Your first step to improving efficiency

1. Reduce Job Pick Up/Put Down by Implementing a Client Data Gathering System

Any business is a collection of inputs, processes and outputs. An accounting firm is no exception. Individual client jobs or assignments are obviously the most common processes in an accounting firm. For each job there are inputs like client records and accounting data, and there are processes to transform those inputs into higher value outputs such as tax returns, financial statements and regulatory authority lodgement correspondence on behalf of clients.

The efficiency of your internal processes clearly has a major bearing on your firm’s performance and profitability. In our extensive experience in studying and working with many hundreds of accounting firms around Australia, we have observed that one of the major efficiency killers in accounting firms is what is commonly referred to as job pick up/put down.

Job pick up/put down is where jobs are commenced but then need to be put on hold while the preparer waits on more information from the client. For example, the preparer starts working on a client’s tax return and then realises part-way into the job that the client has failed to provide an important piece of documentation such as a purchase contract, lease agreement or bank statement. The preparer puts the job down, contacts the client (which in itself can result in a series of ‘telephone tag’ phone messages or emails), requests the information from the client and then picks up another job while they wait for the additional documentation to arrive. When the information finally does arrive from the client, the preparer can recommence the job after a period of re-familiarising themselves with the job before making progress again.

This is disruptive to the preparer, drastically affecting his or her efficiency and therefore that of the firm. The wasted time due to job pick up/put down is—because it doesn’t actually add value to the outputs of the process—often difficult to recover. In other words, it often results in write-offs.

While that’s detrimental to the firm, job pick up/put down also affects clients because it blows out job turnaround times. Interestingly, job turnaround times not only increase for the clients whose incomplete documentation led to the job pick up/put down, but they also increase for other clients.

Let’s look at why.

One of the fundamental tenets of effective project management is that it is preferable to have fewer current projects in progress and finish them sooner rather than have more projects in progress that all take longer to complete as a result. It’s common sense when you think about it, yet the job pick up/put down syndrome is almost pandemic in accounting firms.

Here’s what happens when an accountant has too many projects (or jobs) in progress:

Job pick up/put down is a type of interruption. There are many other types of interruptions that a preparer might be subjected to in the course of completing a client assignment, but job pick up/put down is, in our experience, one of the two most costly types of interruption occurring on a daily basis in many accounting firms.

JoAnne Growney in her paper for the Institute of Management Sciences entitled Planning for Interruptions: The Science of Managing Their Effect[1] says of interruptions, “their effect can be much more devastating than intuition alone would allow us to conjecture”. Jonathan Spira in his article The high cost of interruptions[2], in an article in KM World, asserts that “unnecessary interruptions consume about 28 percent of the knowledge worker’s day”.

How much is 28% of your payroll?

Whose fault is job pick up/put down? Is it your clients’ fault? It may seem so, but believing that removes your power to influence and remedy the situation.

We suggest that your firm—and that means YOU, as a manager of the firm—
claims responsibility for job pick up/put down.

So if it’s your fault, what can you do about it?

The answer is to implement a Client Data Gathering System that involves the following:

1. Setting client expectations for ‘this is the way we do it here’ for client data gathering:

– Explaining to clients the firm’s policy for requiring completeness of client documentation prior to commencing jobs (so it won’t come as a shock to them later)

– Educating clients regarding the benefits to them of this system and approach – Selling them on ‘What’s in it for me?’ from their perspective

– Explaining to clients the firm’s minimum quality and completeness standards for accepting client records and accounting data

Some firms require their small business clients to use a professional bookkeeping service approved by the firm to ensure that the accounting data provided is of an acceptable quality, while other firms promote the use of automated cashbook systems such as BankLink^® which imports data directly from the client’s bank statements.

– Educating clients up front that if their records and accounting data are not up to the agreed completeness standards the job will cost them more money, therefore making sure that any extra costs are passed onto the client and not borne by the firm in written off time.

2. Have your support staff run the client data gathering system by giving them:

– Documented procedures listing out each step involved in the process

– Training in how to run the system

– Standard questionnaires to send clients before commencing jobs

– Standard checklists for the support staff to check completeness of client documentation when it arrives

– Passing jobs to professional staff after all client data is received

3. Leadership from management to ensure the system and the policies are adhered to

Such a system eliminates job pick up/put down for professional staff because the client data gathering process is entirely managed by support or paraprofessional staff. Your support staff will still need to chase some clients to ensure they have sent in all their information, but the amount of time spent doing this will reduce dramatically, and none of it will be your professional staff members’ time.

Why is this approach so efficient?

An underlying reason is the principle of division of labour. Division of labour is the difference between cottage industry production where each step of the manufacturing process is performed by the one person—‘the artisan’—compared with the production line approach where a series of people each have specialised roles to perform and are skilled, trained, and paid accordingly—‘the factory’. This division of labour principle underpins the entire industrial revolution and in many cases it can be applied equally to service-based businesses.

Consider this example: When you go to a small local mechanic to have your car serviced, it’s common that the owner of the business is also the mechanic and is also the person who greets you when you bring your car in. Compare that with what happens when you take your car to a major motor vehicle dealer’s servicing department. You are not met by a mechanic. You are met by a customer service specialist who ensures your car is parked in the right place, your details are correctly recorded, any issues with the car are noted, the servicing is scheduled, and your expectations for pick up time are set appropriately. These operations are far more efficient than the smaller operators who do not achieve the division of labour and production line approach.

It’s likely that your professional services firm is no different from the above scenario for the vast majority of assignments. Division of labour, specialisation and a production line mindset can be effectively and profitably applied. Like the highly productive mechanics who can finish one job and then move immediately to the next job, your professional staff—once an effective client data gathering system is implemented—can be in a similar position. Productivity levels will soar.’

To read more articles and whitepapers like this, head to the Free Resources tab on our Services page.

[1]           Planning For Interruptions: The Science Of Managing Their Effect, JoAnne S. Growney, The Institute of Management Sciences, Vol. 11, No. 1, February 1981.

[2]                   The High Cost of Interruptions, Jonathan B. Spira – Posted Sep 1, 2005 http://www.kmworld.com/Articles/ReadArticle.aspx?ArticleID=14543