To paraphrase Gordon Gekko, growth is good.
Accountants and auditors, notorious for being overworked, have precious little time to level up as they juggle unforgiving schedules that often mean the loss of billable hours.
Senior decision-makers frustration with practice expansion can be boiled down to four common roadblocks.
1 – Inefficient resource management
As anyone who’s organised a Zoom call over three continents knows, it’s an onerous task to virtually monitor and manage the kind of major projects that are standard in large firms. One wrong move can cause significant delays, undermine the quality of work, risk non-compliance, and ultimately damage client relationships.
Lack of visibility is behind most resource management inefficiencies, as outdated methods of calculating staffing and skills data (yes, that means your Excel addiction) remain. Spreadsheets are still the favoured option for resourcing matters, when real-time analytics and intelligent automated software solutions are significantly more, well, resourceful.
Autonomous planning can deliver an instant snapshot of a project and determine who has the right skills, who’s available, and who’s not.
Sloppy resource management on a basic level leads to some team members being overworked, while others can be left twiddling their thumbs. Underutilised employees are not only a drain on profitability, but they also don’t get to show off their skills or learn new ones through experience.
2 – Human capital mismanagement
Doing admin can be like tending a big garden: if you let it slide, weeds will cover the place, and you’re left filling in forms late on a Friday night, again.
Research by Capgemini revealed half of all managers waste more than three hours a day on needless admin tasks that add no value. This causes huge chunks of billable hours to be lost on non-billable work, inaccurate timekeeping, and are even written off entirely when projects overrun.
Utilisation rates are the most popular barometer for productivity in professional services, and of course, boosting these goes straight to the bottom line. Companies tend to aim for an overall utilisation rate of 75% or more. What’s to say with a better system you can’t hit 80% or higher?
Tracking and measuring billable utilisation is a major headache for large firms. The problems go deeper when the strategy is to maximise the number of billable hours for everyone, as that can lead to employee churn.
Cutting the hours spent on non-billable admin tasks such as planning can have a transformative effect. Automating processes and streamlining timesheets and forecasting, for example, can release key staff to work on high-value projects (such as planting bulbs and watering that tree which looks a bit wilty).
3 – Employee dissatisfaction
Burnout is rife, and the business also has a reputation for bias and a lack of diversity. Underutilised staff become disengaged, which impacts not just enthusiasm but focus. In a profession where accuracy and an eye for detail is key, these traits can be fatal for firms’ profitability (and liability) if left unchecked. Staff morale is a precious thing, and one bad apple can quickly spoil the bunch.
High burnout rates can destabilise teams and even entire departments. Like horror movies where the hero’s friends keep getting bumped off, it’s no fun being on a major project where everyone around you is leaving the firm – and leaving you with the work.
Clear, real-time insights into not just workload but the available skill sets and experience of your team makes better use of your most important resource – your people. Finding a hidden gem, such as a new starter who can speak another language, could mean the difference between winning or losing a new client.
4 – The hunt for new business
In the 1990s the internet was decried as the harbinger of death for a score of industries. Consumers could shop without leaving home, talk to friends across the world for free, and never run out of camera film ever again.
The narratives surrounding market turmoil contain the usual tropes of challenging environments and desperate sales pipelines, as we saw back then we are seeing now in the wake of the pandemic. But opportunities may lie closer than it first seems.
Entrepreneurial professional services firms are turning inward to build on the value of their existing client relationships. Delivering to time and budget commitments, and meeting demands during a period of high-stress puts them in a much better position to offer more value-added, higher-margin services.
Automated solutions can take the pain out of billing conversations, and having advance notice of engagement risks gives you time to correct course and fix problems before they escalate. Fixing what seem like minor issues can lead to stronger relationships with your clients and ultimately lead to more opportunities to sell services.
Of course, there isn’t a magic pill to help you leap each of these roadblocks. But tackling them now will put your business in a much better position to achieve and sustain growth.
To paraphrase Mr Gekko again, the most valuable commodity in business is information. Intelligent automation can provide a much greater perspective of the overall trajectory of your business. Freeing up staff to concentrate on billable, high-value projects and solidifying your reputation as a firm that delivers is critical during economic uncertainty.