Double Your Income by Getting Rid of Receivables in Your Firm
Kelly Gonsalves, Founder of Totally Booked, has only run her firm for a short while, yet, after a recent conference visit, she discovered how to double her income by getting rid of accounts receivables entirely.
Meaning, gone is the grumbling and panic runs to the mailbox hoping your client check is there. Take a listen to what she did.
In this episode of the Growing Your Firm Podcast by Jetpack Workflow Software, David Cristello and Kelly Gonslaves discuss:
- How to set up your pricing packages so clients are happy to work with you
- The #1 catalyst that completely changed Kelly’s bookkeeping practice
- How to get rid of receivables and enjoy a regular cashflow every month
- Scaling New Heights Conference
- Totally Booked NYC (Kelly’s firm)
- New York City Proadvisors Meetup
- Kelly’s Twitter
- LINKEDIN – Kelly Gonslaves
- Change your accounting firm — charge 80% more and do 25% less work (interview)
Step One: Set Up Your Pricing Correctly:
Kelly Gonslaves, a bookkeeper in New York City, runs a virtual bookkeeping firm and has done so for just three years. However, in one month, she managed to rip up all receivables and bank double her revenues 6 months later.
Her clients aren’t any different than most. She works with service-based businesses, an artist, an author, a PR firm, and others. Her services are similar too. Kelly helps some clients with consulting, others she takes over their books, payroll, bill pay, vendors and tracking.
At first, she charged by the hour like most firms. A task was checked off as completed, an invoice prepared and stamped, then hope the client pays so you can keep your lights on. Sounds dire, but that’s how many firms operate.
Here’s how Kelly breaks down her pricing today:
- She has packages for different levels of “support” she provides. For example, her lowest package, the “Support” package is simply $150/month that provides a few phonecalls and emails of help. No bookkeeping, just guidance. At the top of the ladder is her “Totally Booked” package that goes for a minimum of $3,500/month and handles tons of different services. This “Package” is great for owners who want everything off their plate and not to stress about it.
- She presents different packages to new clients and lets them make the decision. People love options. This flexibility is very appealing to business owners who want to feel in control
- Next, she can easily bump clients up and down the package ladder. The low priced “support” package is a great way to get a client’s foot in the door and keep you top of mind when they’re ready to upgrade.
- Last, she gets the clients on an automatic monthly, even weekly, payment system where they pay first, and you do the work later. This eliminates accounts receivable.
The Magic Moment that Brought On This Massive Shift in Her Business:
Let’s step back for a second. Kelly’s aunt first introduced our hero to the idea of bookkeeping as a career. She asked Kelly “would you rather work for one client and do their bookkeeping, or many small businesses?”
Kelly, loving the idea to meet new folks regularly went with door number two. Her aunt was a Quickbooks Proadvisor and thus could show her the ropes. For the first two years in business, Kelly would wake up, check her schedule and then subway around to various clients on-site.
As you can imagine, this got pretty tough to repeat day-in and day-out.
Then, in 2017, Kelly attended a conference. This conference changed everything. The conference? Scaling New Heights 2017. This conference has grown to become one of the leaders in product training and practice development. It’s all for accountants so you can attend next year.
Her mind was blown right away. At the event, she met with industry leaders — people she’d heard and read about but never met — she discovered new apps that could cut hours, even days out of her work schedule each year. Stuff she didn’t know was out there. She learned about data entry and automation like a pro.
It didn’t stop there.
With her new found confidence and advice, Kelly started taking her Proadvisor page on Intuit’s site extremely seriously. Clients got pinged to leave reviews and today she has over 32 5-star reviews. That alone has propelled her to #2 in all of New York City. It’s not uncommon for a few leads each week to hit her inbox.
Not only that, due to these new applications and time-saving maneuvers, she’s able to take on these clients in stride because there’s less wasted hours. Because in July 2017 when she got back from the conference, she reached out to all of her clients letting them know two things:
- Everyone (she means EVERYONE) will be moved to Quickbooks Online so Kelly can work from her own office and not on-site
- All the clients would move to fixed billing each month. No more work and invoice later.
How did she do this?
Step Two: Move Clients Off Receivables and Lock Them in for At Least 12 Months:
For many, making a big move — like taking your clients off receivables — is a scary image.
Will any leave? Will I get angry emails?
Here’s Kelly’s results to start. In 6 months, she had doubled her income from the prior 6 months. She also has a predictable income stream she relies on. Because when clients sign up, they must commit to a 12-month agreement.
On top of that, the first of the month (or the first Monday), her fee will be deducted from their bank account. That way she’s paid upfront and not after the fact.
As for attrition. Get this. ZERO clients left because of this. In fact, they were happy to hear Kelly would be more productive working from her office and not in a makeshift office in their closet at their business. To keep the power of face-to-face, she utilized ZOOM so to video chat whenever they needed to.
None of the clients pushed back on the new pricing.
If you’re curious how she came up with her prices per month, she admits it’s not perfect yet. Still, here’s what she did. She looked at what the clients had paid roughly each year since they were working together (annualized if they are newer and less than a year old). Then, she would tack on 10% and divide by 12.
Obviously, if the clients wanted to upgrade their packages, they could and pay accordingly.
Clients liked this because it was a predictable expense they could plan for.
Meanwhile, Kelly enjoys a relaxing income flow that she can count on.
Kelly was able to start doing this right away when she got back from the conference. It doesn’t take a ton of work. You just got to do it.