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The resources focuses on specific topics relating to the
accounting and bookkeeping industry. Take advantage
of the information and tools in these resources.
Chapters
1. DEALING WITH CLIENTS
2. SALES & SERVICES
3. PRACTICE MANAGEMENT
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4. CLOUD COMPUTING
5. OPERATIONAL EFFICIENCY
6. STAFFING ALTERNATIVES
7. NETWORKING
3.1. Five Key Issues Consuming
Your Billable Time
In my experience working with Accounting Professionals, I often hear
about the challenges within their own businesses. It seems that we are
collectively very good at solving problems for our clients, but we are all too
often content to build a make-shift spreadsheet and “make do” when it
comes to our own internal problems.
As a collective, we tend to face problems in the following areas:
• Tracking deadlines and managing staff workloads
• Staffing
• Billing and realization
• Cash flow timing
• Managing workflow
Unforunately, software cannot manage the human aspect of staffing issues. However,
Clear Biz can defintely help you manage the work within your firm. Better management
of work generally leads to more control over your cash flow.
You may call them different things but at the heart of it, the following are 5 key issues that
impact the vitality of our accounting business and have the potential to drain your productivity.
5 Key Issues Affecting Accounting Business and
Your Productivity
1. Monitoring Deadlines Internally
2. Reminding Clients about Upcoming Deadlines
3. Tracking Client Information
4. Managing Workload
5. Tracking Time and Manging Your Receivables
We will discuss each of these in detail, as they really are at the heart of workflow issues
within a firm. Billing and collection issues usually stem from workflow challenges, as clients
are far less willing to pay an invoice on time (or at all) if their work is seen as not being a
priority or if you consistently miss deadlines.
I have rarely seen true collection issues, most of the disputes center around the client’s
perception of your value as opposed to truly being unable to pay an invoice.
If you use one or more Excel spreadsheets to track your work flow, please read on to see
how you consolidate the information into Clear Biz and take your practice to the next level.
1. MONITORING DEADLINES INTERNALLY
I have seen many variations of spreadsheets that were built in order to monitor deadlines.
Usually, an accounting firm will have a separate spreadsheet for corporate clients, personal
tax clients, and then for preparation of the various T-slips. The spreadsheet method works
very well if you have a small practice and only have a few people updating the spreadsheet.
As you grow, you will quickly learn that spreadsheets have an inherent flaw, they only work
if we update them. In my experience, spreadsheet updates fall through the cracks when we
are at our busiest. Unfortunately, this is also the time when we need them to be at their
most functional.
The need to monitor and track deadlines grows exponentially as your practice grows. As
you add people, you also add another layer of complexity to the deadline mix, which is staff
scheduling and managing workloads.
In a single person firm, you can decide that you will work forty hours in a given week. Based
on that decision, you have a finite capacity to do work. The good news is that you would
likely have a small workload and would easily be able to prioritize.
With the addition of staff, you need to be aware of the number of hours that each staff
member is willing to work, who is working on which days, and you also have to be aware of
the skill levels of each staff member. One hour of a designated person’s time cannot be
replaced straight across for one hour of an administrative person’s time.
Scheduling and deadlines can be challenging enough if all staff are fully utilized and are all at
work as anticipated. The real challenge is to deal with unexpected absences and down time.
I often see some combination of calendar application and spreadsheet being used to attempt
to manage the above. This type of system can work, but it relies heavily on staff diligently
maintaining their workload inventory and updating the spreadsheet/calendar solution regularly.
The risk in all of this, as we all know, is that a critical deadline will be missed. In the end, how
much does a missed deadline or late fee cost the firm? Is the cost just measured in dollars?
Usually not, there always some cost to our relationship with the particular client.
My view is that the client feels unimportant – would we miss a deadline for an important
client? This puts them at risk for leaving us. If this happens enough, we really have to fight
for credibility.
There is a simple solution to this challenge. Clear Biz populates your database with all of the
federal and state deadlines, making it very easy to track them. We all have some type
of custom deadline to monitor, Clear Biz can do that as well within the same module.
