Automated firms can process tax returns faster with fewer resources and are therefore more profitable.

Read on to find out how automated firms maximise their margins and how much they charge their clients.

Highly automated firms standardise their processes on one cloud accounting program for maximum efficiency and then convert all their clients to it.

For more information about the processes involved, read the Macpherson Report

How to Run a Highly Automated Xero Firm.

Compliance services are an essential ingredient but are not the focus in client relationships. Clients place much greater value on business advisory services which in turn are a big profit driver for firms.

Bank reconciliation and bookkeeping is usually done in-house by the firm. Daily reconciliation gives the client a real-time position on the financial status of their business.

Customer service is a big focus for automated firms. Often they use support-desk software to pass client requests between accountants.

* Prices charged by Australian accounting firms

Clients usually subscribe to an annual service that includes quarterly and annual tax reporting.

Additional projects are charged separately.

Automation of accounts payable and receivable, bank reconciliation and payroll throughout the year reduces the time to complete an annual tax return.

* Prices charged by Australian accounting firms

Firms can still charge a good fee for completing a company tax return despite the reduced time to complete it.

Automated firms aim to cover all operating expenses including salaries with recurring revenues automatically debited each month.

A typical practice has a ratio of one admin to four accountants. Automated processes can improve that ratio to one admin to eight accountants, or even higher.

Sources: Survey, interviews and primary research for Macpherson Report 1503 “How to Run A Highly Automated Xero Firm”. The Macpherson Report is published by DigitalFirst.com

Want to know more?Read about the apps and exact processesused by two best-practice firms in the latest

Macpherson Report:“How to Run A Highly Automated Xero Firm”.