Last month, a reputed CPA firm celebrated “The End of Billable Hours”, in a widely publicized event.
Value Pricing does not take away the hours of efforts but clients are increasingly unwilling to pay for excessive time taken to accomplish the tasks for completing their work.
You would be surprised to know the cost of these tasks – which are not the real value producing actions but just the supporting steps – necessary but technologically possible to automate – that are needed to produce the client-deliverables. What are these steps that create unbillable hours (but cost you)?……
The functions performed by accounting firms can be broadly divided into three distinct sections:
Procurement > Production > Delivery
Procurement refers to collection of raw data (including documents) from the clients (of CPA firms).
Production refers to the process of converting the raw data into “client deliverables” i.e. reports, tax forms, financial statements, audit findings etc.
Delivery refers to the process of actually “moving” deliverables from firms to clients (and within firm / locations).
Let’s just examine tasks involved in “Delivery”.
The process of Delivery involves several intermediary steps, before a client finally receives the deliverables. Some of the recurring steps in the delivery process are :
Actual production of the deliverable in the form agreed with client.
Creating and maintaining storage structure for deliverables produced, including creating folders, sub-folders, sub-sub-folders (and so on) for storage of deliverables – within specific softwares (such as DMS) and / or other storage mechanisms (typically on server – in shared space)
Saving draft deliverables
Sending drafts to seniors for review and sign-off
Receiving back the approved deliverables
Saving the revised versions
Printing the deliverables for physical delivery
Drafting, printing, signing cover letters
Fax or mail physically
Drafting emails to deliver to client
Finding / searching for correct version of the file for delivery (perhaps the most critical step in the delivery process, especially for larger volume firms)
Exporting from a software onto “desktop”
Copy from server and paste to local for onward attachment
Converting files from one format to another, if need be.
Attaching the file/s to emails
If files are large, moving / uploading files to ftp software
Sending emails with attachments
The process also repeats based on “demand” i.e. when client or superiors call for some specific deliverable
Regenerating the deliverable afresh, if it is difficult to locate the original or if there is a confusion which is the latest version or who has the latest version
Several internal communications, written and verbal, to reach the final delivery stage
In case of SaaS or cloud storage arrangements, actual upload and download of files
In case of SaaS or cloud storage, reconciliation (whether the files got uploaded or not, whether correct version got uploaded or not, whether there is an error log while uploading / downloading or not, etc.)
Backing up stored deliverables periodically into archives
Contacting clients by phone to inform delivery instances
Collecting fax confirmations and filing
Delivering “duplicate” copies on demand, when needed
A-to-Z of these activities are mostly manual, require time and efforts to actually do the work, are repetitive, and must be done.
The client service delivery is thus a time, effort and money-costing endeavor. Several studies and surveys indicate that on an average, each staff, including Partners, spend between 1 to 2 hours a day in performing these activities. It is 15-25% of the productive (and cost incurring) time of the firm. It can amount to $ 140,000 a year for an 8 persons firm !!
Do You Bill These Hours To Your Clients?
If your answer is “no”, you want to explore automating your processes. Technology solutions available in the market now can help you automate and integrate many of these steps, helping you and your staff produce about 15% more billable work. How many Dollars a year that would be at your firm? Wouldn’t you want to earn more net returns per resource deployed at your firm?