"I make it a point to be accurate with my timesheet, said no employee ever."
Timesheets have a time-honored tradition of being the brunt of jokes from staff and management alike. Tracking how your employees spend their day, however, is essential for a business to grow and flourish. By communicating the importance of accurate timekeeping to your staff, you can be assured of having reliable information at your fingertips to make important business decisions. Here are three ways that accurate timesheets can help your business's bottom line:
Improve Employee Efficiency
There's usually a learning curve during the first year of any new tax or audit engagement. Throw a brand-new employee right out of college into the equation and you've got a recipe for doubling or even tripling the expected budget for that engagement.
Accurate time tracking can raise a red flag to indicate there might be a productivity issue. After becoming aware of efficiency issues, thanks in part to your firm's practice of accurate time tracking, you can design a solution to increase an employee's productivity. In public accounting firms that specialize in taxation, productivity could be improved by offering training on how to input returns into tax prep software, creating new guidelines so that prior year workpapers are easier to follow or providing a CPE course that explains a new section of the tax code.
The end result could be the doubling, or even tripling, of an employee's efficiency. What if an employee who took five hours to prepare one tax return that you billed for $2,000 could be trained to prepare two tax returns in the same five hours that you could now bill for a total of $4,000? Would you make the investment to improve that employee's productivity?
You would never have been alerted to your employee's inefficiency, however, without the submission of accurate timesheets.
Identify which Clients are Better Off with Another Firm
While digging beneath the surface of a blown budget on an audit engagement, you discover that your client placed 10 separate calls to an associate of yours over a one week period. The average number of times your firm speaks with clients over the phone is two or three times per quarter. How long should you continue to tolerate a "high-maintenance" client?
An advantage of accurate time tracking is being able to quickly identify which clients are consistently over-budget. You can then decide whether it's worth the effort to clarify expectations with your client, perhaps suggesting in this example that general phone calls be limited to once per month unless there is an emergency. If a solution cannot be agreed upon, offer to help your client find another firm to work with.
Determine When to Hire Your Next Employee
All your employees are now operating at peak efficiency and the least-profitable clients are now gone. Running a business has never been easier! Well, until you discover that your award-winning employees can't physically handle any additional workload. It's time to hire your next employee.
Be confident that you know when the time is right to bring on board the next part-time or full-time employee. Accurate time tracking should give you warning signs well ahead of time that your business's capacity for taking on new work is shrinking.
As a business owner or manager, you can still be light-hearted and contribute to timesheet humor with your employees while appreciating the vital role they play to a profitable business. Improving employee efficiency, identifying which clients to cut loose and determining when to hire your next employee are three of the many ways that accurate timesheets can contribute to a bigger bottom line for your business.
BQE products can help improve your bottom line and efficiency in all the areas discussed above. You can check these award-winning software solutions on our website.
About the Author: Mark Khurshid, our Vice President of Training and Consulting, improves our products and works with users one-on-one to make sure they're learning how to get the most out of their software. His familiarity with all our products is rivaled by few, and when we can get a blog out of him, we leap at the opportunity.