The accounting profession has gone through a huge transformation over the last decade. Technology advancements, cloud computing, a globalized economy, increased automation of compliance, the introduction of a unique generation to the workforce, and new expectations from clients have reshaped accounting, completely changing the way you work.
So why are you trying to run a successful accounting practice using a business model designed before this evolution?
Dozens of processes are carried out in your firm each day. Your team goes through similar steps to prepare a statement, onboard a new client or complete a tax return. These steps determine how the information flows and who handles what.
If your firm were a machine, it would be your processes that determine how the cogs and gears interact, how quickly parts get put together, how much is spent, and whether there will be a defect in the product at the end of the conveyor belt.
Thanks to technology, few products get manufactured today in the same way as ten years ago, and in accounting, technology has been just as revolutionary. So have you assessed the way you manufacture your firm’s products?
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It’s easy to take for granted that some tasks you can now perform in minutes once took hours or days to complete. Because these ongoing improvements have happened, processes in most firms have adjusted organically over time. The steps, speed, and staff involved have all been altered, but often without much deliberate consideration or planning.
When looking at the journey to the cloud of accounting firms, one of the most incredible findings is that practices are implementing software-as-a-service systems without rethinking the processes that these systems are part of. Therefore, not only are they not maximizing the gains of the cloud, but likely causing tension in areas that should be running smoothly.
Over the years we've always documented our processes, but using old-school paper files or locally installed software essentially rendered the information unusable. By transitioning our processes into accessible and repeatable checklists, in our case with Karbon, we created indispensable tools that are now the backbone of how we do our work.
Analyze & refine
Think about the core processes that need to be improved—whether it’s to perform them more quickly, execute several at once, or to improve their quality—and ask what core changes need to happen if you’re seriously going to double your profit. As a Partner, you may be removed from some processes. If any have been delegated to other team members, involve them in this step, or better still, empower them to lead it. Your goal is to make sure each aspect of every operation is well-planned and performing as well as it could.
You want no wastage in time, people-power or cost. Performing a full 360 analysis of every process will give attention to each piece of the puzzle and help you discover the specific areas that need improving.
In order to identify bottlenecks and opportunities, for each process determine:
- The number of steps
- The time each step takes
- The most problematic steps
- The most time-consuming steps
- The business functions and personnel involved
- The impact of each step on the overall cost, quality and time
This analysis will help you identify specific pain points that need solving and areas you should concentrate on improving first. You might discover only one part-time staff member knows how to complete a certain report. Or that time is wasted onboarding a client because of too much back and forth emailing. Would replacing all this with a 30-minute video call be a more efficient and personal way to kick off the relationship?
Some other issues may not require any digging at all, and are procedures you’re fully aware haven’t been updated in years. Are you still requiring staff to print email or documents to keep a physical record? Are you still putting off the transition to the cloud? There is no excuse for your firm to be employing processes intended for a vastly different accounting business, so take this opportunity to rework everything. Find where you can eliminate roadblocks, reduce bottlenecks, and speed things up.
For each newly refined process, aim to standardize, document and educate.
- Have templates for all your compliance work so execution can be standardized across your practice.
- Document each process so it can be replicated.
- Educate your team so they all execute correctly.
The technology is getting better, and in another couple of years, some parts of compliance should be relatively automated. We need to review our processes so that we can focus on other value-added services that we provide to clients.
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As well as focusing on the time that you can gain back from larger jobs, review where all time is spent by the entire team. Focus on cutting down the smaller administrative tasks that are taking up time, such as the hours spent responding to emails or too many internal meetings.
Finding a way to give even 15 minutes back to each team member, each day, will add up rapidly. A 10 person firm will gain an extra 12.5 hours a week, or more than 550 hours a year. Consider what else your team could deliver with this newly-found time.
This article is an excerpt from The Growth Playbook. You can download the complete playbook for free here, which includes worksheets, activities and outlines all that you need to consider to increase your profit and build a sustainable firm.