providing superior client service eliminates the perception of audit as a commodity.
by alan anderson, cpa
transforming audit for the future
most firms have abysmal project management, which makes it nearly impossible to see if there’s any room to take on extra work. plus, piling all the work into busy season means your people already work far beyond 40 hours a week. and, if you’re relying on timesheets as a measure of capacity, you may not be capturing the time your staff eats because the work is taking more than 40 or even 60 hours in a week to complete.
more: don’t take on audits in an industry you don’t understand | four questions to make your firm more successful as a business | say adios to audit fee pressure | deliver more audit value by getting out of the conference room | six essential elements in audit planning | before the audit: more than just planning | five crucial attributes for successful audit leadership | put the ethics code to work for your clients and your firm | is audit in crisis because of definitions?
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during the 2020-21 covid-19 pandemic, some audit firms had to lay people off, or reduce work hours as projects got canceled or curtailed. but the long-term trend for years has been a shortfall in talent that will only get worse. burnout from overwork is the number one cause of employee turnover.
the traditional org chart at an auditing firm is shaped like a pyramid, with a wide bottom layer of brand-new staff accountants. we spend a lot of time and effort teaching those new people how to tick and tie, how to trace an amount from your spreadsheet to an invoice, and how to perform rudimentary audit steps. we’re not really teaching them to audit or how those tasks fit into the big picture of an audit. consequently, many of those new people quit before they make it to the next level, where they actually learn how to audit. that high turnover at the base of the pyramid reduces the number of people who make it to mid-level manager positions, which are frequently the hardest to fill. the remaining managers may already be stretched thin, so you need to consider their workload before you agree to another project.
providing superior client service eliminates the perception of audit as a commodity. but if your people are overworked, they simply won’t have the bandwidth to give white glove treatment to your best clients, let alone the rest – who also deserve that extra care. committing to superior service and consistent value to your clients will require your people to work at a higher intellectual level. this makes audit more interesting, but capacity will become an even more important consideration. working long hours isn’t compatible with that kind of mental effort. it’s nearly impossible to provide consistent value to your clients when your team is exhausted.
you can often leverage technology to compensate for fewer people. in the not-too-distant future, audits will rely more on technology to do the mindless and repetitive work, so you’ll need fewer people doing those entry-level tasks. to solve capacity issues, you need to also think about your team as more than just a group of warm bodies who are capable of doing the work. the combination of attrition and a tight labor market means you must be strategic about who you hire and the skills you teach them.
do you really need a degreed accountant with a cpa to perform this work? now, we all came up through the ranks, spending time doing repetitive and tedious work. but that doesn’t mean that’s the best way or the only way to teach someone to audit.
some firms have been successfully applying a specialist or service center model combined with technology. these service centers specialize in an audit area and are not necessarily assigned to a particular client but to a component of a firm’s workflow. for example, these firms put together a group whose dedicated job is to audit cash. they do that for all the audits a firm takes on.
the specialization works well for tasks that require ticking and tying, which is how most of us auditors cut our teeth when we were first hired. the last thing a staff accountant wants to do is repeat that easy section next year. that means you’re constantly retraining because you always move people up the ladder. but with a service center approach, you can build a dedicated team that excels at one task, so you’re not constantly retraining a new crop of staff accountants, most of whom will be gone in a few years.
this changes the business model because you don’t need as many degreed accountants. you can hire people who enjoy repetitive tasks and who get really good at it. these might be people who were ap or ar clerks in the industry. or maybe someone just out of high school who’s also getting an accounting degree. other good candidates might be bookkeepers or degreed accountants who want a less demanding job limited to 40 hours a week.
maybe you don’t need to add actual headcount to the firm, but you can hire gig workers or temp workers who can help out. despite the reputation of gig workers as 20-something slackers living in their parents’ basements, many of these people are actually baby boomers in their 50s and 60s. these are people who aren’t quite ready to quit working yet but who have a lifetime of experience to bring to the table.