Running a profitable small firm doesn’t have to mean sacrificing your personal life during busy season.
Johanna Sweaney Salt, CPA, CGMA, founder and partner of Gray, Salt & Associates LLP, an eight-person firm in Los Angeles County, used to work 100-hour weeks during busy season, until her son and managing partner, Dalton Sweaney, CPA, asked if there was a better way.
Dalton wanted to spend more time with his young children, so he worked with his mother to cut their busy-season hours nearly in half. They used the following strategies to reduce their hours while maintaining profitability.
Consider offering remote and flexible work options
The firm’s first step was to institute remote work policies, so people could make time for priorities, like being home for dinner. They decided that as long as the work was getting done, no one needed to be in the office every day of the week.
Most people on their team currently come into the office every other day, and they’re considering a transition to a four-day workweek. Because some tasks are better done in person while others are easier in an uninterrupted remote setting, Dalton says they typically schedule days to come to the office for in-person collaboration.
“The goodwill and the appreciation that [team members] express for having this time has really done wonders for our firm,” Salt said.
Institute a hard minimum with clients
In the past year, the firm instituted a hard minimum of $750 for tax returns. They reasoned that increased complexity with COVID-related policies, new laws, and notices, means it's never just a simple tax return anymore. The minimum has helped to increase profits while decreasing hours.
“I was shocked at how many clients went from paying under $300 to, no questions asked, paying $750, because I think they do still see the value in it,” Dalton said. “Did we lose some [clients]? Yeah, and that was intentional.”
Automate to increase efficiency
The firm has also reduced hours while increasing efficiency through automation. Many routine tasks can now be automated so team members can focus on providing higher-level services. However, some more traditionally minded clients might be averse to an increased use of technology.
“We're trying to automate and streamline so that we can provide more efficient and more valuable services,” Salt said. “It's just not going to work if we have somebody who's swimming against the current.”
Salt said they did lose a few clients for this reason, but that it was a “relief.”
Fire difficult clients
Speaking of losing clients, Gray, Salt & Associates LLP knew they needed to cull clients if they were going to work fewer hours, and it made sense to start with the difficult ones. Difficult clients include anyone who is rude to employees, drags their feet, or is no longer a fit for whatever reason. Salt said they now review their client list every year to see whether they need to terminate any client relationships.
When firing clients, they typically send a letter that says something along the lines of, "We've taken a look at our practice, and we're going in a different direction, and we regret that we will no longer be able to provide services." They also tell them what's due and when it's due.
“[Firing clients] is sometimes a good thing, and it could be positive for everyone,” Salt said.
Listen to the full interview with Salt and Sweaney on the Journal of Accountancy.
And if your firm would like to emulate the success of Gray, Salt & Associates LLP, check out the PCPS Talent Trend Toolkit, which contains information on coaching, communication, feedback, and leadership within flexible work arrangements, hybrid work, and remote work environments.