1. 1 0845 450 5555 www.swat.co.uk Welcome Making your practice compliant, efficient and profitable Top 5 Tips for Improving Profitability Presented by: Mike Sturgess Chairman SWAT UK Limited

2. 22 1.How to grow the business 2.Pricing for profit 3.Improving productivity 4.Increasing recoveries 5.Reducing lockup Top 5 Tips for Improving Profitability Contents

3. 33 1.How to grow the business 2.Pricing for profit 3.Improving productivity 4.Increasing recoveries 5.Reducing lockup Top 5 Tips for Improving Profitability Contents

4. 44 Acquisitions still make sense if you can... Drop fees in with no additional overheads Cross-sell to client base But usually takes 3 years Fills a hole in your service offering Top 5 Tips for Improving Profitability Acquisitions

5. 55 Score your whole firm on cross-selling 1 = only sell if clients specifically asks for a service 10 = every client offered every relevant service What is your current score? What would you like that score to be? If you achieved this improvement what fees would it generate? Top 5 Tips for Improving Profitability Cross-selling to clients 4 - 5 7 - 8 £10k per principal per point

6. 66 Compliance 70% Top 5 Tips for Improving Profitability Compliance v non-compliance Non-compliance 30%

7. 77 Payroll services – preparing the weekly or monthly payroll Management accounts Quasi-FD role Cash flow forecasts and projections Top 5 Tips for Improving Profitability Common non-compliance fees Tax planning Financial planning services Corporate finance activities Fees protection insurance Outsourcing... and now probate

8. 88 Manage client referrals Actively ask 10% of clients seen each month Create a formal client reward system Top 5 Tips for Improving Profitability Client referral programme

9. 99 1.How to grow the business 2.Pricing for profit 3.Improving productivity 4.Increasing recoveries 5.Reducing lockup Top 5 Tips for Improving Profitability Contents

10. 10 Prospective new client Turnover £4m+ Sage Line 50 detailed monthly management accounts – assume no book-keeping issues Prepare and file statutory accounts and corporation tax return Attend quarterly main board meetings Pre-year end tax planning meeting Top 5 Tips for Improving Profitability Quote for a new client

11. 11 Average pricing differential quoted by partners is + or - 25% Maximum suggested: + or - 50% Create systems to avoid this Pricing wizard / fixed price model Second review of prices One-year only price if guessing! Top 5 Tips for Improving Profitability Pricing

12. 12 1.How to grow the business 2.Pricing for profit 3.Improving productivity 4.Increasing recoveries 5.Reducing lockup Top 5 Tips for Improving Profitability Contents

13. 13 37 hours x 52 weeks = 1924 hours After holidays, bank holidays, sickness and training = 1665 available hours Top 5 Tips for Improving Profitability Remember...

14. 14 PositionRange Bench mark Principal750 – 1,2501,000 Manager (with no admin duties) 1,300 – 1,6001,450 Qualified / non-studying 1,350 – 1,6501,500 Students1,000 – 1,5001,250 Top 5 Tips for Improving Profitability Productivity

15. 15 Top 5 Tips for Improving Profitability Principal productivity

16. 16 Top 5 Tips for Improving Profitability Principal productivity

17. 17 Top 5 Tips for Improving Profitability Principal productivity

18. 18 Top 5 Tips for Improving Profitability Principal productivity Partner Partner chargeable work Profits A£156,000£162,320 B£90,000£101,600

19. 19 Use 6 minute units Record time in real time Meetings with yourself Set productivity targets Non-chargeable time must be authorised and explained Control non-chargeable time Top 5 Tips for Improving Profitability Increasing productivity

20. 20 1.How to grow the business 2.Pricing for profit 3.Improving productivity 4.Increasing recoveries 5.Reducing lockup Top 5 Tips for Improving Profitability Contents Pg 1

21. 21 100% recovery is poor! Work on your pricing Round up, not down. Formal approval for 10% write-offs. Set budgets on all jobs. Set proper working standards in the office. Top 5 Tips for Improving Profitability Increasing recoverability

22. 22 1.How to grow the business 2.Pricing for profit 3.Improving productivity 4.Increasing recoveries 5.Reducing lockup Top 5 Tips for Improving Profitability Contents

23. 23 Clients rarely pay if you haven’t raised a bill Use standard billing paragraphs Delegate the billing Identify the top ten or twenty WIP clients Set WIP standards by partner and manager Use direct debits wherever possible Money in advance for urgent work Check books & records before starting work Top 5 Tips for Improving Profitability Work-in-progress

24. 24 Use red paper or write in red ink for the ‘final demand’ Do not make threats that you are not prepared to carry out Delegate the raising of the follow-up letters and chasing debtors Consider using a discounting scheme Top 5 Tips for Improving Profitability Debtors

25. 25 On ‘clock’ / fixed fee:£1,800 Add 1/9 (£200) and bill client£2,000 VAT on £1,800*£315 £2,315 If paid by 18 June, deduct £200, leaving £2,115. Otherwise, strictly 30 days net *From 1 April 15 VAT will be due on the actual consideration paid Top 5 Tips for Improving Profitability Discounting: Inv 4 June 14

26. 26 Charge interest on overdue accounts Top 5 Tips for Improving Profitability Debtors

27. 27 On ‘clock’ / fixed fee:£1,800 Add 1/9 (£200) and bill client£2,000 VAT on £1,800*£315 £2,315 If paid by 18 June, deduct £200, leaving £2,115. Otherwise, strictly 30 days net. Interest will be charged at 1.5% per month (APR 19.57%) *From 1 April 15 VAT will be due on the actual consideration paid Top 5 Tips for Improving Profitability Discounting: Inv 4 June 14

28. 28 Consider using MasterCard and Visa Top 5 Tips for Improving Profitability Debtors

29. 29 On ‘clock’ / fixed fee:£1,800 Add 1/9 (£200) and bill client£2,000 VAT on £1,800*£315 £2,315 Payment by MasterCard or Visa accepted. If paid by 18 June, deduct £200, leaving £2,115. Otherwise, strictly 30 days net. Interest will be charged at 1.5% per month (APR 19.57%) *From 1 April 15 VAT will be due on the actual consideration paid Top 5 Tips for Improving Profitability Discounting: Inv 4 June 14

30. 30 Include your terms of credit in your letter of engagement Discuss payment methods with clients Offer a menu approach Clients should not be surprised by the amount of a fee note Notify clients in advance of changes... Top 5 Tips for Improving Profitability Debtors

31. 31 Top 5 Tips for Improving Profitability

32. 32 If all else fails... Partners’ capital must match same partner’s lockup! No billing? No cash collection? No drawings! Top 5 Tips for Improving Profitability Controlling lockup

33. 33 0845 450 5555 www.swat.co.uk Welcome Making your practice compliant, efficient and profitable Top 5 Tips for Improving Profitability Was presented by: Mike Sturgess Chairman SWAT UK Limited