August 1999



By Andrew D. Schiff

In a previous article published in this column ("Taking the Fear out of Getting New Clients," July 1998), a number of tactics were discussed for marketing accounting services to small businesses. These tactics were developed over 20 years of experience assisting accountants that target the small business market. They have worked in a variety of contexts, and are particularly useful for practitioners just beginning to acquire clients.

One of the primary tactics that was discussed was to emphasize the benefits of the accounting services being offered.

The following list of more than 40 ways to increase the cash flow and profits of a small business through accounting services was developed in response to requests for specifics. They are grouped into sections based upon the procedures that generate them. Some of these benefits will appear obvious to those with strong financial backgrounds, but to small business owners they are often not apparent.

The benefits can be used in a variety of marketing efforts. They can be incorporated in brochures to prospective small business clients or in newsletters to existing clients that have not yet decided to take advantage of accounting services. They can be the focus of presentations to local trade and industry groups. They can also be used to train staff to help clients better appreciate the accounting services they already receive, or to promote additional accounting services. Small business owners and managers quickly see the relevance of the benefits. They are written in plain English, avoid technical accounting terminology, and are phrased as if the accountant were speaking directly to the small business owner.

Benefits of Accurate Records of Accounts Receivable

  • You will know which customers are behind in paying you, so you can communicate with them on a timely basis.
  • You can accurately calculate interest and collect it from overdue accounts.
  • You can send out professional-looking customer statements on time that increase the likelihood you will be paid on time.
  • You will no longer lose track of customer invoices.
  • You will stop making sales to customers that haven't paid their bills.
  • You will not risk losing customers because you didn't record their payments properly, or on time.
  • You will reduce your need to borrow due to poor cash flow.

    Benefits of Maintaining Perpetual Inventory

  • You won't lose sales because you're out of stock on fast-selling items.
  • You will avoid rush delivery charges to obtain out-of-stock items.
  • You won't waste funds buying more of what is not in demand.
  • You will reduce the need to sell a product at a loss because you didn't take markdowns on time.
  • You will be able to set your selling prices based on profit goals instead of by guessing what the consumer is willing to pay.
  • You will be able to concentrate on selling the most profitable items instead of those that are the easiest to sell.
  • You will be able to reward your sales force based on the profits it generates for your business, rather than on gross sales or units sold.
  • You will be able to identify profitable cross-selling opportunities.
  • You will know which product lines to expand because they're profitable and which lines to drop because they're not.
  • You will be able to find out if you have a theft problem before it threatens your business.

    Benefits of Accurate Records of Current Liabilities

  • You will never pay a bill twice by mistake.
  • You will reduce the amount of discounts lost from paying vendors late.
  • You will be able to plan for payment due dates and reduce the need to borrow from a bank or personal funds.
  • You will be able to obtain better credit terms based on a good payment
  • You will be able to improve your credit rating and keep your borrowing costs low.
  • You will know how much payroll and sales taxes you owe on a timely basis, so you can avoid penalties and interest.

    Benefits of Accurate Records of Cash Receipts and Disbursements and Bank Reconciliations

  • You won't write a bad check by mistake.
  • You won't pay bad check service charges.
  • You will be certain that all cash receipts are credited to your account.
  • You will know if an unauthorized check has been written.
  • You will know when you have excess cash so you can invest it to earn interest.

    Benefits of Accurate Expense Records

  • You will be able to keep track of all of your expenses in detail, and you will know which ones can be cut back.
  • You won't overspend a budget by mistake.
  • You will get the maximum possible tax deduction for the expenses of running your business.

    Benefits of Monthly Financial Statements

  • You will know how much profit you've made and what your business is worth each month so you can--
  • decide when and how to grow or to cut back,
  • plan accurately for taxes,
  • save hundreds to thousands of dollars on year-end tax preparation fees,
  • comply with the reporting requirements of a business loan,
  • respond quickly to any supplier or customer's request for current financial information.
  • You will be able to understand the difference between profits and changes in your cash balance.

    Benefits of Job Costing and Process Costing

  • If you keep track of revenues and costs by job or project (e.g., contractors, attorneys, and landlords)--
  • you will know on an ongoing basis which projects are profitable and which ones aren't,
  • you will be able to get paid on a timely basis as you complete the job,
  • you can avoid committing resources to projects where progress payments are overdue.
  • If you manufacture or assemble products--
  • you will know what it costs to make each item,
  • you will be able to set selling prices that cover your costs and earn a fair profit,
  • you'll know what product lines to expand because they're profitable, and what product lines to drop because they're unprofitable.

    It is no doubt possible to identify other benefits in addition to those listed above, both for a typical service or merchandising business and for more specialized types of organizations (e.g., medical and dental practices and nonprofits). However, one caution should be noted. When reading a brochure, small business owners can typically only absorb about 10 to 15 of these benefits before their attention begins to turn to other matters. Therefore, it is best to emphasize only the ones that are most relevant to the prospective client.

    Experience has shown that the majority of prospective clients are not highly price-sensitive to the value-added services that CPAs offer. If a small business owner or manager is convinced that she can benefit from the services offered by an accountant, she will be likely to engage the accountant's services when the fee is reasonable. Small business accountants that emphasize the benefits of their services for increasing the cash flow and profits of the business, communicate in a manner that the small business owner or manager can easily understand, are sensitive to the needs of the prospective client, and patiently generate leads and pursue them will reap the rewards of a growing practice. *

    Andrew D. Schiff, PhD, CPA, is president of the Center for Small Business Accounting in Baltimore, Md. He is also an associate professor of accounting at the University of Baltimore. He can be reached at (410) 882-7862 or

    James L. Craig, Jr., CPA
    The CPA Journal

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