Strategic benefits of time-capture technology for accounting firm profitability
Defending and Increasing Accounting Firm Profitability with Automated Time-Tracking Software
As technology commodifies many of the accounting industry’s primary services, firms face increasing price pressure and competition. New technologies have automated a growing variety of steps involved in tax and audit services, increasing the need for firms and their professionals to deliver greater client value. Understandably, this technology shift has driven price pressure, increasing the need for accounting firm automation and for firms to better understand their own profitability factors. But technology also serves as a solution to this problem, as many firms turn to time and billing software for accountants to maintain and even increase profitability.
The Dual Problem of Manual Timekeeping
Anyone who’s used a traditional time and billing software for accountants 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. 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 longer hours — especially when considering the various ways professionals get work done today: working from home, completing tasks from their mobile devices, 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’re leaving valuable business intelligence — and probably significant revenue — on the table.
Automated Time Tracking Software
A robust automated time tracking software 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’re working. OnePlace for Accounting time and billing software for accountants 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. OnePlace for Accounting also offers active prompting, providing users with the option of recording time immediately upon completion of a task to help ensure immediacy and accuracy of time-record narratives.
Many firms discount the need for good accountant time tracking data and analysis, since typical fixed-fee arrangements don’t seemingly demand the level of detail 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 informing competitive pricing while ensuring profitability.
Automated time tracking software and the robust data intelligence it provides allows firms to more accurately forecast the cost and value of future engagements, and potentially renegotiate fees on existing contracts. Accurate, detailed time tracking for accountants 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.
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