Eleven years ago, Lynne Moffat went from human resources professional to running a successful Hertfordshire bookkeeping practice with her husband. This is their growth story.
In 2011 Lynne Moffat and her husband Alistair decided to shake up their professional lives and start a bookkeeping business. Five years into operating a successful franchise in Hertfordshire, they were ready to go it alone and The Bookkeeping Department was born. In late 2022, Lynne joined Heather at our Amplify Your Growth event for a virtual chat and to share their journey so far.
In this Growth Story, you’ll discover:
- How Lynne and Alistair changed their careers to run a bookkeeping practice
- The benefits of a non-sector niche and moving to one software provider
- How The Bookkeeping Department scaled 20 to 50% each year (even with a large, UK-based team!)
- Lynne’s secret to growing monthly recurring fees by £500 to £1500 per month
If you’d like to listen to or watch the conversation, click below for the YouTube video of Lynne’s chat with Heather.
Fun fact: Lynne wasn’t always in the bookkeeping world. Prior to starting The Bookkeeping Department, Lynne and her business partner (and husband), Alistair, had careers outside of accountancy. Based in Hertfordshire, Lynne was a human resources leader and Alistair was a product and inventory manager. Lynne had always wanted to run a business and create an asset for when they choose to retire. With five years of running a franchise bookkeeping practice under their belts, they struck out on their own with The Bookkeeping Department.
Setting up the business
After five years of running the franchise business, Lynne and Alistair felt confident to run their own practice. The Bookkeeping Department was set up as a comprehensive outsourced bookkeeping solution. They support business owners and accountants to ensure the financial foundations of their company are under control, up to date and accurate.
A snapshot of The Bookkeeping Department:
- A purely bookkeeping practice
- Outsourced bookkeeping solution for Hertfordshire, Cambridgeshire and Bedfordshire (and UK-wide) business owners and accountants
- Xero-based - all clients are on one software
- UK-based team of 12, plus a team of local freelancers
- Xero training and support is offered for those who choose to do their own bookkeeping
Committing to growth
Lynne credits five strategic decisions that have resulted in the business scaling 20 to 50% annually:
1. Taking the leap to go all in
In the early days of their franchise business, Lynne and Alistair were still in full-time employment. They quickly realised this would hinder steady growth and made a plan for Alistair to leave his job first, with Lynne soon after.
2. Hiring right
With Lynne’s HR background to guide them, Lynne and Alistair have employed the right people at the right time and have a knack for finding team members with the right values, expertise, attitude and potential. Growing the team has never been about finding the “perfect” employee as they know that some of the technical bits can be taught. This being said, robust skills testing has been important to prevent expensive hiring mistakes.
3. Leaving the franchise
Joining the franchise was a good decision, but leaving the franchise was also a good decision. Coming from a non-bookkeeping background, the franchise support was helpful for software, training and marketing. After five years, they felt steady on their feet and chose not to renew. This gave them the freedom to market anywhere, not just in one territory, and with their own website and brand.
4. Becoming a Xero-only practice
While it still worries Lynne a bit to push back on clients if they are not on Xero, choosing to be Xero-based versus sector-based has proven fruitful. The decision has helped to attract and retain the right type of clients and created much-desired efficiencies that any practice wants to have!
5. Always setting a target and knowing your channels to market
The Bookkeeping Department consistently grows between 20 to 50% annually and the focus to achieve this comes from setting a goal from which monthly objectives are identified. As an example, Lynne’s current monthly target is to achieve £1000 of new recurring revenue. Equally important for Lynne and Alistair is knowing their four channels to market:
- Client referrals
Getting through the hard times
If you think about it, it’s ‘easier’ to scale an accountancy practice. As we all know, beyond the bookkeeper and maybe a part-time admin, a bookkeeping business with a larger team is a resource-heavy solution. A larger model needs quality control, management, support and training. Taking into account price sensitivities and bookkeeping rates varying across offshore rates (lower) to accounting firms providing the service (higher), there isn’t much margin with employee wages factored in.