2. REMINDING CLIENTS ABOUT UPCOMING DEADLINES
Even firms that are able to monitor internal deadlines seem to struggle with reminding
clients about upcoming deadlines. The reality is that the vast majority of firms that I deal with
operate under the model where clients bring in work when they bring it in. Work is completed
on a first-in, first-out basis, regardless of actual deadlines in most cases.
This responsive strategy is flawed for many reasons:
• It is difficult to predict workload
• It is difficult to schedule staff variations and other time off
• We place control of our firm in the clients' hands
• Clients do not feel that we care about their work and may go elsewhere
• Clients may forget deadlines and then face late fees
• We look unprofessional if we are constantly fighting fires
If nothing else, being proactive gives you more control over the work that you have and
makes it easier to track the work that is coming in or is due in. If you ever intend to sell your
firm, a buyer will pay more for a firm that has been proactive with their clients than one
that neglects them.
The most common reason that I hear for not being proactive is that the accountant is too
busy to chase work. The second most common reason is that we just don’t have the
systems or resources to help us with this.
I have worked in and with a few firms that decided to be proactive, but most regretted it at
least once a month. For the most part, the process was onerous. Staff would have to
dedicate time to reviewing client files to see who had upcoming year-ends, then the details
were manually entered into a letter to be sent to the client. Each letter was then printed
and mailed to the client.
The next step was to wait and see which letters were returned as undeliverable – often the
first sign that we have lost a client! Sadly, a few of these firms went back to a reactive
approach because they found it more work to be proactive than not.
Proactively managing upcoming deadlines allows us to take control of our practices and
to ensure that clients are reminded of deadlines in a timely fashion. Being in control of this
will relieve a lot of stress at all levels in the firm.
Clients also appreciate the professionalism inherent in being aware of the workload. Lastly,
staff will recognize that the firm is proactive and will feel lower stress levels – resulting in
less turnover and absenteeism.
The real challenge is to find a system that works simply and easily. Clear Biz has built
in functionality that can automatically send notifications to your, reminding them of all of
their upcoming deadlines. The system does the vast majority of the work, making this
something that can be easily implemented and it will save you a lot of time as you work
towards being proactive.
3. TRACKING CLIENT INFORMATION
In a perfect world, clients would deliver complete files, we would process them at one sitting,
and we could then move on to the next task. Efficiency experts have studied the phenomenon
of rework and have concluded, not surprisingly, that rework lowers overall profitability.
I will state the obvious. If you have a fee sensitive client, your profit diminishes every time
you pick up a file and have to put it down again. Every time we change our focus, we have to
spend time getting back to our original thought process on a given file.
With knowledge workers, it generally takes us up to twenty minutes to regain our focus on a
task once we have been interrupted. Thus, we can finish a file much quicker if we do it all at
once, rather than by doing the work in split sessions. If you don’t believe me that this is true,
start a file before lunch and time yourself to see how long it takes to regain your focus in
the file after lunch. There is a reason that we avoid starting new projects near the end of the
day, especially on a Friday!
Ideally, a staff member will review the client information when it is received in order to ensure
that the obvious omissions are requested (for example, a missing bank statement). Typically,
the person working on a file will make a list of missing items and contact the client.
Organized staff will make notes in the file, just in case the client calls to follow up and the
staff member is otherwise engaged. Less organized staff will use Post-It notes that may or
may not stay with the correct file over time. In the latter case, it is highly inefficient if the
client has questions about their file and staff cannot locate notes.
It may seem like a small issue, but imagine the impact as you add staff and clients. Over
time, you can spend a lot of time trying to figure out which files are ready to complete and
which require information.
A good system for tracking client information should mean that anyone answering the phone
is able to quickly identify missing information and update the client. This is highly efficient as
you don’t have to find the physical file in order to help the client. Clear Biz has a system
which allows you to record which paperwork clients have brought in and also to track the
status of missing documents and questions. The information is accessible to all staff, so
any staff person can update the status.
4. MANAGING WORKLOAD
You will have a very hard time managing your firm’s workload if you are having issues
monitoring deadlines internally, reminding clients about upcoming deadlines, or tracking
client information. Plain and simple, problems in one area will spill over into the others.
