How Firm Management Processes are Holding Your CPA Firm Back

Firm management software like time entry, billing, accounts receivable, and financial management are often considered non-mission-critical to CPA firms, but they can have a big impact on the profitability of your firm. Improving these firm management workflows can help increase firm profitability, cash flow, staff engagement and client satisfaction. If you want to improve the back office processes in your firm, be on the look-out for these often-overlooked problems.

• Time capture happens separately from the actual work
Enforcing time capture policies is always a struggle, so any way to make time capture easier on your staff will also help improve compliance with your policies. Look for ways to automate the time capture process, for example setting up timers within your tax software that are easy to start and stop and automatically remind staff to capture their time. Mobile time capture apps also help your staff capture staff while they are on the go, whether at client offices or working remotely.

• Your invoices take too long to reach your clients
The sooner your clients receive their bills, the sooner they’ll remit payment, so why are you waiting until the beginning of the next month to send your invoice? Generating invoices as soon as an engagement is done can bring money in the door faster, and onscreen billing makes this process a lot easier. A better alternative to month end billing is “real time” billing or providing an invoice along with the completed project. If you’re not addressing the first item in this list around time capture, “real time” billing is hard to implement. Another better alternative, if your firm is culturally ready, is moving towards value pricing at regular intervals. This helps clients by providing more predictable invoicing and payment patterns and helps your business even out some of the revenue seasonality that is common in CPA firms.

• You aren’t monitoring project metrics
Comparing actual vs. budget is a tried and true metric, but can be difficult when your project management system doesn’t integrate with your time and billing system. Other emerging metrics such as lead time (time to complete a project, or your step in the project once it’s picked up) and cycle time (time to complete the project once it’s in house) are also great metrics that go above and beyond just the number of hours a project took to complete. There is a lot of lost time on a project that isn’t quantifiable in just budget to actual hours. Regularly monitoring these projects metrics is important to avoid unpleasant surprises, spot patterns and bottle necks early. An integrated system is absolutely necessary.

• You don’t know enough about your clients
With client information spread across many different programs within your firm, it can be difficult to really get to know your clients and their businesses. Compounding the problem, traditionally, we’re not great at keeping information up to date across all systems. Having a central database for client information makes the new client intake process easier and helps everyone in the firm keep that information up to date. If that central database has APIs that allow you to connect client information to other important databases within the firm, all the better and more efficient for your business.

• You haven’t installed the updates
Most firm management software is updated several times throughout the year, but installing these updates can be time-consuming, because you have to coordinate all devices being brought back into the office, backups to take and many other tasks associated with applying a local update. That being said, of you are using a version locally hosted in your firm, the updates are worth it, invest the time. New functionality is added to the program to improve your experience and make you more effective. If you choose a cloud-based firm management system, updates are generally required and automatically applied. You can always be sure that your firm is quickly benefiting from the latest enhancements and new features, without the hassle of manual installs.

To find out what steps future-ready firms are taking to succeed in the future, download our whitepaper: Laying the Foundation for Firm Success in 2016.


Samantha Grovenstein-Deal

All stories by: Samantha Grovenstein-Deal

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