Volume, value and velocity: the new growth metrics for modern accountancy

The metrics our firms relied on in the past will not tell us the full story as we head into an increasingly complex future.

Take billable hours, for example. Do they tell you how much value your practice is adding to the client, or whether they will stay with you?

Does your staff headcount describe the potential of every team member?

Will client numbers highlight how much success you extract from every opportunity?

Older metrics, such as these, which were very popular when I worked for a Top 500 accountancy firm, need updating.

A new view of growth for accountancy

With that in mind, what are the “new” metrics?

We need to consider volume, value and velocity: what I call the “Three V’s”.

The Three V’s can be a vital benchmark in your quest for success, which is why when we ran a recent webinar about growth, we started there.

1. Volume: a modern approach to a traditional metric

Headcount and client numbers can still be relevant if they increase as a result of a deliberate strategy.

For example, one traditional way of adding this volume is through mergers. It’s a way to increase client and staff numbers dramatically, almost overnight.

However, you need to assess the role an acquisition will play in your growth journey. Will its new staff bring the correct expertise? Will you get the right clients for your portfolio? How will acquiring this business position your firm in the marketplace?

Some accountancy firms are well-placed to manage growth through volume. They can access data and plan in a way that allows for adding more staff and clients smoothly. However, a volume-focused approach is not suitable for every firm. Those firms that cannot consider this as an option must focus on value and velocity instead.

2. Value: new services and insights that help clients succeed

Adding value is where real growth happens.

But what does this mean for your clients?

When I say “adding value”, I mean adding new services and a more in-depth approach that helps clients succeed. It can mean offering new services, such as advisory, payroll, or specialist tax support. It could also mean using data to predict client needs or clarifying what’s holding them back.

How does adding value help your firm? By working closely with a client over a long period, you become so deeply embedded in their business that they wouldn’t dream of going anywhere else.

You help them more, and they pay you more; you grow and succeed together.

3. Velocity: better, smarter, faster work

There is a third method of growing. It needs no new clients, staff, or services.

That third way is velocity: you deliver your existing services in a better, smarter, faster way.

To do that, you need to realise the investments you already make in your growth. Firms achieve this by re-evaluating their tech stacks, staff, and processes to get more efficient.

Although this is an involved process, you begin by answering a simple question: what can you do better with the resources and systems you already have?

Opportunities to grow – some more highlights from our webinar

Our webinar didn’t stop at these modern metrics for growth.

We also looked at major external factors affecting firms of all sizes. How can we turn any adversity into an opportunity to grow and add value for our clients?

Here is a summary of the topics we covered in our 90-minute event.

MTD

Making Tax Digital (MTD) has caused its fair share of sleepless nights. But, with the right approach, it can be a profitable opportunity for accountancy firms. Through smart prioritisation and effective communication, we discussed how firms can help clients enjoy a pain-free move to MTD.

Improving retention

For many firms, the talent gap is real, and recruitment is tough.

So, how do you make sure your staff never want to leave? Among other things, we discussed how, by equipping them with additional skills, we can enhance the value they deliver. When that happens, you keep work more interesting; staff never outgrow their role and are much more likely to stay.

Mindset matters

Change is constant, so it’s important to adopt a “win or learn” mentality.

The experts in our webinar explored how that means empowering the right people, whether that’s seasoned professionals who can lead by example or new hires full of fresh ideas.

Webinar: get expert insights on how to deliver more value and grow

This blog barely scratches the surface when it comes to the indispensable advice our experts gave about growing as an accountancy firm.

So don’t miss Resilient and ready: how leading firms are driving stable growth and long-term value. You can watch the webinaron demand.

Get insights from myself and these leading minds in the industry:

• Steve Cox, Director of Business Intelligence, IRIS Software Group
• Nikki Adams, Joint MD of Ad Valorem Group
• Nick Paddenburg, Owner, Brighton Tax
• James Jarman, Partner, Galloways Accounting

Click here to sign up and watch today.