[IMGCAP(1)]In today’s highly competitive market, accounting firms need a way to compare themselves to their past performance, and that of similar companies, as a barometer of achievement.
Successful firms use a common set of strategic and operational key performance indicators, or KPIs, to accomplish this goal. KPIs can include any number of metrics useful to your firm, including billings by client, revenue growth, contribution rate, utilization rate, realization, deal close ratio, customer lifetime value and more.
But the effectiveness of your chosen KPIs depends on your firm’s ability to capture and access related data.
Can you easily access project-specific metrics like days sales outstanding and project schedule variance?
Are you able to quickly view how much billable work remains incomplete? And do you know how much time passes between invoicing and payment?
In a word, you need insight. Enterprise resource planning software can help.
A project-based ERP system allows you to both create and measure your firm's KPIs by producing consistent, measurable data that can be matched to individual projects. With the ability to take information from every project, ERP software allows for full transparency and more accurate reporting through a central repository.
Using an ERP system, it becomes important to make sure your KPIs are realistic and built around real, measurable data. Make sure your project managers set realistic and achievable targets for the talent used on each project, as detailed in “The Ultimate List of the KPIs Every Professional Services Organization Should Measure.”
Having set their own targets, it’s then easy for project managers to create dashboards for people and projects. The result? Everyone can see and be accountable for their own KPIs, making them effective and easier to manage.
You can use this data to improve in various areas where you may be performing lower than the industry norm. Plus, having a full understanding of your capacity and available resources will leave you well-placed to better allocate them. Soon, you’ll find yourself creating new efficiencies by resolving resource allocation issues.
At the end of the day, accurate and timely data is about more than information. It’s the key to boosting efficiency and, therefore, profit. If you aren’t already, it’s time to invest in a project-based ERP system—and start creating your firm’s top KPIs—today.
Brian LaMee is the head of product marketing at Herndon-based Deltek, a global provider of enterprise software and information solutions for professional services firms.