Reclaim your time: 5 ways your firm can prevent revenue leakage with time tracking software
In business, there’s no doubt that time is money, which is why accountants and consultants should record every minute of their billable and non-billable work as accurately as possible. When firms don’t optimize their timekeeping practices, accountants and consultants are more likely to submit inaccurate or even noncompliant time sheets, which can hurt their firm’s profitability and reputation.
Discover how accountants and consultants can work smarter — and increase profits — with better timekeeping. Here are the top 5 ways imprecise timekeeping leads to revenue leakage and how advanced, AI-powered time tracking software for accountants and consultants can help your firm avoid any unintended loss of revenue.
1. Time lost
Often, accountants and consultants wait until the end of the week to record their hours, relying on just their memory. However, it’s nearly impossible for accountants and consultants to accurately recall every increment of billable and non-billable work, especially when you consider they may be working on multiple different engagements in a single week.
Besides juggling their various daily tasks, these professionals also squeeze in last-minute meetings, take impromptu client calls, and deal with other unexpected interruptions. It can be quite easy for them to forget to add the hours spent on these unplanned tasks to their time sheets, resulting in unbilled hours — and the money they would have generated — going down the drain.
Automated time sheet software for accountants and consultants can help ensure that all work is accurately captured in real time. Accountants and consultants can then review and edit their entries in just a few minutes and submit their time sheets with confidence.
2. Time omitted
In addition to forgetting to record certain tasks, accountants and consultants who reconstruct their hours from memory may inadvertently undercount their hours altogether. Other staffers may purposefully underreport hours if they took too long on a project — perhaps because they weren’t properly trained, or they didn’t have the proper support and resources to perform the work in a timely manner.
Some accountants and consultants may even omit hours if they’re unsure whether the task is billable, or — as in the case of many fixed fee engagements — they may omit hours to ensure they stay within the agreed-upon budget. Although omitting or underreporting hours may seem like a worthy price to pay to avoid difficult conversations, it causes a lot of damage — financial and otherwise — to firms in the long run.
When professionals don’t capture the true efforts via their time sheets, firms can’t appropriately price similar matters moving forward. If a firm’s pricing strategy doesn’t reflect the actual amount of labor it takes to provide value to clients, the firm’s margins will erode. That’s why it’s so important to record both billable and non-billable work.
Even if the firm can’t bill for those extra hours on its latest project, the firm will at least know to increase the maximum number of billable hours for future engagements.
Capturing work effort also provides firms with insights on how to improve processes. For instance, you may notice that some staffers are spending large amounts of time creating presentations from scratch, in which case you could create templates to help speed up the process.
3. Time waiting
Naturally, firms want invoices to be paid as quickly as possible. But when firms don’t practice precise timekeeping, clients will likely have questions about their bills, slowing down the payment process, effectively impacting the firm working capital and financial position.
Because capturing all work efforts and providing details around those tasks can be time-consuming, many accountants and consultants simply provide lump-sum bills. However, if a client asks for clarification as to the work and hours they were billed for — or if they need the hours broken down for their own accounting purposes — then those accountants and consultants must spend additional, non-billable time to find and then report those details.
Providing details upfront by breaking hours into smaller, more precise increments makes it more likely that clients will pay their invoices faster.
4. Time written off
As previously mentioned, reconstructing time from memory can lead to some big mistakes. Not only can you forget to report something; you can also report the wrong thing.
Whereas “time omitted” is usually omitted accidentally and impacts future financial outcomes, “time written off” is intentional and has an immediate impact on firm financials. These hours are often written off by a partner or engagement manager — or worse, requested by client — because the hours never should have been billed in the first place.
Let’s say you provide a client with a lump-sum bill and the client asks for more details. You discover that you billed the client for travel or training time even though you shouldn’t have. In addition to write-offs, noncompliant bills like this can sour client relationships, potentially leading to a loss of future business with that client.
Providing a detailed accurate bill is of great service to your clients. By providing real-time alerts and guidance during time of entry, firms avoid recording work that violates client requirements, reduce billing rejections, and improve realization.
5. Time wasted
Accountants and consultants are already extremely busy working with clients. The last thing they want is to fill out time sheets.
Without the proper technology in place, most timekeepers record their hours manually via a spreadsheet, word-processing document, or even pen and paper. Then, at the end of the day or week, they must review their hours, determine billing codes for each time increment, and enter everything in the proper format. At one accounting firm, staff reported this took up to 30 minutes per worker; with nearly 6,000 accountants on staff, that added up to 3,000 hours of wasted hours per week for the firm.
This manual process is tedious, inefficient, and prone to human error, and it means accountants and consultants have fewer billable hours to work on the engagement itself. By investing in automated timekeeping technology, firms can delegate the time-recording tasks to the software, so their accountants and consultants can focus on the clients.
Improve accuracy and increase revenue with technology
Automated, AI-enabled time tracking software for accountants and consultants can help optimize timekeeping practices so you can create more accurate time sheets, improve the billing process, and reduce leakage. Tools like Intapp Time offer both passive and active capture features along with timekeeping prompts, ensuring that all your billable and non-billable work is accounted for and that nothing is left out. The software also saves you time by providing suggestions for categorizations, as well as templates for recurring or similar tasks that automatically fill in narrative details.
Additionally, Intapp Time ensures compliance with client billing terms at the point of time entry, as it automatically notifies users of errors, preventing noncompliant submissions from moving forward in the billing process. This reduces the risk of write-offs and speeds up realization.
If you’re interested in learning more about how Intapp Time can help your firm improve timekeeping and reduce leakage, schedule a demo.
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