We recently heard proponents of value pricing tell accounting firms to “throw out the timesheets,” and were a little taken aback. While we’re big fans of value pricing and fixed fee billing, we feel that there are plenty of reasons to hang on to the timesheet – or it’s more modern equivalent.
Is My Firm Profitable?
As accountants we would never tell a client that they should stop keeping track of costs and just worry about income, so why would we want to run our firm that way? Tracking time spent on client jobs not only allows you to gauge whether or not you’ve set your fees high enough, but it also creates a valuable time and cost history for you when pricing a similar job. Even if you’re pricing your jobs to the customer and not using a cost-plus model, you still want to make sure that the job is profitable!
What Happened to My Day?
At the end of the day, do you ever wonder where it went? Keeping track of your time as you work is an essential step in figuring out where you’re spending your time and identifying the areas you want to improve. Having staff track their time can also help you figure out if you’ve adequately communicated the firm’s priorities. A firm that operates without any time tracking system will always be left wondering where their day went and why they are so often scrambling to finish client work on time.
How Efficient Are We?
How much time do you and your staff spend on reading and writing emails each day? On the phone with clients? In meetings? Are there jobs that seem to be taking longer than they should? Tracking time allows you to see your firm with a bird’s eye view, identifying areas where you can improve. Does your staff need more training or are they spending a lot of time tracking down resources they need? Maybe a formal communication policy is what’s needed to improve. The first step to improving is knowing where the problems are– and tracking time is a big part of creating that picture.
Is This Client Profitable?
Every client services firm knows what a bad client is like – the ones that expect you to answer their calls 24/7 but are nowhere to be found when it’s time to pay the bill. But do you know if your ‘good’ clients are profitable? In fact, sometimes your favorite clients can end up being the least profitable as you (or your staff) throw in a little extra work here and there at no charge. Those little extras can add up to change the scope of the original job while the price remains the same. If you are tracking time in your firm, this scope creep will stand out quickly and help you put a stop to it– or help you bill for it!
Aero Has the Answers
Time tracking is automated in Aero WorkFlow, allowing you and your staff to concentrate on getting your work done. The system is designed to give you the tools you need to make sure that your firm is being run as efficiently – and profitably – as possible. If you would like to know where your time goes and how you can work smarter, contact us today.
Hi, thank you for this post I agree with you that Keeping track of your time as you work is an essential step in figuring out where you’re spending your time and identifying the areas you want to improve. very useful information about price and time