Last Fall I posted on the benefits of using Client Service Agreeents (CSAs).  One of the truly great benefits to your firm is obtaining concurrence with your client on a schedule of payments in advance of doing the work.  It is a practice management tool that is increasingly more important in our current economic environment.  But here’s the best part!

Recently members of our management team were reviewing software options for project management.  During a web presentation by our British friend and Verasage Senior Fellow, Paul Kennedy of O’Byrne and Kennedy of their software designed primarily for ‘pricing firms’  we were discussing CSAs.  Our document template is very similar to his, with one glaring exception.  Paul includes an automatic bank wiring authorization form.

By signing it the client instructs their bank to wire the agreed upon amounts on the agreed upon dates in advance or concurrently with the work being completed.  Simple, effective and brilliant.  While this works best for those of us who ‘price’, it has definite possibilities for you time sheet junkies as well.

I’ve posted frequently about the deleterious effect I believe time sheets have on professional knowledge workers and professional knowledge firms. Regardless of the origin, or the use for which they were originally intended they have become at once a measurement of productivity, value, worth and efficiency. And I don’t believe they do any of those things particularly well. Granted they can generate useful and important information for reactive decision making but the costs of that information to the culture of the user far outweigh any marginal benefit derived. They are a very efficient tool for micromanaging. There are other very efficient micromanagement tools as well. There are performance evaluations - which we’ve previously posted about. How about ‘checklists’? Read more…

“Twas brillig and the slithey toves did gyre and gimble in the wabe,  all mimsy were the borogoves, and the mome raths outgrabe.”

Written by Lewis Carroll, his poem “Jabberwocky’ in “Through the Looking Glass and What Alice Found There” is considered the most famous nonsensical poem in the English language.  It was certainly one of my favorites during my alcoholiclly impaired college years in the 1960’s.  It re-occurred to me today as I read a post by Ric Payne on the Principa blog titled Time Based Billing is Unethical – What Rubbish.  Read more…

Earlier this week David Maister posted Satisfaction Guaranteed on his website.  You can read it for yourself, but the essence is committing to a service and performance guarantee for the services you provide.  Several years ago we began including this language in our client service agreements:

“Our work is guaranteed to the satisfaction of the customer.  If you are not completely satisfied with the services performed by Mark Bailey and Company, Ltd., we will, at the option of the Company, refund the price or accept a portion of said price that reflects the Company’s level of satisfaction.” Read more…

Recently I was asked by a former tax partner of an international firm how we measured the productivity of our associates given that we no longer keep time sheets. Ignoring for the moment that Peter Block has already answered that question in his book The Answer to How is Yes, I have more than one issue with this question. Read more…

In a post by Rita Keller on CPA Management she advocates the practice of publishing rankings of the firms associates. It would seem this is a practice of Moss Adams, a large national firm. The post titled Ranking Your Individual Team Members doesn’t provide specifics as to what the criteria that were used in the ranking scheme by Moss Adams. They state that you should rank people by the criteria that are important to your firm. The article goes on to state that the staff felt it was a positive motivator and “no one quit”. (Yet!) Read more…

In virtually every survey of accounting firm managing partners and human resource directors they rate the difficulty in finding and retaining professional staff as their number one challenge. Yet the work environment in most professional accounting firms is the same ’sweat shop’ it was 50 years ago when there was an unlimited labor pool. Read more…

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.

Read more…