We do not believe the ‘benefits’ of a system based on time sheets justify the ‘costs’.
So how much does a system based on time sheets and the billable hour cost?
-Did the amount of time you spent at an arbitrarily guesstimated rate reflect the value of the service (even after you wrote it up) that would have been agreed upon with the client at the beginning of the engagement? We both know the answer. That’s a cost.
-Trying to collect a surprise invoice the client NOW doesn’t agree to or see the value in? That’s a cost.
-The ‘time’ spent in calling on accounts receivable? That’s a cost.
-The delay between when you sent the surprise invoice and when they paid it? That’s a cost.
-The impact on the relationship a surprise invoice has with your clients. (You’d hate it if you were on the other end). That’s a significant cost.
-The amount of ‘time’ it takes for you and your staff to record your time if you record time. That’s a cost.
-Communicating to your staff by micromanaging their time, that you don’t trust them to make conscientious effort or fulfill the contract they have with you to be professionally responsible in taking care of your clients. You tell me.
-In a comment to my first post on Why I Hate Timesheets, Shane pointed out the negative impact of using time sheets as a micromanagement tool for productivity and competency. I’ve had multiple discussions in employment interviews with professionals (at all levels) looking to leave their ‘jobs’ with national accounting firms. It’s a common theme. What is the cost of turnover? It also reflects a ‘cost’ of supporting a management system that relies on time sheets.
There is a place for tracking time. No doubt there is some value, but we don’t think the way we’ve been doing it as a profession, or more importantly what we’ve been using that information for is appropriate. Most importantly the cost far outweighs the benefit derived. We’ve outlined some of the costs, and can name many more. Can you give us some ‘benefits’?
The benefit of using timesheets is that less effort and thinking is required in billing and practice management (the timesheets bill your clients and manage your staff).
I think the public accounting firm has to realize that the majority of their investment is in improving the knowledge stored in the minds of their professionals. They should highly regard this investment, as rebuilding this knowledge base frequently is costly.
When your main investment is in the mind of a person, you hate to see your investments walk out the door after two or three years (as soon as they have a certificate and they can sell their knowledge and certification to someone else). This is the cause of mass exodous.
Young professinals would rather sell their knowledge and certification in the private sector than sell their time in the public sector.
Comment by Shane — February 8, 2008 @ 8:06 am
I am a young “millennial” who’s been out of college for a year and working in public accounting for a little under 6 months.
Honestly, I believe that the timesheet culture is a hindrance to professional development. When a partner or manager comes up with a project, there is usually a budgeted time based off of previous year’s work. That new staff person is under pressure to get the job done based on how long it “should take” vs. taking the time to learn how to get the job done right the first time.
In addition, part of that person’s “bonus” (I would argue that it’s compensation held back) may be tied to the amount of billable output. For a professional in their infancy, it may discourage them from taking CPE, prolong getting their Masters degree or delaying other professional development in order to meet their billable hours goal.
I also want to echo what I think is common consensus here that it’s quality of the work, not quantity that should be emphasized. The first few years of a professional are critical and should be spent learning, not just how to get the job done in the least amount of time.
Comment by Jesse — April 25, 2008 @ 7:18 am