have consulted with hundreds of firms over the last fifteen years about setting up billing software and practice management software. While each firm has its unique needs, one thing is clear: owners want to earn a good living for what they do.

There are entrepreneurs, leaving the comfort of a secure job and paycheck to brave the ownership world of hard work and risk. To do this they have to be able to charge top dollar yet remain competitive with the market price for accounting services. This takes persistence since markets are always in flux, causing periodic review, analysis and adjustments of fees. Determining the right fee is becoming more difficult with clients considering online tax and payroll services. Many businesses are taking their accounting in-house using QuickBooks, Peachtree or other software and less firm accounting services. This is challenging firms to review fee levels and workflow processes, thus demanding changes to remain competitive and profitable.

There are questions owners need to consider, regarding fee structures and firm productivity that should be reviewed periodically. How do we charge enough but not too much? Are we utilizing staff effectively? Are current workflow procedures adequate? How do we measure productivity and profitability on a client or staff basis? What software can help us? These questions are entirely different from what other business owners face. Most businesses can sell products at market price, measure their fixed costs and report profitability, even charging a market hourly fee for services. What is unique about CPAs, Enrolled Agents and other accounting professionals, is that we charge for expertise and experience along with the time spent on a client’s work. So how do we charge optimum fees without over charging?

There is only one proven way to be sure. Firms must institute methods to accurately Practice Management software.

Even with the right software I had to convince accountants that if we tracked hours each day as we managed workflow, firms would capture more time and be more productive. This is a win-win proposition! Of course, tell that to accounting professionals, they would need to see the proof in the numbers. I have seen firm after firm where 20-40% more time was captured if keyed throughout the day. Studies tell us that if we estimate our time on a periodic basis, as opposed to doing it throughout the day, we capture more time, ergo our fees go up. If we recap time later or estimate, we will underestimate and undervalue what we do for clients. This is especially true with our staff, 45 minutes turns into 30 minutes, 2 1/2 hours turns into 2 hours. With inaccurate time, how can we really know how much time staff is spending on client work? Too much or too little is a disaster waiting to happen. Profits go down, expenses go up and clients leave to find lower fees. None of this is good and our neighboring accountants are becoming more efficient, charging less, and winning the business success battle. I think it’s time to “go to the mattresses!” Our goal should be to become the best at what we do and charge what we are worth.

The flip side to this equation is that fees are tied to staff performance. Efficiencies and productivity are important to measure since they directly relate to what a client is willing to pay. Is work being done on time, accurately and for the right amount? Are we getting work done as promised? Are we spending too much time with one client over another? Without time-based productivity reporting we will never have a goal for our staff to attain. Inevitably, our fees are a guessing game and we are just hoping at the end of the year we’ll show a profit. In order to attain the profitability we desire from our business, we must manage with more direction and purpose.

How do we charge the right fee? It starts with the software I mentioned earlier, Practice Management. Imagine tracking time while updating workflow. When you finish a task whether it’s a phone call, reviewing a tax return or creating a document, you can be prompted to enter your time or use timers as a part of your workflow. Any task cumulates the actual time your staff spends on a client or task. This is fully reportable and visible onscreen so we can make fee decisions now and in the future. We can know when a client receives a $700 tax return, that we didn’t give it away because we had $900 in real time. We can see exactly how much time was spent, by which staff member and evaluate whether we have a resource, staff, or client problem to solve. If we charge for specific staff expertise we will see this in a billing utilization report. The Practice Management software from Office Tools Professional does all of this tracking and reporting with little effort. As a result, there are no more excuses about tracking time and workflow!

The reality is, I’ve never seen a firm where improvements can’t be made. Sure, many would prefer I leave this alone but the truth is, I get paid to help firms improve. I was talking to a firm recently that went from twelve staff to nine and from $1.4 million in revenue to nearly $2 million due to improved efficiencies, new software, and revised procedures. They improved their effectiveness in serving clients with less total hours. This included branded website portals, practice management software and many other simple changes. Sometimes bringing in an outsider can bring perspective. That’s what we do!

It is easy for accountants to become so caught up in the day-to-day activities of the business, that dealing with the overall management of the business is overlooked. I encourage firms to take a hard look at exactly how much time they are spending on clients work and decide if they are charging the right amount and if they are efficient with their time. This is the only way we can know we are charging what we are worth, earning a good living, and bringing value to our firms.