“You get to a point where you’re all in or you’re not going to scale at all. And we’re all in now.”
The main goal was always to run a business and scale it into a profitable asset for the ‘later years’. So how have Lynne and Alistair navigated this challenge and started to see £500 to £1500 in increased fees each month?
Landing the first and subsequent clients
Starting a business (even as a franchise) is not for the faint of heart. It took Lynne and Alistair six months of dedicated networking and marketing to sign their first client. Client and accountant referrals now make up the majority of new business, but Lynne and Alistair were once attending five to six networking meetings a week(!). It was hard work but a strong network and consistent marketing (LinkedIn and website) have made for good momentum, timing and growth over the years.
Finding the confidence to turn away clients
After working hard to build a client base, the fear of turning away business is natural. But Lynne’s confidence and comfort level with being solely Xero and pushing back on non-Xero clients has grown in leaps and bounds. Clients are willing to switch and since making the decision to be on one software, The Bookkeeping Department has moved many new clients over to Xero. Interestingly, this has also created a separate offering: Xero training. This service is for clients who aren’t quite ready to hand over the bookkeeping or just want their staff to be spot-on with the software.
Repricing to improve cashflow
Raising fees is never an easy process. Mostly because we all have that worry of losing clients. However, fee changes must be made to increase cash flow, particularly with a large team of people. Lynne calls the repricing exercise a continual work in progress that needs to address two issues:
- Lack of consistency as the repricing process has thus far not been annual, but incremental.
- How to better quote for work.
To address this, The Bookkeeping Department has moved to a fixed fee direct debit model, starting with new clients. New clients are also billed in advance on the first of the month and are billed a Xero health check on signing. This allows the team to review the status of the client’s books and identify any needed remedial work (which is subsequently quoted for and charged), from which a fixed fee can be quoted in a more timely and accurate way. In the past, this work would have been done for free, but it was not cost-efficient or efficient in general to continue doing this.
With existing fixed-fee clients, a compromise was made to move from end-of-month billing to sending invoices seven days earlier on the 21st of the month. This way the company is paid before the staff wages are due.
Initially, Lynne and Alistair worried about making these changes, but no one has batted an eyelash. In fact, new clients appreciate the health check.
The struggle of stepping back
With a 12-person team in place, Lynne and Alistair’s roles have inevitably evolved. The change is welcome but the ebbs and flows of business ownership and managing a team mean that things don’t always go to plan. Lynne admits she feels frustrated when she gets pulled back into the technical, and Alistair (who is a bookkeeper to the bone) has found he’d like to step back from the tools. It’s all a work in progress and they’ve taken some key steps:
- Hired an Operations Manager last year to give proper line management support and fill any skills gaps (a very good decision!)
- Alistair now works four days a week instead of five but still does some bookkeeping work
- Lynne will also move to four days a week once a particular milestone has been achieved
- Systems and processes are evolving and weaving through the team for consistency
Lynne is also working on building up her and the confidence of more senior members of the team to delegate, teach and coach (and not just do it because it’s simpler — it’s not).
Lessons learned: key takeaways from the journey so far
Lessons Lynne has learned in her business growth journey so far:
- Though it’s scary to move to one software, it creates efficiencies and cost-savings across the board
- It’s okay to say no to clients
- Always have a goal and work from that
- Your network is your net worth
- It takes around three months to fully onboard a new client
- Robust testing and flexibility are important for finding and retaining the right team members
Lynne looks forward to continuing to grow The Bookkeeping Department to its full potential and eventually working a four-day week. The repricing exercise continues and the business and team continue to grow.
** The Bookkeeping Department is a Xero-based bookkeeping practice supporting clients across the UK. If you want to get in touch with Lynne to learn more about her journey and/or to pick her brain, you can contact her here. **
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