Will software provide the tool for doing value added and consulting work?
When you started your firm, you knew from your early internship and years spent getting your feet wet, how to do billable hourly tracking. There is a plethora of software on the market, many tied into practice management software, that assists you in that endeavor. Well, Dorothy, the software to get you to value-added billing and consulting rather than billable hours is not in the bag the Wizard is holding. Just like Dorothy, to get where you want to go, you need to take a different path altogether.
Many businesses are launched with a specific goal in mind. When developing a plan, one typically creates a mission statement and defines a targeted audience. A business may even support multiple target audiences, but there are certain commonalities that are maintained the for efficiency to manage multiple targets. For example, a grocery store chain may have slightly different product selections on the shelves of their upscale locations as opposed to their locations in low-income areas. The flyers that are sent out may have different specials to capture the eye of the consumer in a specific area. The economics of the audiences are different; even the ethnic breakups are different. Some areas of a city may be heavily populated with people who celebrate Passover as opposed to Easter. Regardless, there is a common thread for the grocery chain: the audiences all want to purchase food. The grocery chain purchases food from the same suppliers for all locations, the distribution channels follow the same route, the employees all use the same tools to perform their tasks and sequencing of days to work are the same. The marketing is geared towards the buying habits of the largest cohort in a geographical area and becomes the method for pinpointing the largest cohort.
When I visit accounting firms that handle tax, accounting and bookkeeping functions, the only commonality of the cohort is they want something done that has to do with getting a handle on their money. I see tax accountants that have individual, as well as business tax clients, and the variable compliance dates, work in their favor. The process for doing either is well-defined and, again, there is software that walks even the newest newbie through the prep process.
Now add in accounting and bookkeeping for those slow months, and the external boundary of the cohort widens. And it widens not just with a type of business but with a type of communication, type of tracking, a variety of tasking sequences, a type of software and a difference in perceived value and satisfaction of the function performed. How many other professional careers require such a deep variety of methods to arrive at essentially the same result, in the case of accounting, a balance sheet and a P&L? None. Even medical doctors are specialized to the point that your GP is now no more than a referral center for the next specialist up the chain.
The only process in the accounting and bookkeeping office is that the debits are on the left, credits on the right and they have to balance. That was taught in Accounting 101, and it has always been the case and will be unless something from the planet Gallifrey lands a Tardis on Planet Earth. Then I am not sure debits will always be on the left and credits always on the right. In the meantime the quest to make those debits and credits balance is followed in the same time-honored path of “Wait, Wait, Wait, Go, Wait.”
Does this sound familiar? Ok, I got the information I need, so go ahead and balance. Wait, the software is not compatible. Go, got everything compatible. Wait, enough time has passed, and now I need more source information. Go, received additional source. Wait, there are questions. Send an email. Wait, wait, wait. Leave a voice message. Wait, wait, wait. Twenty-four hours to drop dead meeting with the client to go over those nice balanced accounts. Send receptionist out to pick up information needed. Go, finish those balances at the witching hour. Thirty days after the meeting send out an invoice for hourly work performed. Note to self, most of the time spent was in the chasing of the information, not the balancing and very little, if any, on understanding the results.
This is the year of the value-added pricing and consulting accounting firms. Accountants and bookkeepers are encouraged to get out and do the value-added work and get rid of billable hours. I agree that is the way of the future. However, if you do not take into account the amount of time wasted on the “Wait, Wait, Wait, Go, Wait” path and change directions on the front, neither value-added pricing or consulting will be the panacea you hoped for. Rather it may just become a journey through your own “Haunted Forest.”
Penny Breslin is the founder of MoneyPenny, a consulting firm specializing in helping accounting firms and other businesses embrace the power of technology to simplify their operations and increase their profit margins.
Penny has been recognized by Worldwide Who’s Who for showing dedication, leadership, and excellence in providing quality consulting services to an international clientele made up of CPA firms and other businesses.
Penny holds a Master of Business Administration in Global Management and is a member of the Intuit Pro-Advisor Group, is a Xero Certified Advisor, a member of the Wave Pro Network, and a FreshBooks consultant. A firm believer in being able to work from anywhere, you’ll often find Penny running her business on the beach after a morning surf session.