Use it to your advantage and watch your profits soar!
This past weekend I was listening to an old Rolling Stones song, Time is on Your Side, and it brought to mind that time is the most precious asset we have and yet too often we waste it or give it away. Given that this is a new year I always like to reflect on the past and make plans for the future. Positive things I can do that will make my life and the lives of those around me a little better. It would be appropriate at this time to have the same type of conversations in accounting firms in addition to the discussions about charge hours, job budgets, realization and efficiency. I thought it might be timely (no pun here) to offer a few ideas and share my thoughts on how you can get more value in exchange for your time during this next year.
1. Take control of your calendar and appointments. Too often appointments are scheduled in such a manner that there is open time between appointments but not enough time to dig into a project. The result, idle unproductive time which usually leads to working later in the evening or on the weekends. To the greatest extent possible try to schedule appointments consecutively. Remember just 20 minutes per person per day billed and collected is over 5% of your annual revenues. These little things have a profound impact on profitability.
2. Block out time to work. How many times have you gotten to the end of the day and said “What happened today, I didn't get one thing done that I planned to do”? You can avoid much of this frustration by blocking out undisturbed time to work. Consider it an appointment with yourself. If you don’t value your time others will certainly not value your time. If someone interrupts you, ask them if you could schedule a time to meet with them later because you don’t have time right now. If anyone approaches you with a client question, ask for the client number and tell them you are going to charge your time. Soon you will have fewer interruptions. Believe me, this works!
3. Conduct better meetings. Here are a few tips to make your meetings more productive.
a. Have an agenda. It doesn’t have to be fancy. Include length of the meeting, the objective for the meeting and the decisions that will be made.
b. Don’t use meetings to push out information. Distribute the information before the meeting and then use the meeting to answer questions and make clarifications.
c. Don’t allow others to automatically schedule meetings on your calendar. Remember you control your calendar.
d. Participate in the meetings you attend otherwise why are you there?
e. Cancel nonproductive meetings. You know which ones are nonproductive.
4. Limit your time dealing with email. Email is one of the greatest time wasters in business today and according to a recent article 80% to 97% of email traffic is junk. Turn off the dinger so it doesn’t distract you from your work. The vast percentage of email doesn’t have to be answered immediately. Also create folders with rules for important projects to get your emails to the right place. Use email as the wonderful tool it is rather than letting it be a diversion that wastes your time.
5. Write time sensitive bilateral engagement letters. Include important matters:
a. Date or period of time the work will be performed
b. Date by which you must receive required client information
c. Mutual responsibilities to include required documentation
d. Dates for expected payments (Limit the extension of credit and get paid earlier, a retainer if possible)
e. Premium rates for work that is late, incomplete or difficult personally. If you would like to see a few ideas for sample wording send an email to email@example.com with the subject line Fee Enhancement and I will send them to you.
6. Shorten the work process cycle. Over 20 years ago one major CPA firm conducted a study of their practice and found that the longer a job was in the office the less profitable it became. Time is directly related with efficiency and profitability as anyone that has practiced public accounting for any period of time knows. Many practitioners fail to review files timely and thus become a bottleneck in the process while sending the message to their employees that getting work out the door is not a top priority. Work with a sense of urgency and move projects along by saving time every day for review or if you can’t find time get someone else to do the review which is just about always better than letting the project sit on your shelf for weeks. One of the biggest complaints that I hear from managers and staff is that partners wait far too long before reviewing their projects which further contributes to their own inefficiency. Move work through your office faster, competently and efficiently and I guarantee you there will be fewer upset clients and even fewer discussions about your fees.
7. Leverage and then leverage some more. Don’t do lower value work you shouldn’t be doing. If you continue to perform these lower level services you clients will eventually value you less. For the last 15 years or more I have asked accountants about how much of their work could be delegated to a lower level and consistently get back that over 50% could be delegated. As total personnel and benefit costs are now approaching 50% in many firms significant thought needs to be given to find ways that labor costs can be reduced through using processes that allow less experienced personnel to do the work while maintaining high quality. Every person in every firm should be asking themselves continually “Could someone with less experience and less cost be doing this task”? It is only through questioning our current processes that significant improvements can be identified and implemented. If you are complacent you face the risk that some of your clients will make the decision to use another accountant.
Remember just 20 minutes per person per day billed and collected represents 5%+ of your annual revenues. If you are diligent with the use of your time I’ll bet you could easily pick up an hour a day in productivity! Use the time you have on your side for your clients and they will “keep running back” for more of your great client service. Wishing all of you a most productive and fruitful 2010!