Your consulting business has been around for a while, but maybe you feel like there are some new ways to improve efficiency and boost your bottom line. Accounting is one area where many business owners don’t feel equipped to make changes to their business. However, it’s also where the opportunity for the most growth exists.
Fortunately, some of the accounting tips that you can follow will take very little time or effort to implement. If you’re ready to make some changes and start running a more profitable consulting business, here are our top three tips:
Track Your Time
One of the reasons that many consulting businesses lose money is by not accurately tracking the time they spend on each project. It isn’t enough to simply estimate how many hours you might spend on a given project. You need to know down to the last detail just how many minutes were spent working hard for your clients.
This is a two-fold process. First, it allows you to see how much time a project really takes, which can make it easier for you to provide estimates to your clients in the future. Clients expect to see an estimate of how many hours it will take and what you charge per hour.
If you go over what they anticipate spending, your clients won’t be pleased.
The other reason that you need to track your time effectively is to determine what the real cost is behind your project. It opens your eyes to where you’re spending time on non-billable hours and whether you need to raise your billable rate to make up for the non-billable hours you spend on each project.
By tracking your time effectively, you can easily see which parts of the project are taking the most resources and labour. It can help you keep certain departments and tasks in check if you notice that they’re consistently running over the number of billable or non-billable hours that you have accounted for in your estimate.
Of course, all of this contributes to accurate invoicing so that you can get paid appropriately for the work that you perform. This leads to the next accounting tip, spending less time on your billing.
Spend Less Time on Billing
Billing is an essential part of running a consulting firm because it’s how you ultimately get paid at the end of the day. For many companies, they wish they could find ways to streamline their billing, but they are trapped in inefficient processes, like manually entering invoices.
The good news is that there is a better way to do things that can save your precious time that could be devoted to more lucrative activities.
Most consulting businesses are already utilizing popular project management tools. Many of the most popular platforms can integrate directly into your accounting software, allowing you to create an invoice in just minutes.
If you aren’t already using project management, like Asana, then you may want to consider making the switch. It can keep everyone on your team on the same page and allow you to see where the most time is being spent. This makes keeping track of billing a lot more efficient.
The billing process speeds up substantially when integrated with project management software. Clients will receive their bills sooner, and you can collect payment for services rendered more efficiently.
If you aren’t sure how to integrate your software, it might be a good idea to get professional accounting for consulting firms from Compass Accounting. We can help you set up the right way for your business to thrive when it comes to sending invoices and getting paid in a timely manner.
Cut Back Time on Payroll
Business owners who want to keep their employees happy need to have their fingers on the pulse of their payroll. Some consulting firms are still stuck in the past with physical timecards that their employees use to punch in and out at work. However, this means that you must tally up how many hours and minutes they spent on the clock.
If you have a growing staff, then this can really eat up a great deal of your time each week.
Automating your payroll is the solution that most business owners need to embrace. You can use a digital time clock that tallies the hours spent for you. This alone will save you a lot of time. Not to mention, it reduces the risk of manual errors when adding up all of those hours.
Instead of sitting down with your calculator, you can simply review the time clock sheet and see errors quickly. Ask your employees to validate their timesheets to ensure that nothing gets missed, but otherwise, this makes it quite easy to manage your payroll and employee expenses that are required to run your business on a day-to-day basis.
Streamlining Your Consulting Firm
Running your own consulting firm is not for the faint of heart. Fortunately, there are a few quick and easy ways that you can set yourself up for success and boost your bottom line. These three top tips will help you be more profitable and save time. After all, time is money. Focus on these areas, and you will learn more about how your business runs and where it could be a bit more efficient.
If you aren’t sure where or how to implement some of these strategies, consider meeting with an accountant. Compass Accounting is experienced and knows just how to help you reach your professional goals when it comes to your income and expenses. Give us a call today to see how we can help improve your business!