Turn Your Timesheets From Pain to Gain

There’s gold to be found in your firm’s timesheets. 

That might sound hard to believe, given many accounting professionals find timesheets to be time and resource sinks.

But when used properly, timesheets can improve your firm’s profits significantly, noted Jean-Guy Talbot, a practice management specialist and the founder and CEO of Winnipeg-based accounting firm Talbot & Associates. Talbot was speaking at a recent Caseware webinar called Turn Your Timesheets From Pain to Gain.

Some firms use timesheets simply as a way to track the time staff spend on projects. That’s a mistake, Talbot said. You need to invest in quality time/billing software so you can run your practice effectively and find out what’s happening under the hood at your firm.

There are three key features you should look for in time/billing solutions, Talbot explained. The software should be able to:

The last feature is particularly crucial, Talbot noted. To boost your firm’s profits you need to be able to track utilization and realization for each employee. Utilization is the percentage of an employee’s time that is spent on chargeable tasks, while realization is the revenue an employee is generating per hour billed to clients. It’s important to note realization rates are different from the actual charge out rates you bill.

Improving utilization

Employees should have different expectations in terms of utilization rates. “I refer to people on my team as finders, grinders or minders,” Talbot said. Finders are the ones who bring in new clients; minders mind the practice and include people like your human resources person and receptionist; and grinders are the employees handling most of the client work. 

Grinders should have utilization rates around 90 percent, Talbot noted, while, at the other extreme, a receptionist at a large firm might have a utilization rate of 20 percent.

Talbot offered a few tips to improve your employee utilization rates if they’re too low:

Realizing higher profits

To maximize realization for your firm, Talbot said the key is learning value billing. You need to generate as many dollars as possible for the services you render.

Some easy ways to boost realization are:

Timesheets can help boost realization if they’re set up properly, Talbot said. The key is to break down all your services by codes. That way you can evaluate each employee to see what services they’re best suited for. Employees who deliver write-ups for services are able to generate value for your firm above your hourly charge-out rate. And those who deliver write-downs are delivering less than your charge-out rate.

If an employee is consistently delivering write-downs on a specific service, you can either stop giving them that kind of work, or you can train them to become better at it, Talbot said. And if they’re consistently delivering write-ups you can give them more of that type of work.

If you have an employee who shines in a particular area, you can consider bumping up their charge-out rate for that particular service, Talbot said. “It’s not uncommon for any one of our employees to have a standard charge-out rate, but also have a bunch of services that have a charge-out rate that’s higher than their standard rate,” he explained.

Talbot noted some people think having detailed timesheets is overkill, but it’s the detail that helps you identify your team members’ strengths and weaknesses. Doing so helps you maximize your revenue.

“Most times when I mentor clients, I’m able to boost their realization by about 10 percent,” he said. “And that’s by simply implementing proper evaluations and practices.”

Find out how Caseware solutions can set your firm up for success. Book a demo today.