20-20 Accounting Solutions increases revenue per client by 49%
20-20 Accounting Solutions boosted its revenue and drastically reduced AR by adopting fixed fee billing, standardizing its processes, and improving the front-end client experience.
20-20 Accounting Solutions’ 7-step playbook for business success
Discover how to run the smartest business.
20-20 Accounting Solutions’ 7-step playbook for business success
“What I love about Ignition is that it allows us to standardize all the systems around the entire client lifecycle. It also helped a lot with scope creep, especially with features like Instant Bill.”
Dustin McNutt, Partner at 20-20 Accounting Solutions
The challenge: Experiencing growing pains due to inefficiencies and AR
Meet 20-20 Accounting Solutions, a CPA and advisory firm that provides accounting, financial planning, and business consulting to physicians offices, specialty pharmacies, and other small businesses.
20-20 Accounting Solutions was doing well and had a rapidly growing customer base. That said, while the firm was scaling and thriving, its expansion also brought some growing pains.
Dustin McNutt, a Partner at the firm, shares that as the company scaled up, the cracks in its existing procedures became more apparent.
"We had systems in place for proposals, billing, and collecting. But as we grew, those systems were stressed to the point where we needed to find another solution," he says.
Some of those challenges manifested in struggles like inconsistent client experiences, scope creep, and AR.
Lack of standardization with proposals and engagement letters
One issue was the company's need for more standardization with proposals and engagement letters.
"It was a lot of reinventing the wheel with each client," says Dustin. "Each of our proposals looked drastically different from the other—and that was if we had them in writing. A lot of our deals were verbal, which led to miscommunication."
Because of this lack of standardization, clients often received different information and varying terms, creating inefficiencies and misunderstandings.
Dealing with scope creep
The lack of clear proposals and engagement letters also meant the firm was prone to scope creep and unpaid work. Without a process for dealing with scope creep, the team often found themselves providing services for which they weren't compensated.
While noble, the firm's culture of "the client is king" led to unbilled hours and work outside of agreed-upon terms, ultimately affecting profitability.
High levels of AR
Before implementing fixed-fee billing via Ignition, 20-20 Accounting Solutions had significant outstanding receivables. The firm collected funds after job completion, often resulting in delayed payments and unpredictable cash flow.
"Our AR would sometimes climb and climb to astronomical levels. I remember there was a time we were owed around $88,000," Dustin recalls.
Because of this, managing cash flow was a challenge, and the team had to chase down clients for payments, taking valuable time away from other priorities.
Inefficient billing and reconciliation
While the company had some form of automatic billing via QuickBooks, there was still friction throughout the process because clients had to initiate the payment.
In other words, QuickBooks allowed the firm to send bills automatically, but collecting those funds was a manual process. Not to mention, it was cumbersome to manage individual recurring transactions at scale.
20-20 Accounting Solutions’ 7-step playbook for business success
Discover how to run the smartest business.
20-20 Accounting Solutions’ 7-step playbook for business success
The solution: revamping the firm's client engagement and billing processes
Because of these challenges, Dustin and the 20-20 Accounting team knew a change was necessary. So, they adopted Ignition and transformed their approach to client engagements, billing, and renewals.
Introducing standardization to client engagements
Ignition allowed 20-20 Accounting Solutions to roll out more efficient proposals and engagement letters. Rather than reinventing the wheel whenever the firm brought on a new client, the team leveraged Ignition to create customizable, standardized templates.
Doing so helped the firm unlock massive time savings. According to Dustin, the process for creating proposals went from being 4 hours long to just 30 minutes—translating to an 88% reduction in time spent drafting proposals.
A better front-end client experience
Another critical benefit of Ignition? It helped the company create a more professional and consistent client experience. Ignition's customizable templates enhanced the firm's branding and communications, making it easier for clients to understand the services offered. That and a standardized process meant clients had a better experience.
"Ignition helped us land more deals and present ourselves better on the front end," says Dustin.
Efficiently charging for out-of-scope work
With Ignition, not getting paid for scope creep has become a non-issue. The firm now has solid engagement letters to outline project boundaries. And if scope creep does arise, the team is equipped to address it proactively.
They could charge for scope changes as they happen, using Ignition's service edit or Instant Bill capabilities. Not only does this ensure immediate payment for additional work, it also saves the team time.
"At a minimum, we save 8 to 10 hours a month sending bills and chasing people for money. That doesn't even include the time we save doing the proposals," he says.
Moving to fixed fee billing
The firm also enhanced cash flow and financial predictability by implementing fixed-fee billing and automated payments, with clients charged upfront.
"When the price is fixed upfront, you don't have to wait until the back end of the engagement to know what the price will be, and you can go ahead and bill it. This drastically increased our cash flow and alleviated the stress that comes from clients dragging their feet when paying their bills."
Moving to a recurring, fixed-fee model also eliminated AR for the firm, providing a more consistent revenue stream and reducing the need for follow-ups on unpaid invoices.
In line with this, 20-20 Accounting Solutions streamlined their renewal process. Previously, they might have gone years without updating a client's engagement letter, resulting in outdated terms and pricing.
Now, a team member reviews all upcoming contract expirations, monthly. The firm proactively renews each engagement through Ignition while ensuring the updated documents reflect current services, pricing, and scope adjustments.
The transition to fixed-fee billing, along with other changes on the front- and back-end client experience, vastly improved overall business performance and resulted in a 49% increase in average revenue per client.