So, you write to your accounts preparation client asking him to bring in the books and records, which he duly does on Monday morning? When does the client think you will start the work? Probably he expects you to start on Monday, but perhaps Tuesday. What do most firms do? They stick then on the shelf and they join the queue. Eventually they get around to them a few weeks (or months!) later.
In fairness, as far as efficiency is concerned, books sitting on the shelf have no effect. It is poor client care, but you haven’t started yet so no time has been charged.
When your staff do get around to starting the work how confident are you that everything that you need will be there? We now that every time you pick up a job to work on and then put it down again you lose time, so avoid starting jobs that you know you will be unable to complete promptly. Ensure that the books and records are checked when they are brought in, rather than just before the job is due to start. Ideally, the receptionist can be trained to carry out this function.
When applying this concept to tax return work one firm estimated that up to 50% of the time charged for tax returns related to chasing the client for missing or incomplete information. They therefore offered the clients a 10% discount on the fee if the client provided all the information required when they brought in the books and records. They actually scheduled in timed appointments for the clients. They would see the client and check that they had everything they needed. If they did they’d confirm this and agree the time later that day for the client to return (always several hours later, even if it was only a 15 to 30 minute job – you should never make it look too easy!). If the records were not complete they ask for the additional information before starting and tell the client that sadly they don’t qualify for the discount this year.
If the thought of giving a discount worries you, you can always increase the basic cost of the work so that the discount reduces it to close to the original fee. However, if the client is to be encouraged to help you improve efficiency I believe that there ought to be some incentive for him if he does this.
The same applies at the other end of the work. Let’s take an audit? Many firms do not set their staff targets to achieve, yet strange as it may seem, most staff will create their own targets if you don’t do it for them. One of the targets that staff seem to pick is completing the field work and getting back to the office as quickly as possible. This sounds great, but is frequently a big source of problems.
Remember those days in the office when you planned to do a number of specific tasks, yet you found that the day ran you rather than you ran it? So many interruptions happened that by the end of the day you’d done none of the tasks that you’d planned to do. Now remember how you struggled to complete your time sheet for that day. What did you actually do? You know you were busy, but to whom do you charge it? When this happens to your staff, and they are supposed to be completing your audit, guess where they charge the time?
And just as starting without all the records wastes time, so time is lost at the completion stage when the review process picks up unfinished work or additional information required from the client. What do you do – go back on site? And once your staff return to the office they are often seen as “available” and get “borrowed” for another assignment. This can create significant delays in the completion process as review points sit waiting for the staff to become available again. Coming back to the office too early frequently results in quality issues or efficiency issues.
We have a number of firms that meet with the client at the planning stage to identify any particular issues or risk that might be relevant to the current audit, agree the period on site for the field work and the date of the final clearance meeting. That final clearance meeting to sign off the audit is normally within about 5 working days of the end of the field work – a very tight deadline. Yet they meet over 95% of the dates set; only occasionally having to defer the meeting a few days.
In similar vein, for incomplete records work we have a number of clients who guarantee that if they do not produce the accounts within 28 days of the client bringing in the books and records, they will not charge for those accounts. Of course, this comes with some rules. To start with, they review the quality of the books and records and reserve the right to exclude them from the scheme if the books are not up to standard or incomplete. Secondly, the client agrees that when they meet to finalise the accounts within the 28 days, the client will pay for those accounts at the end of the meeting. Their lock-up (work in progress and debtors at selling price) is therefore less than 28 days for accounts preparation work.
If 28 days sounds unrealistic for your firm could you adapt the idea? You could agree individual deadlines with each client. If you offer a guarantee it need not be 100%. Instead you might offer a 10% discount if you are up to one week late; and a 20% discount for two weeks late; 30% up to three weeks late; and so on. It’s the concept that’s important – keeping everything tight.
If you succeed in keeping everything tight then client care improves, WIP plummets and recoveries go up. As I asked in the opening article on efficiency: “Why wouldn’t you do this?”
Mike Sturgess
SWAT UK Limited