Last month at one of my quarterly client boardroom meetings, the question of timesheets and whether they are a good or bad idea was raised.
What was interesting for me was that in the room the split was nearly exactly 50/50.
Half of the room thought timesheets were a waste of time and more hassle than they’re worth (keep reading to find out why in some cases this might by true…)
And the other half thought they were an essential tool for measuring and improving efficiency.
So, the question is, do timesheets still have a place in the accountancy practices of 2018?
The answer is, it depends.
Let’s start by looking at why timesheets can be useful…
Here are 3 ways you can use timesheets to improve the overall performance of your accountancy practice:
1. Efficiency of your overall ‘operation’
One-way timesheets are useful is by determining the efficiency of your overall ‘operation’.
What I mean by this is the systems and processes you have in place for work to be completed.
For example, you might see from timesheets that on average it’s taking members of your team longer to complete a set of accounts than what it should.
Now, this could be down to their individual efficiency (see the point below), or it could be down to the efficiency of your overall operation.
- Are the systems in your practice robust enough so that when your team begin working on jobs they have all of the information needed to complete it in one go? Or are they having to stop and start to go back to clients for items that are missing?
- Are you utilising the latest technology to speed up certain elements of the production? E.g. Invoice/receipt scanning software such as AutoEntry, or software for analysing transactions and generating review points such as CheckMyBooks.
Through the implementation of a time recording system, you can highlight where the holes are in the efficiency of your operation and move to plug them fast.
2. Efficiency of your team
Another way timesheets can be useful in terms of the efficiency of your practice, is by allowing you to measure the efficiency of individual team members.
When reviewing jobs, if you can see that certain tasks are taking members of your team 6 hours when in actual fact it should only really take them 3, it highlights a potential issue that can be addressed.
- Does the issue lie in the ability of the team member? In which case they may require additional training which is entirely your responsibility.
- Is this issue to do with the overall efficiency of your operation as discussed in the point above?
- Or perhaps the issue is with their overall attitude and performance in the role?
By having your team members record their time, you can pick up on these minor details, and rectify any issues before they have a detrimental effect on your practices performance.
3. Fee reviews
The aim with fixed-fee pricing is to make the job as profitable as possible, by completing it as efficiently as you possibly can.
In reality, this isn’t always the case…
It’s therefore important that you know how many hours a job took to complete so that when you come to review the fixed-fee, you know how much you need to increase it by to increase the profitability of the job.
For jobs such as bookkeeping where the scope of work is more susceptible to change e.g. an increase in the number of invoices/receipts processed each month, it’s worth considering quarterly fee reviews to maintain the profitability of the job throughout the year.
But aren’t timesheets more hassle than they’re worth?
Timesheets are an imperfect solution…
Some of the main problems associated with them are:
- They’re inaccurate and rely on people remembering/writing down everything they worked on
- They’re time consuming which ironically can affect your efficiency
- They’re boring and often demotivating for your team
The extent of these problems can be reduced by using the right technology however. A number of workflow softwares e.g. AccountancyManager and Glide have built in time recording software to make it easier and more accurate for your team. Standalone software e.g. Timely and Toggl are also great options. (Here is an honest review of Toggl from somebody who discovered it through this article.)
The question is though, are timesheets more hassle than they’re worth?
Here’s what I think…
If efficiency is not a problem in your practice, and you have other means of being able to review your fixed-fees to drive up profitability, then perhaps timesheets are more hassle than they’re worth for you right now.
Your time might be better spent dealing with more pressing challenges that you are facing.
But, if efficiency is a problem in your practice, then I would recommend you implement a system for tracking time so that you can identify where the inefficiencies lie and make plans to deal with them.
Do you use timesheets in your practice? What are your reasons for and against? Comment below and let’s continue the conversation down there…