How is Firm Owner Compensation Related to Paper Routing Sheets?
Does your firm use paper routing sheets?
If yes, as an owner/ partner of an accounting firm, you would love to know how your own compensation depends on the volume of paper in your firm.
Here are the average annual owner compensation figures as per AICPA’s 2012 PCPS Succession Survey….
Average Annual Owner Compensation
FTE : Full Time EmployeeSource : 2012 PCPS Succession Survey by AICPA
The more the employees, more the owner earns (nothing new here – wealth is created by monetizing collective time and efforts).
What’s Hidden in These Figures?
What’s critical to note is the potential to increase these compensation levels. And this potential is directly proportional to the paper in your office. James Bourke succinctly coined the expression “The Paperless (or Less Paper) Office!” in his article for AICPA. The lesser the paper, more your income as an owner.
How Does Routing Sheet Reduce My Income?
Consider the proverbial “routing sheet”. From client to your front office; to tax preparer to reviewer; to partner to administrator for billing and IT to FTP it to client. If it’s a paper (actually several of them at the same time) that’s moving within your office and across, you are dealing with several “tasks” that sound “necessary” and hence need to be attended to e.g. spend time in finding at what stage a particular client’s tax return is, how many returns are pending, how many returns are pending with a staff members, how many returns I will get to review today and so on. It all needs time and efforts – from everyone in your firm, including the partner who signs these returns.
And all of this time and effort can be “freed” by using a firm-wide, comprehensive “electronic routing sheet”. And since it’s a nice database that enables this electronic routing, it’s easy to generate any number and any type of management reports at the click of a button, whenever you want.
But How Much Money Am I Losing?
Based on information available in the public domain, on an average every person in your firm spends about 1 to 2 hours per working day to just “move” information and handle documents.
Take stock of a tax season.
90 calendar days. About 65 working days. 2 hours per person.
*at average cost of manpower at $ 45 per hour# at higher side e.g. 1-2 FTEs figures stated for 2 FTEs
You can save these (sunk) costs if instead of moving information and handling paper, you use automated and integrated technology solutions.
And that’s not all. There’s more to it.
How Much More Money Can I Earn from These Hours?
Let’s assume, for a moment, that you and your staff actually process more work using these hours saved by electronic routing sheets.
Just replacing one paper i.e. routing sheet with integrated and automated electronic routing sheet means you, your firm and your staff can not only process existing clients’ returns faster (thereby getting in revenue faster) but also be able to handle much more new business.
* at $ 50 a return # at higher side e.g. 1-2 FTEs figure of new earnings stated for 2 FTEs
If you make just $ 50 a return in net earnings, you can reasonably earn $ 6,500 more per staff in tax season alone. Now your sunk costs are not sunk anymore. They will earn you returns! Now you don’t need to lose business because you are too busy.
And, There’s Some More!
Now go beyond the routing sheet. Take a look at all other most commonly used paper. Imagine how much will you earn more, not just in tax season but year round, if you replaced that paper.
Do you know how much money the paper in your office is costing you every year? Sufficient to pay for a luxury cruise holiday, every year, for you and your family?
Pransform provides comprehensive processing services, technology solutions and automation/integration solutions to help you overcome the paper challenges. Get in touch with us now. Click Here.