Running a bookkeeping practice is rewarding, but keeping it profitable? That can be a real challenge. Between client work, admin, and trying to grow the business, there’s barely any time left to think about your bottom line.

But improving your firm’s profitability doesn’t need to mean overhauling everything. With a few smart tweaks, you can make a big difference. In this blog, we’ll walk through the common pitfalls that drain profits and share practical ideas to help you run a more profitable, sustainable business.

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Why it’s so hard to increase profitability

Running a profitable bookkeeping practice isn’t just about working hard, it’s about working smart. Yet, many firm owners find themselves stuck in patterns that make it difficult to achieve the profitability they are aiming for. Here are some of the usual suspects:

Pricing too low 

Undercharging is one of the most common issues we see. Maybe you’re worried that raising prices will scare clients off? Or maybe you’ve just always priced this way? But if your prices don’t reflect the value you bring – saving time, reducing stress, helping clients make better decisions etc – you’re leaving money on the table.

Undervaluing your services impacts revenue and sends the wrong message about the quality and expertise you offer. If this sounds familiar, you should read: When value-based pricing works (and doesn’t work) for an accountancy firm

Time spent on tasks that don’t make money

A major drain on profitability is time spent on non-billable tasks. Chasing payments, onboarding clients, replying to emails – necessary, yes, but none of these bring in revenue. The more time you spend on admin, the less time you’ve got for high-value work that grows your firm.

Client expectations and scope creep

This is a silent profit killer. You say yes to just one extra report or last-minute request, and before you know it, a project expands beyond the agreed terms and you’re doing hours of extra work for free. Clear boundaries and strong engagement letters help here, as does learning how to say no (nicely).

Need help with this? Here’s A 5-step guide to saying no to clients (without making them angry!)

No room to scale

Many bookkeeping firms rely heavily on billable hours as their main source of income. However, if you’re billing by the hour, there’s a cap on how much you can earn as there are only so many hours in a day! To grow profitably, you need to think about how to serve more clients without simply working more.

Scaling requires breaking out of this cycle by exploring ways to increase efficiency, expand services, or adopt new revenue streams that do not depend on trading time for money.

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12 ways to improve profitability

Improving your firm’s profitability doesn’t mean reinventing the wheel. Instead, making small, practical changes can have a big impact. Here are 12 actionable strategies to help you achieve this:

1. Adjust your pricing

One of the quickest ways to start improving your firm’s profitability is to reassess your pricing approach. For example, moving to fixed or value-based pricing – which reflects the benefits clients receive rather than the time spent – can significantly increase revenue. Sounds good doesn’t it?

If you want to earn more and position yourself as a trusted advisor rather than just a service provider, begin by identifying the unique value you bring to your clients. Do you save them time, provide peace of mind, or offer insights that help them make better financial decisions? Or all of the above? Then start communicating this clearly in proposals or discussions with clients. 

Useful resources:

• Your price increase letter to clients: 8 essentials that you need to include
• Calculating client value: how to find the value in your current client base

2. Use tech to save time

Efficiency plays a key role in improving your firm’s profitability, so look at where automation and software can reduce time spent on routine tasks, freeing you up for higher-value activities. Tools like Xero, QuickBooks, Hubdoc and Karbon can help you automate repetitive tasks. And what does less time on manual work mean? More time to spend with clients or to focus on growth – both of which directly impact your bottom line. 

3. Pick a niche or specialisation

Specialising in a specific industry or type of client not only helps differentiate your practice but also justifies you charging higher fees. Why? Because when you focus on a niche, you build a deep knowledge and credibility in this area, which clients are often willing to pay more for.

Consider targeting industries you enjoy working with or have experience in. For instance, specialising in bookkeeping for hospitality businesses or e-commerce stores can attract loyal, long-term clients.

4. Delegate and outsource effectively

Delegation is a key strategy for improving your firm’s profitability. Not only that, but it’s a good reminder that you don’t have to do it all. Outsource repetitive tasks, such as data entry, payroll or even marketing to others, so you can focus on the parts of the business only you can do. The parts that will actually grow your practice.

By freeing up your time, you can focus on the higher-value tasks such as client relationships and strategic planning. (Read: Learn to delegate authority not tasks)

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5. Focus on keeping clients, not just finding them

It costs less to keep a client than to find a new one, so focus on retaining your clients as much as possible. This can be as simple as staying in touch regularly, delivering excellent service, offering proactive financial advice, and looking for ways to offer more value.

Bundling services is another way to increase client loyalty (and average fees). For example, combining bookkeeping with financial forecasting provides added value and creates stable income streams for your practice.

6. Keep an eye on your numbers

If you don’t track your firm’s key performance indicators (KPIs), it’s hard to know what’s working and what’s not. And as you can imagine, this makes improving your firm’s profitability impossible.

