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Creating a Management Plan for Accounting Firms

The goal is to bridge tasks and clients, ensuring effective communication and integration between departments, firm managers, and their technologies.

Accounting firms face many of the same challenges as their clients, especially when it comes to tracking the progress of the services they provide. Regardless of the size of the practice, these services are often divided into projects; but there are more aspects than just monitoring milestones against the calendar that are necessary to gauge the efficiency and productivity of a firm. These factors rely heavily on the firm’s workflow: the strategy and order by which various tasks are performed. 

Effectively managing workflow, therefore, is the process by which these tasks are optimized so that when they are repeated, they are more efficient with each undertaking. Doing this requires examining each step to avoid wasting time and to maximize resources—both human and material. The resulting “optimized workflow” can end up being a checklist, spreadsheet, or even an app that helps keep staff in-tune with best-practices.

5 Steps to Create a Management Plan for Accounting Firms

On a larger scale, practice management is the process of continually examining each workflow within the firm. The goal being to bridge tasks and clients and ensure effective communication and integration between departments, firm managers, and their technologies. In particular, here are five steps to create a management plan for your accounting firm.

Step 1: Project Management

The good old fashioned checklist, or the modern equivalent, is an effective way to manage projects and specific tasks. These checklists and apps can help ensure that the top-level basics are tracked, including the nature of the job, staff assigned to it, due dates, billing dates, budgets, and other important aspects. 

To optimize this process, management should keep in mind who maintains each checklist or app and how assigned staff use and share it. With apps and digitally shared files, users are able to collaborate, adding to and updating tasks, statuses, and notes as necessary. Management should also evaluate how the staff uses the checklists/apps to identify the ease of scheduling, monitoring, and reporting on various tasks.

For firms with occasional staff turnover, it may be prudent to include how-to guides or instructions (web-based, if possible) for each step of the process, including how to contact the client. Any questions a routine user would have should be easy to find a solution to, while any time-consuming or difficult steps  should be eliminated. Providing simple resources for the checklist may require a small initial investment in time, but the time saved during future use will surpass that.

Step 2: In-Firm Communication

In any firm, there are numerous communications between management and staff, as well as clients and third parties such as vendors. These discussions take place in many formats, such as face-to-face meetings, email, chat, collaboration in web-based apps and portals, and video calls. Further complicating matters is the fact that there may be multiple individuals engaged in communication in each entity- and all of these threads are critical to each relationship. 

The effectiveness of your communications requires consistency in each medium. Since some may not occur in real-time (texting and email), and others do (phone, online collaboration, and video), they require different approaches. Client portals, for instance, can be very useful tools for both the firm and clients. It allows both to work on files and make requests during non-traditional working hours, while allowing each to receive the request when they return to their work. As such, these tools allow the workflow to continue moving when it otherwise would have stopped.

The selection of a communication system or workflow tool requires users to consider how each person will access the system, which will likely be across a variety of devices and operating systems. Likewise, integration between various systems should be considered. Many email, phone, and text systems automatically log communications and work, documenting engagements and contacts. Many virtual meeting systems, such as GoToMeeting, also offer a recording of meetings, providing an archived resource.

Step 3: Practice Management

The next step is to turn the firm’s work product into measurable revenue, which means getting your clients to pay their invoices.

While invoicing can be a fairly straightforward task, the art is in dealing with persistently-tardy payers and keeping aging accounts at manageable levels. 

Another key factor in practice management is measuring the productivity and profitability of not only the firm as a whole, but at a granular level that includes projects, tasks, and staff as well. Identifying your firm’s most profitable services and staff can help you reallocate resources to focus on growing those sectors, while also providing insight to less profitable services. Most professional practice management software systems have utilities for keeping up with this data, including:

  • Dashboards that track key performance indicators such as revenue, aging, time usage, and project benchmarks, 

  • Billing and workflow oversight, and 

  • Approval processes

Step 4: Time Management

Most firms have moved beyond a strict hourly-based billing paradigm, using either flat-fee billing or a subscription-based value billing model. But time tracking is still exceptionally important for firms because it can help firms assess the profitability of the various services they offer. Additionally, it can be used to weigh the comparative efficiency of individual staff members. This information allows the firm to periodically assess their billing structure and identify bottlenecks in workflow processes, reducing unbillable time.

Step 5: Integrating Systems

Key workflow programs, practice management systems, time tracking apps, and communication tools should integrate directly with the firm’s core client service technologies, including accounting and tax compliance systems. This integration saves significant time that would otherwise be wasted documenting and transferring data. It also improves the accuracy of that data, since information that is  calculated and entered manually is more prone to error. 

Ideally, the firm’s time and practice management systems will integrate with billing and even payroll, helping to eliminate redundant data entry functions. This also allows for an analysis of billable and non-billable time, estimates versus actual time, projected and actual billings, material costs, and more.

A Practice Management Plan is Critical to Profitability

A firm may run well without an established practice management plan, but it will not run as efficiently or as profitably as it could. Putting some thought and time into how your firm’s various components work, together and separately, is essential to optimizing your revenues, reducing wasted time, and improving client and staff satisfaction. By integrating with the latest practice management, project management, time management, communications tools, and firm-focused apps, you can get a better grasp on your firm’s direction and keep it on course.


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