Managing your workload involves knowing what work is to be done, who is available to do
the work, and what level of priority the work should be given. First-in, first-out is a very
simple solution, but it does not address the need to meet deadlines. Also, the order breaks
down the minute a file is missing information – does it go to the very back of the line or just
on hold until the information comes in?
I once worked with a firm that had an employee who worked non-stop. He was a GST
specialist and everyone avoided his desk due to the piles of incomplete files around it. A
simple misstep could cause an avalanche of paper. Unfortunately, he became ill for an
extended time period and we had to go through his files to find out what had to be done and
when. It was a bit like an archaeological dig, we found all kinds of treasures buried in his
“system”. We realized that he was so over-whelmed, he just kept piling work on top of work.
The new work this week would be the bottom of a pile by next week. Needless to say, we
had a lot of fires to fight and a lot of angry clients.
A good workload management system would have flagged the fact that this individual was
missing deadlines and was working overtime far in excess of any of his co-workers. In this
particular case, the firm ascribed to the “pile it so you can see it” mentality and “out of sight,
out of mind” was the standard operating philosophy. Not surprisingly, they had a lot of staff
turnover and a lot of client turnover.
Proactively managing workload means that staffing levels can be adjusted as appropriate
and ensures that deadlines are met. This reduces the risk that your key employees will
suffer from being over worked and burn out.
Clear Biz allows you to view all of your client’s tasks at a glance by using the calendar and
list views. There is functionality to prioritize tasks and review staffing levels. This is a very
simple way to solve a significant problem area for most firms.
5. TRACKING TIME AND MANAGING YOUR RECEIVABLES
Time tracking and receivables are the final issues to be addressed. Time tracking is an
area that many firms struggle with. If you are in a professional services firm that bills hourly,
you need a system to track time. This system has to be reliable, accessible, and easy for
staff to use.
The most important feature is that it cannot take a lot of time to track time, as this will really
frustrate your staff. Frustrated staff will start to take shortcuts and you will ultimately be
missing out on billable time.
In the early days of my career, we had manual time sheets that had to be filled out. The
time-sheets had to be added and cross-added on a weekly basis. In tax season, it would
not be uncommon to have six pages for a single time sheet. The administrative staff would
then take the data and key it into our time and billing system. If they could not read the staff
person’s writing, the time would not be entered until such time as the staff person was
available to interpret their handwriting. We often had staff out on assignment for weeks at
a time, so this meant that the firm would either have to delay the monthly billing cycle or
risk missing time.
I raise this example to demonstrate the obvious inefficiencies of doing things by hand.
However, it is not uncommon to see firms entering data in multiple systems. I once worked
in a firm that required us to enter our time sheets on two platforms. To this day, I have no
idea what the redundant platform actually did. The point is that we dreaded time sheets
and put them off as long as possible.
Delayed time entry can cost the firm a lot of money. The first issue is that staff may forget
which files they worked on, losing the time permanently. Time is usually recorded in some
“admin” category and ignored.
The second issue is that billing may be late or incorrect if time is not entered on a regular
basis. The latter issue can significantly impact your accounts receivables. The longer it takes
to bill a file, the longer it takes for you to recover the wages that went into the file. This may
seem insignificant, but it can be a large number if you have enough staff.
I actually worked with one firm that had a spreadsheet to track the files that could be
completed before cut-off. Staff were required to work overtime to ensure that the larger files
were completed before month-end in order to avoid having to wait another month to bill.
It is not uncommon for firms to enter track their time and billing in one application and then
enter the same information into their accounting system. This is highly inefficient and can
be error prone.
Clear Biz has a full system for tracking time and managing accounts receivable. You can
track your account balances as well as productivity levels for your clients, staff, and projects.
CONCLUSION
We have discussed how the following issues can consume your billable time & profitability:
1. Monitoring deadlines internally
2. Reminding clients about upcoming deadlines
3. Tracking client information
4. Managing workload
5. Tracking time and managing your receivables
If you can effectively solve these key issues, you will see immediate gains in productivity and
profitability. Implementing Clear Biz can save you time and money, as well as help you
grow your business.
Jeff Borschowa
Published author, educator and curator of all things related to accounting
efficiency and technology. I first joined the accounting world in 1991 and
has spent the bulk of my career working with and advising small to
medium-sized enterprises. www.dreampractice.ca
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