As technology commoditizes many of the accounting industry’s primary services, firms face increasing price pressure and competition. New technologies — especially in audit and tax consulting — have automated a growing variety of tasks, reducing the need for highly skilled professionals to provide one-on-one client advice. Understandably, this technology shift has driven price pressure, increasing the need for firms to better understand their own profitability factors.
The dual problem of manual timekeeping
Anyone who’s used a traditional time-entry system understands the impractical nature of contemporaneous time recording in a multitasking, multiproject environment. The best workaround involves making rough notes throughout the day, then updating timesheets as soon as possible — typically at the end of a workday or workweek. But, even then, most diligent timekeepers occasionally neglect to note the details of every task, and none of them can log precise times down to the second. Faced with these issues, timekeepers are inevitably incurring overhead costs as they struggle to reconstruct how their time was spent. Ironically, timekeeping itself becomes hours of unbillable overhead.
Industry-standard timekeeping practices also fail to capture the complete scope of a professional’s work. Most accounting firms ask their people to record time up to a somewhat arbitrary daily limit, typically 8 hours. But most professionals work far more than that — especially when considering time spent on out-of-office tasks: sending emails from the train, working from home, and making calls on the road. Most firms, in fact, report that their actual workday norm approaches 10 hours a day. As a result, an 8-hour timekeeping standard overlooks as much as 20% of a true working day.
Unfortunately, few accounting firms understand the perils of this information gap. By not capturing all time, they are leaving valuable business intelligence — and probably significant revenue — on the table.
The solution: total time capture
A robust automated time-capture system helps professionals bypass traditional, highly inefficient timekeeping practices. With intelligent time management technology, staff benefit from a virtual timekeeping assistant capable of reporting their task history precisely, down to the second, regardless of where or when they were working. The software seamlessly creates an accurate and defensible time record as it tracks work from system to system, client to client, then presents an easy-to-understand report at the end of each workday, available with a single click. The system also offers Active Prompting, providing users with the option of automatic prompts to record time immediately upon completion of a task, to help ensure immediacy and accuracy of time-record narratives.
Many accounting firms discount the need for good timekeeping data and analysis, since typical fixed-fee arrangements don’t, on the surface, demand the level of detail that’s common in other professional-services sectors where time-and-materials engagements are the norm. These firms fail to recognize that accurately tracking client- and task-specific data, even on fixed-fee engagements, is critical to their profitability.
Robust data intelligence allows firms to more accurately forecast the cost and value of future engagements, and potentially renegotiate fees on existing contracts. Accurate, detailed timekeeping data also helps firms better defend their pricing and identify potential misalignments on the true cost of delivering services — critical wisdom in the current climate of growing price pressures.
Firm management also benefits from a more accurate picture of their workforce efficiency.Team managers and firm leaders get a data-driven window into areas where their groups are performing well, as well as those where additional cross-training or professional development may be needed. Time data can also provide early indications of employee burnout, and offer insights into optimal project resourcing.
Want to learn more? Our white paper dives deeper into how leading accounting firms are leveraging total time management for increased revenue realization.
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