 • Total £1150 • Actions • Tell client before doing additional work • Client aware • Make sure staff know they need to tell you immediately a problem is apparent

  11. Setting reasonable charge-out rates • Charge-out rates vary considerably • Use them as reasonable target • Focus on under-achievement • Ask why • Is it your fault or the client’s? • And how can it be better managed in future? • Leading to • Better use of the staff you have to do more work and improve fee income

  12. Addressing under-recoveries • Bill the fee • Write-off under-recovery • If you retain it • Do not carry the balance forward • Carrying it forward will distort next year’s results (and this year’s!)

  13. Optimise recovery • How can you optimise recovery? • Many ways • Charge an element before starting work • Good for poor payers • Good for larger clients with work spanning some while • Bill fees once £x of recoverable wip • Standing orders • Direct debits • Credit card • Standard firm’s procedure makes implementation easier

  14. Should you keep time records? • Benefits of moving to fixed fees is no need to retain them • (so long as your engagement terms are drafted correctly) • But • How can you be sure your fixed fees are correctly calculated without a point of reference • And how can you periodically check? • How can you assess staff efficiency? • Do you pay staff a bonus? If so, how will you measure it? • What about the partner-level ad hoc work?

  15. Credit control • Should be process in place • Mechanistic • When to raise fees? • Not month end – raise as soon as possible • Credit control pre-set timings • Bill plus a period • Reminder • Second reminder • Credit control phone call

  16. Credit control • Credit controller to have a script • Then take action • Partner override of credit control process to be avoided (or justified)

  17. Practice management

  18. Expanding the business • Set partners and senior employees key performance indicators (KPIs) • Include • recoverability • billing and cash collection • Generation of new business • Be careful not to compromise quality and professional standards (including ethics)

  19. Expanding the business • Set budgeted chargeable hours for staff to recover • Clarify and agree how these will be measured • Ensure a reasonable measurement tool is in place • What if staff achieve their target? • Incentivisation • Bonus?

  20. Acquisition / merger • Dealt with separately

  21. Differentiation • Brand • Presentations • Web presence • Client perception • Positive first impressions • Corporate colours • Corporate logos • Messages to clients • Layout of correspondence

  22. Pareto analysis • 80:20 principle • Analysis of client base to clarify clients for whom you want and are able to provide more services • Questions to ask • Take action based on answers

  23. Focus on markets • Specialism • What areas could you focus on? • What interests you? • Where do you have experience/interest/specialism? • What are specialist markets?

  24. Risk management

  25. Professional indemnity insurance (PII) • Requirements – icaew.com/regulations • Cover must be with participating insurer • Can have excess of up to £30,000 per partner • If licensed for DPB and undertaking insurance mediation work (typically certain fee protection insurance) additional requirements

  26. PII • Excess PI above required level (secondary cover) can be with non-participating insurer • Consider risks your firm may be exposed to eg (but not restricted to): • High value or complex tax computations • Strategic tax advice • Complex tax solutions • Audit of high value or judgemental balances • Based on these, is your PII at a sufficient level?

  27. Engagement terms • Review them regularly • Are they up to date? • Ensure that they reflect what you do for your clients • Update changes to services you provide • Prevent ‘scope-creep’ • Consider merits of limiting liability • Take advice as necessary

  28. Strategy for 2012

  29. Strategy for 2012 • Do you have a strategy? • Valuable to take time to consider plans for the future • Make it a formal document • When? • When you have time to reflect • Enjoin your partners • Include your senior staff • And inform everyone of the key messages

  30. What to consider • Gaining referrals from current clients • Ensuring that you recover the RPI increase in fees to clients • Communicate why you are raising your fees • Consider introduction of standing orders/direct debits

  31. Practice Support Services • Practice Support Services team is Catherine Woodthorpe, Graham Bale and John O’Donnell • Services explained on next slide • Confidential and exempt from duty to report misconduct • To find out more or to book a coaching session: • call +44 (0)1908 248 250 or • email practice.services@icaew.com

  32. Practice Support Services • Audit • Clarified ISA coaching • Audit compliance reviews • Solicitors Accounts Rules reviews • Bespoke coaching and compliance reviews • Practice assurance and DPB compliance reviews • Consultancy • Practice management • Practice succession planning • Anti-money laundering coaching • Ad hoc consultancy

  33. Q & A

More Related