Wednesday, September 24, 2008

Revenue Enhancement Innovation

I am proud to brag about one of my clients, Wall, Einhorn & Chernitzer, P.C., winners (for the second year in a row) of a Practice Innovation Award sponsored by Practical Accountant. Wall, Einhorn & Chernitzer, P.C. formed its Revenue Enhancement Committee (REC) about 18 months ago to focus client retention and acceptance, and on pricing. The REC meets monthly as well as communicates via e-mail between meetings.

Activities of the REC include:
· Establishing client acceptance criteria.
· Strategizing pricing options for clients and new business prospects.
· Evaluating the lowest realization clients (largest write-offs) for each partner and manager and brainstorming ideas to improve work efficiency and job profitability.
· Developing a Client Evaluation Form (and process) for use by managers to identify problem clients and solutions.
· Reviewing WIP adjustments.

The REC’s efforts have resulted in 10% improvement in realization. This is attributable to many factors initiated by the REC including better pricing, more discussions with clients regarding preparation they can complete to make our work more efficient, more up front discussions with clients about fees, and better management of fees incurred while work is ongoing.

The benefits of the REC’s efforts also include:
· More input from managers on client billing and about clients, in general.
· Many procedural features that improved WEC’s own quality control.
· Identifying additional service opportunities that were communicated to clients resulting in better client service and extra fees.

What I've learned so far is that marketing plays a role in enhancing a CPA firm's revenue. Understand how your firm works and how it makes money. Know your firm's client base. Assist your firm's partners and managers with revenue-enhancing ideas and implementation.

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