[IMGCAP(1)]The other day I spent an hour drafting a long email detailing out the errors I picked up on in a client’s balance sheet.
The email was great. The issues raised were clear and detailed. The client called the partner on the job for an explanation of all the points I raised. I nailed it! I billed my client two hours.
Last week I spent 20 minutes looking for a bank statement, couldn’t find it (despite knowing the client had already provided the information) and then shamelessly emailed the client for another copy of the document. 30 minutes of solid good time to bill.
Three weeks ago my client’s trial balance wouldn’t balance. I was told I should import the information into the trial balance software, but I had some extra time and nobody breathing down my back, so I input the trial balance by hand because it was easier and wouldn’t take much longer. That TB entry was a righteous two hours billed to the client.
Are you scratching your head yet? These scenarios play out every single day in my firm and your firm. We are accustomed and raised in the accounting industry to just bill our time, good or bad. Let the manager or partner determine whether or not to write off the time. It’s not “my” worry. At least, it’s not “my” issue today. This article is not intended to be pro or con for billing time or value billing. Instead, it’s meant to get us CPAs thinking about our self-worth, our capacity to change, and our desire to make a difference in the world, one community at a time.
I find it quite amusing that CPA firms are satisfied (and proud of their work) when they can realize 85 percent of their billings. 85 percent! I implore you to challenge yourself and your team that anything under 100 percent realizations is unacceptable. (For purposes of this argument, assume that the firm’s billing rates are reasonable and fair to the client and firm.)
100 percent realization—it’s doable, and here are the steps you and your firm should take in order to meet these goals:
1. Am I Making a Difference: Ask yourself this question every hour: Is what I am doing at this moment making the world a better place? Are you reformatting an Excel document for the tenth time? Or are you strategizing on the impact of a potential transaction? Are you still fiddling around with a piece of outdated software that takes an obscene amount of time to receive appropriate information? Or are you offering a new solution that will cut down on reporting time? If you find yourself redoing, reformatting and correcting, you are most likely not making a difference for your client or the community. Instead, try and focus on strategy, collaborating and resolving. In doing so, you will make a difference that will last more than just a day or week’s time. You will be impacting your client’s future, which is valuable to the client and more likely to create a situation where you can bill more than your actual rates.
2. Enhanced Communication: Focus on talking out of your mouth rather than drafting letters. The more face-to-face (in person or by video conference) conversations we can have, the greater impact we will make. Letters and emails are important but don’t have the same effect, speed or personalization as a meeting does. So next time you have a question for someone in your office, get out of your chair and ask the question in person. You are more likely to bill your rates during a collaborative meeting than the time to draft an 800-word letter.
3. Create Solutions: Never bill WIP. Bill solutions. At the end of the month we look at the time spent on a client and bill all of the time, or we write some of it off as wasted time. Try an alternative approach next month. Rather than reviewing the time in WIP, bill the completed projects (or solutions) that your firm provided during the month. Your firm helped a client identify the tax impact of a potential sale; bill it for what it’s worth, not what is in WIP. The value of the project is not solely based on your billing rates. You will find yourself writing up your time more often than not.
4. Enhance Efficiency: If you are not constantly reviewing the opportunities to increase efficiency in your firm, you are leaving potential billings on the table in addition to wearing out your people. Efficiency means making projects simpler and more automated for your staff to complete. As you automate your processes, you can deliver more solutions at lower costs (yet according to point #3, bill the same price). Efficiency does not reduce the amount you can bill your client, but it sure does reduce the stress on your staff. Earn more and live happier—that seems like a decent combination.
As we wrap up tax-planning season and roll into tax and compliance season, it is important to remind ourselves and our teams daily of the fact that growth in the firm depends on reducing stress, anxiety and difficulties for you and your client. When you find your firm is delivering solutions rather than creating complications, you will find your firm writing time up. What a novel idea!
Adam Blitz, CPA, is a tax and consulting manager at Wiebe Hinton Hambalek, LLP in Fresno, Calif. Along with his CPA, Adam has a Masters of Arts in Leadership Studies from Fresno Pacific University. Adam authored a thesis entitled, "The Leading CPA—the value of the leading CPA." Adam is focused on working with his clients, colleagues, and industry professionals in enhancing the value of the CPA. For additional information, he can be contacted at Adamb@whhcpas.com or via Twitter @getblitzed.
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