Don’t know where to start? Watch things like revenue per client, gross profit margin, and client churn. Even a simple spreadsheet can do the job! Tracking and regularly reviewing these will help you identify what’s working and where improvements are needed, and it will allow you to make informed decisions daily.

7. Invest in your personal growth: hire a coach

Sometimes, achieving profitability requires an outside perspective. And sometimes, you just need a sounding board. Whichever it is, a coach can help you identify blind spots, build a plan to scale your practice profitably, and hold you accountable. 

The Accountants’ Growth Club specialises in helping bookkeeping and accounting firm owners like you. Their practical, hands-on advice and actionable insights can play a key role in improving your firm’s profitability while helping you build a business aligned with your goals.

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8. Proactively keep the pipeline flowing

Many bookkeeping firms focus heavily on serving their existing clients, but this can limit long-term growth. Instead, they should be making client acquisition an ongoing task by:

• Setting aside specific days or hours each week for marketing and outreach, or;
• Outsourcing tasks like content creation, social media management, or email marketing to a specialist. 

Don’t wait until you lose a client to start looking for the next one! Make time each week to work on your marketing or delegate it to someone else. A steady flow of leads means less stress and more stability.

9. Cross-sell additional services

Your existing clients can also be a source of growth if you offer additional services that meet their evolving needs. For example, if you already handle a client’s monthly bookkeeping, consider offering services like cash flow forecasting, financial planning, or even VAT compliance reviews.

Cross-selling not only increases revenue but also strengthens client relationships. Your clients already trust you, but if they rely on you for multiple services, they are less likely to leave and more likely to recommend you to others.

10. Cut the faff

Efficiency is one of the most effective ways to increase profitability, so if something takes too long or requires too many steps, fix it. Streamline your systems, automate where you can, and don’t be afraid to ditch clunky tools that slow you down. 

For example, using tools like cloud-based accounting software can save hours on tasks like reconciliation and invoicing. This allows your team to focus on higher-value work while maintaining or even reducing staffing costs. (Read: 6 Things You Must Consider BEFORE Deciding on What Practice Management Software to Invest In)

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11. Keep your best people

Profitability isn’t just about clients; it’s also about your team. Why? Because hiring is expensive, and losing a great team member costs even more! To limit staff turnover (and therefore, disrupted workflows, dissatisfied clients, and hiring expenses):

• Look after your team and offer them growth opportunities.
• Show them that you value them.
• Invest in their development and give them room to grow.
• Build a culture they want to be part of.

 A team that feels valued will stay longer, work more effectively, and provide better service to your clients.

12. Offer scalable services

Traditional bookkeeping tasks like payroll or monthly write-ups are often labour-intensive and limit your capacity for growth. So what can you offer instead? Services like Virtual FD/CFO support or fixed-fee packages let you grow without burning out. They don’t rely on hours worked, which means more clients, more income, and more breathing room.

Scalable services like this not only improve efficiency but also position your firm as a strategic partner rather than just a transactional service provider. And that is the key to improving your bottom line.

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Long-term benefits of improving your firm’s profitability

Improving your firm’s profitability is about more than just increasing revenue. It can transform your practice into a business that runs smoothly, grows steadily, and attracts the right clients and team members. The benefits go far beyond the financial, creating positive changes in how you work and plan for the future.

Reduced stress and workload

With better profitability, you don’t need to stretch yourself thin by taking on too many clients or tasks just to make ends meet. Higher-paying clients and more efficient systems mean you can work smarter and find more time for planning, personal growth, or simply enjoying life outside of work.

The ability to reinvest profits into growth

Improving your firm’s profitability gives you the breathing space to invest back into your practice. Whether that means upgrading tools, hiring additional staff, or refining your marketing, these steps help you grow in a way that is both sustainable and focused. More resources allow you to take on bigger opportunities without sacrificing service quality.

Building a business that attracts high-quality clients and staff

When your business is profitable, it becomes more attractive to both clients and employees. High-value clients are drawn to firms that deliver expertise and stability, while talented staff want to work somewhere that values their contributions and offers opportunities to develop. By improving your firm’s profitability, you’re shaping a business that can stand out and thrive in a competitive market.

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Build a business that gives back

Improving your firm’s profitability doesn’t happen overnight, but with the right strategies, it’s entirely achievable. By rethinking your pricing, streamlining operations, nurturing client relationships, and investing in your team, you can create a business that is both profitable and sustainable.

Taking proactive steps now will not only strengthen your bottom line but also give you more time and energy to focus on the areas of your practice that truly matter.

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Want to take your bookkeeping practice to the next level?

You don’t have to figure it all out alone. Whether you need a pricing review, a better growth plan, or just someone to hold you accountable, we can help. The Accountants’ Growth Club supports firm owners like you to grow their businesses profitably – without burning out.