how many open jobs do you have right now? why?
by rob nixon
how do you get efficient and take time out of every single client job?
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after many years helping accounting firms to be more efficient, i have observed that there are eight key ways to get super-efficient with any accounting or advisory project. the premise on this list is that you have a good team of people so i am not covering that here.
here is the list of eight:
- client service coordinators
- self-imposed deadlines
- policies and rules
- visual management
- technology
- all information in from clients
- getting rid of bottlenecks
- scheduling of work
let’s look at each one.
client service coordinators
it’s a known fact that accountants spend a big chunk of their day doing administration work as part of every accounting job. depending on the skill level of the team member, the number of hours per person per day varies. often the more skilled and senior the more administration they do. typically the average is 1.5 hours of administration work (associated with the accounting task) per accountant per day.
if you have 10 accountants that’s 75 hours per week and if they work for 48 weeks of the year that’s a whopping 3,600 hours spent per year doing administration work. if you have an average hourly rate (net firm billing rate) of $200 then that’s equivalent to $720,000 of administration time (aka opportunity cost) per year.
if you hired two new people (called a client service coordinator or csc) to look after the 10 accountants and take the administration tasks off them then you’d free up $720,000 of capacity. even if you filled 50 percent of the new capacity you’d still be a mile in front on what you pay the cscs. the strategy is sound and it works. send me an email and i’ll send you a position description.
self-imposed deadlines
it always makes me laugh when i observe people who are about to go on vacation for a few weeks. have you noticed that they are super-efficient in the final weeks leading up to the vacation? their meetings are shorter, they talk faster, they type faster and emails are much shorter and to the point. previously they used to give a long-winded answer and now they simply say “no” and hit send. why? because they had a self-imposed deadline and they didn’t want to go away and still be thinking about work.
the efficiencies are real when you have self-imposed deadlines on accounting work. here are some examples of self-imposed deadlines:
- you could tell the client when you’ll be getting the work back to them – you could even book the presentation meeting.
- you could have a maximum hours budget on every job.
- you could impose a 10-day turnaround time on every job.
- you could create an internal competition on time taken and accuracy.
when you get a culture of self-imposed deadlines you build a culture of efficiency seeking.
policies and rules
what rules or policies have you got regarding your workflow management process? you can have client policies and team policies. for example, every project has a “maximum hours budget” (not a dollar budget as the price has already been set) and that budget is always challenged down. you should always be asking the question, “how can we do this job in half the time?” you could collect some money from clients before proceeding. a rule could be that you don’t start the job before all of the client
you could collect some money from clients before proceeding. a rule could be that you don’t start the job before all of the client information/data has been collected. a policy should be not to go outside of the scope of work – only do what you’re supposed to do and everything else is priced separately. a non-negotiable rule is that every job is priced up front and the client is notified of the scope of work and the price of the project. if you’re going to have rules then make sure you stick to them.
visual management
some accountants like to hide behind screens and spreadsheets all day. have you ever wondered what they actually do all day as they sit there quietly? it’s very easy to hide behind two or three computer screens. it’s not so easy to hide behind a big screen or whiteboard that shows their real-time performance. a visual management system is great for motivation,
a visual management system is great for motivation, accountability and transparency. below is a template of a very good one. the thing i like about this “whiteboard” is that it has three self-imposed deadlines built in: the due date, the maximum hours and the 10-day turnaround commitment.
every day the job is in the shop, a day is added. every day the board is updated with “hours to go” based on the maximum hours budget. you can see which clients/jobs are on schedule and off schedule. the objective of this board is to get the work in and out in 10 days with a credit balance on the hours at the end. once the job is finished, a file note is created of how many hours it took and the margin on the job. that way you can beat it next year!
once you have the screen or whiteboard in place it’s the perfect place to hold the daily standup workflow meeting.
technology
many accounting firms i visit and initially work with are operating with technology from 10+ years ago. they still have servers, paper management systems and single screens and their clients are on multiple versions of accounting software. time to get with the program, folks.
the advent of cloud technology is the most significant efficiency-gaining tool ever created for accounting firms.
no more version control issues, all documents are on the internet, real-time data from clients and supercomputers are doing the processing work. you need to actively and assertively get all of your clients onto a cloud accounting system. you need to convert your practice management system to a cloud system and you need to get rid of the filing cabinets. when you get your clients on a cloud accounting system, you can consolidate their data into software like panalitix and offer valuable business advisory services to them. you and your clients’ data accessed anytime, on any device and from any location. what’s not to like about that?
all information in from clients
i find accountants have a nasty habit of not being very clear on what they want their clients to send in. i also find that clients have a nasty habit of not sending in everything when they are asked. i also find that accountants are not that quick to follow up on the missing information. all this missing information leads to “job pick up put down” and massive inefficiencies.
so fix it. all you need to do is get your new client service coordinator to send a (plain english) questionnaire to the client with enough detail so we can locate what you need. then have the csc call the client to check that they got it, that they understand it and then make them accountable to a date when the client will have it all sent in. give the client the deadline plus a day and then call them to see where it is. if they miss the new deadline then have the csc physically go to their place of work and collect it. do not let accountants rip off an email to the client asking for the information and then waiting. and waiting and waiting and waiting. have the csc manage the process.
getting rid of bottlenecks
when you apply the theory of constraints to a manufacturing line it’ll be the slowest part/section/process/person that holds up the speed of throughput. a manufacturing line exists in an accounting firm and every accounting project. there is a process to follow, there is information to collect and a product needs to be created from the process and the information.
along the way there are bottlenecks that are slowing up progress. there could be a bottleneck with clients, technology, certain team members and even the partners. find out what the bottlenecks are and fix them. they are causing you to be inefficient.
scheduling of work
i visit accounting firms and i see piles and piles of folders and paper. it’s like a visual filing system is going on. there are low-rise piles and high-rise piles. sometimes the piles fall over, they are so high and unstable. sound familiar?
there can only be one logical reason that there are so many jobs in the shop at any one time: there is no scheduling of when it is supposed to come in. clients are just sending in their stuff when it suits them. if i go to a dentist i have to book in, as the dentist can only see one person at a time.
speaking of dentists, i visited an accounting firm once and i asked them how many open jobs they had at that moment in time. tap tap tap into their workflow system and it showed 440 open jobs. they had 20 accountants so that was 22 open jobs per accountant. i was at a dinner party a couple of nights later and i met the dentist. in casual conversation i told the dentist about my visit and 22 open jobs for each accountant. the dentist replied, “that’s like me having three patients in three separate chairs at any one time. i’d make mistakes. no wonder they’re inefficient.”
schedule the known work (when you’re doing it and when you need it) at least six months in advance and make sure each accountant has no more than three open jobs at any one time.
the pursuit of efficiency is what you must do to thrive in this profession. you’ll need to stop driving billable hours and if you price every job up front, refill the newfound capacity with business advisory services so you’ll make a lot of money and you’ll have very happy clients.