In my discussions with accountants from around the UK, Ireland and the US the most exciting and heated debates are around the old “time recording” arena. Do you or don’t you is what I always ask and then, WHY?
It is really interesting to hear all the different views from varied practices but I still haven’t got the right answer. Nearly every practice I speak to had their own reason for why they do what they do, which, funny enough, is totally different to the next firm.
One day I did two back to back presentations. The first guy, let’s call him Peter, didn’t record any time, did fixed fee for all work and wasn’t interested in KPI’s, WIP balances or how much time his team had spent on a certain job to how much time was being wasted making calls to a, particularly needy client.
The next meeting with another accountant, let’s call her Jane, was the polar opposite. Jane wanted to charge every minute of the day to a client, so when a staff member nipped off for a call of nature, the clock was still ticking and that time was posted to the client they were working on at the time. Jane’s software was not efficient enough for this, so Jane had developed a primary spreadsheet that all staff used to record their time (including coffee refills and bathroom breaks) on the fly. At the end of the week, Jane would then gather this data from the multiple spreadsheets and then drop this information into her Time Recording Software.
This is where the debate gets fun. Is Peter correct? He doesn’t waste any time recording time, doesn’t waste any time berating his staff, checking KPI’s, writing off WIP, calculating bills, worry about overcharging a needy client, stressing about the level of WIP, having too much non-chargeable time, checking reports. But how can he be certain that his clients are paying fairly for the work that he is doing?
Jane, on the other hand, knows exactly what her staff are up to, what her clients are costing them, how much money her practice is making, and the profitability of the practice. She needs to spend a fair bit of time to get all this data sorted and each of staff has to be diligent to ensure all their minutes are booked to the right client. Jane can feedback to her staff about how well they are doing, or not and also make a decision on how much to charge that needy client.
Peter and his team get on with work and hopefully at the end of the day they make a profit and I guess, they’ll know if a client is particularly needy and review their fees at their next annual meeting. Jane meanwhile, probably has to write off some of the WIP as some bills could be quite high and she doesn’t want to upset her long term, clients. Then does she resent them for having a discount?
This time recording argument will battle on, and until there is a PROVEN correct answer, everyone will carry on doing what they believe is right for their practice, and that is probably the best thing to do.
I would be interested to hear your views on this controversial topic and maybe you have the perfect solution?
Our software has been designed to offer a form of time recording out of the box, but with our extensive reporting we can cater for most needs. We are still trying to fathom out Jane’s issues, but that may not be software related! We’ll keep developing our software to help with all kinds of practices, but sometimes it is not possible to please all the people, all the time.