Pricing, Billing & Collection - What Accounting Firms Can Do To Run Their Businesses More Efficiently and Effectively

Accounting firms provide priceless advice to businesses. However, they often struggle to effectively run their own businesses due to inefficiencies in pricing, billing & collections. Below par performance in these areas can lead to a troubled cash flow, cuts on the bottom line and dissatisfaction among the firm’s personnel.
 How can an accounting firm improve on its billing and collections practices?
Evaluate initial client interview procedures: Formalize your client approval process.
Do not discount your pricing to gain work: Your service value is communicated by all that you do including the pricing. If you undervalue your services, you are selling yourself short.
Try to get retainers from new clients: Three months of fees is an acceptable amount to ask for at the start; after that the retainer can be replenished for ongoing work.
Adopt a centralized approach towards client engagement letters, fee schedules and billing: Your firm's administrator sending out all client engagement letters, fee schedules & billing will ensure consistency in the language and billing and collections practices.
Ensure that bills are clear and brief: With timely bills that shows clearly the products delivered, clients will be more inclined to pay their bill promptly.  This practice increases awareness of the value of your service.  For large unpaid bills, it would be best to ask for the payment in three equal installments via credit card. This allows the client to earn credit card reward points. Communicate with clients regularly. Do not call only when seeking to collect a late payment.
Give everyone who discusses billing and collections access to client spreadsheets: Allow all stakeholders access to client spreadsheets so that detailed information about the client is readily available, allowing for tracking trends and also spot clients who used to settle bills regularly earlier, but stopped doing that now.
A major part of establishing and executing an effective billing process is to levy the right fees, send in bills on time and handle collections professionally and courteously. Accountants also have to communicate their value such that the clients realize the worthiness of the service received. Failure to improve an ineffective billing process hurts the firm’s profits, cash flow and morale. Don’t let this happen to your accounting firm. After all, happiness is a positive cash flow!

Best States in the US to start a business

Texas continues to earn high marks for its welcoming atmosphere for businesses that call it home.

The Lone Star State had three cities — Dallas-Ft. Worth, Austin and San Antonio — rank among the top four friendliest for small businesses in a new poll by Thumbtack.com and the Ewing Marion Kauffman Foundation.

For the eighth year in a row, CEOs rated Texas as the top state for businesses, according to Chief Executive magazine’s annual Best & Worst States Survey.

Rankings were compiled based on a number of factors, including regulations, tax policies, workforce quality, educational resources, quality of living and infrastructure.

Overall, Texas earned an A-plus in the poll, which graded cities and states on a number of factors, including ease of starting a business, hiring costs, government regulations and training programs.

The ranking comes after last week's Best & Worst States Survey by Chief Executive Magazine, which gave Texas the top spot for its business climate.

Idaho, Oklahoma and Utah also landed A-plus grades in the Thumbtack poll for their friendliness toward small businesses, earning high marks for things like low tax rates and other perks.

Florida ranked second in the survey, with North Carolina, Tennessee and Indiana rounding out the top five.

"Although Texas and Idaho clearly come out on top as the nation's friendliest states towards small business, entrepreneurs value a lot more than just low tax rates," said Sander Daniels, co-founder of Thumbtack.com. "Easy-to-understand licensing regulations and well-publicized training programs are critical tools necessary to support small business."

On the flip side, CEOs rated California as the worst state for business due to its high state taxes and overly stringent regulations, which is driving investment, companies and jobs to other states. According to Spectrum Locations Consultants, 254 California companies moved at least some of their work and jobs out of state in 2011 – five times as many as in 2009 and a 26 percent increase from last year.

California was home to the bottom three cities — Los Angeles, San Diego and Sacramento — according to the study.

Small business owners also gave Hawaii, Vermont and Rhode Island an F, while New York, Massachusetts, Connecticut and Michigan each scored a D.

The research was based on surveys of more than 6,000 small businesses & 650 CEOs across the United States.