Whether you want to scale or simply maximize profitability, you need an accountant who can handle your type of business.
Jesse and Tom had a hunch their in-house accounting wasn’t yielding the best results for their architecture firm, Studio 531 Architects. Here’s how Reach improved their profitability and functionality.
Jesse had been running his architectural business for five years when he partnered up with Tom to establish a larger team of top quality architects. Not interested in scaling past 20 employees, they were more focused on being small but mighty; monopolizing Vancouver Island with their unique ability to traverse both the public and private sectors. With particular focus on transportation, hospitality and residential projects, their joint vision was to be known for beautifully executed projects designed by a highly capable, adaptable team of architects.
Today, they’re widely recognized as the go-to architects on Vancouver Island but back then they kept their accounting in-house, and it presented them with all kinds of problems.
In-house accounting can work (for very small businesses)
When starting a business, a lot of owners will do the bookkeeping and business accounts themselves. This can work when you only have a few projects and you’re paying one or two employees. If you’re not sure of your running costs and you don’t even know if you can afford a monthly accountant, it can be a good short-term solution. But, given most business owners are working towards growing their financial success, it means when revenue does increase, so too do the hours spent on your accounts and the overall complexity of your systems. It’s quite typical for business owners to continue with something that worked for them in the early days. The trouble is, you’ve got to make sure the roots of your accounting are tangle-free. Otherwise, you’ll incur a backlog of incorrect financial data, along with growing consequences for those mistakes. This was where Jesse and Tom found themselves.
Business was thriving in their partnership. Starting out with a team of two plus an in-house employee overseeing some Excel spreadsheets, they grew to a team of ten. They were soon juggling cashflow, bookkeeping, payroll, multiple project budgets, and taxes and benefits on the same simple system they started with. It was becoming increasingly unsustainable, and the issues were starting to show. They were having trouble with cash flow and forecasting, and they were sometimes in their overdraft at the end of the month. They also had a huge number of invoices to send out each month and, because they didn’t have a reliable process for sending them, they experienced unexpected dry spells in revenue. This was causing the two owners regular headaches, and they knew this could be problematic for their business’s future. They decided to make some big changes in how they did their accounting, making two decisions. First, they were going to start using finance software and secondly, they were going to outsource their accounting.
Bringing financial tech into your business can hugely improve functionality.
Recalling his previous company had used WorkflowMax (project management software) and Xero (accounting software), Jesse brought the software into the business. The partners then started their search for an accounting firm to get them back on track. They knew they needed a tech-savvy firm who were experts in financial strategy and forecasting. They also needed substantial focus on the backend of their accounts, and someone to implement their new software going forward. Meticulous bookkeeping was imperative too. After a huge search for the right accountant, they chose Reach CPA.
“We did a huge search. We had a lot of options…We needed an approach that would match our want for tech...Reach CPA was the winner. They really aligned with [our] remote-solution needs. [Their references raved about them]. They had a forward-thinking philosophy [that matched ours].”
So, what did Reach do?
You can transition to a new way of accounting; it doesn’t need to transform overnight. We elected to have a transition month, crossing over with the in-house accountant, while slowly implementing our new systems. We continued to use their processes while we learned about their business. This would give us time to understand how they were working, allowing us time to correctly locate discrepancies and rectify any historical issues we uncovered. Once we were fully integrated, we streamlined their systems and helped them to better utilize their software. When the books were up and running smoothly, we started to help them plan for the future.
Choosing the right team to handle your accounts can make your business.
Now their cloud-based accounts are completely accurate and effective, and we’ve trained their team in managing costs, forecasting projects, and scheduling invoicing. We’ve explored how they charge their fees, and they now know when it’s profitable to offer a fixed rate, and when it’s smart to charge hourly. We also send out their invoices and most are paid within 45 days of sending, making the business overdraft a thing of the past!
Finding the right partnership has been key for Jesse and Tom. Their choice to join forces and start a business was an excellent one; they’ve seen huge success and realized their vision as the go-to architects for Vancouver Island. In choosing to outsource their accounting and partner-up with Reach, Tom and Jesse have solidified their success and safeguarded themselves for the future. They’ve armed the business with a firm who can handle their needs. In doing so, they themselves have become deft in projecting cash flow, financial reports and strategic planning.
Studio 531 Architects and Reach CPA’s partnership has resulted in a more functional, profitable and streamlined company. Now they’re totally equipped, with the right systems in place, ready to handle the next stage of success coming their way.
If you’re a business owner and this struck a chord, get in touch with us here. We’re always looking to partner up with more brilliant businesses.