180 ⎸ How to Make this Year More Profitable

Hey ambitious bookkeepers!

In this solo episode, we’re diving into some killer strategies to boost your profits in the new year. We’ll chat about updating your systems, tracking those important numbers, and all the behind-the-scenes moves that can make 2025 your most successful year yet!

Listen here or on your favorite podcast player, or watch the video version on YouTube >>

Now let's dive into some highlights!

Taking Advantage of Downtime

As 2024 wrapped up, we all probably experienced that holiday lull. But rather than binge-watching Netflix on your couch (okay, maybe do a little of that too), why not use that time to prep your business for the year ahead? If you didn’t utilize the downtime, no worries, you still have a golden opportunity at the start of this year.

Engagement Letters: Let’s Get Updated

One of the first things on my list was updating our engagement letters. I added a few new clauses that I think you might find helpful.

1. Surcharge for Commingling: We've implemented a $100 monthly surcharge for clients that frequently mix personal and business transactions. It's a lifesaver when it comes to keeping bookkeeping efficient.
2. Client Preferences for Report Delivery: We’re now giving clients the option to choose when they receive their monthly reports. Most went with 'no preference,' which is fantastic—it lets us manage our workload more flexibly.
3. Scope Updates: If a client’s scope has increased due to business growth, it’s time to reflect that in their engagement letter (and pricing!).

Running a Profitability Analysis

Before you go updating things willy-nilly, a profitability analysis is a must. Here’s what I do:

• Time Tracking: We swear by Clockify to track all hours spent on client work. This data is pure gold when you’re assessing client profitability.
• Software Costs: We cover costs for tools like Xero and Tax Jar. It's essential to account for these when calculating profitability.
• Fee Structures: Whether you charge a flat fee or an average of hourly rates, make sure it jives with your profit margins.

Special shoutout to my biz bestie, Alyssa Lang, for her awesome client profitability tracker—trust me, it’s a game-changer.

Big Savings with Software Tweaks

We did a little digging into our software subscriptions and realized a switch could save us big bucks. Downgrading some of our client's Xero plans netted us $252 per month. That’s an annual savings of $3,000 straight into our pockets without extra work!

Price Increases with Impact

Not all clients need a fee hike, but for those who do, our new pricing structure could bring in an additional $4512 annually. Combine that with our software savings, and we’re already looking at over $7,500 extra profit this year. Not too shabby, right?

Final Thoughts

Look, these steps may seem a bit tedious, but trust me, spending the time now to set everything straight ensures a smoother ride throughout the year. Here’s to a profitable 2025!

I’d love to hear how these strategies work out for you. Drop me a line on Instagram or tag me in your progress posts—can’t wait to celebrate your wins!

Catch you next week, and happy bookkeeping!

Thanks for reading, and as always, a big thank you to everyone that makes The Ambitious Bookkeeper Podcast possible. Check out the show notes for all the resources I mentioned. Cheers!

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For experienced bookkeepers & accountants:

Learn how to start your bookkeeping business in The Bookkeeping Business Accelerator® >>

Grab my FREE Start your Bookkeeping Biz Checklist >>

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Learn the fundamental accounting skills in Katie Ferro's Become a Bookkeeper >>

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Become a client at my firm, Of Course Financial >>

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