The Importance of Workflow Planning and Management for CPAs and Accountants

Maintaining productivity is one the primary goals of most accounting firms. This usually requires some form of workflow planning and management. In my experience, needs may vary greatly depending on the type and size of the firm.

Workflow planning and management as discussed and defined in current accounting publications is broad and somewhat ambiguous. For example, the process could consist of expense receipts processed and reimbursed to staff. Or it could refer to the stages required in running an audit. For our purposes here, workflow refers to the sequence of steps necessary to accomplish any given process or task. Workflow products usually contain a software component dedicated to due date monitoring and/or deadline management.

Due Date Monitoring and the Small Firm

Starting out, an accounting practice requires clientele. Clients must be courted and convinced that your services will help them. At this stage of growth, work is promptly performed on a schedule convenient for the client. Workflow planning increases in importance when a number of staff are involved in more complex tasks. For example, more complex tax returns or audits have sub-tasks that are interdependent with have different due dates. Different individuals may be assigned to different steps which when grouped together complete the main task. For example, John gathers the information, Joan prepares and Jay reviews. In many cases, the completion of the main task simulates a relay race.

Small one and two person firms grossing under $500,000 a year usually have a good intuitive idea of their capacity and how busy they will be during various peak and downtime periods. The tax season may require working on weekends, but generally the biggest question is when to hire new staff. Workflow and staff utilization planning at this level usually involves due date monitoring software.

Penalties and Lost Clients

At a minimum, due date software should track the person responsible for the task including the start and due date. Typically, reports filtered by the staff show which items are incomplete, including due dates. Many firms use a Microsoft Excel spreadsheet to accomplish this task. However, a standardized relational database is less prone to error, more comprehensible and accessible by other members of the firm. A common complaint heard from accountants looking for due date software concerns penalties from missed deadlines. Typically, this is the consequence of tasks not properly carried forward to the next year’s spreadsheet.

Workflow Planning and Management – Staff Utilization

Once a firm moves beyond simple deadline management or grows beyond minimal staffing, detail tracking of workflow becomes necessary to effectively measure staff utilization. For example, if your firm has more than 500 clients and performs audits or reviews, year-end as well as tax and monthly services, the questions around staff utilization become more difficult to assess.

Questions asked frequently include:

  • Are work requirements well matched to existing staff?
  • Are skill sets missing?
  • Will the staff with the right skill levels be available for the work when scheduled?
  • Are particular staff under or over utilized?
  • Do we need to hire staff to accommodate clients needs?

The effective use of staff at this level generally requires scheduling the work ahead and matching available staff hours with the work requirements and staff skill levels. This involves planning the sequence and timing of steps necessary to accomplish a task or group of tasks or engagements over specific periods: usually months, quarters or years.

Effective workflow management may involve separating a main task into one or more specific sub-tasks. Sub-task characteristics include a staff assignment, time requirement, start and due date. Dependent or hierarchical sub-tasks ensure that step two proceeds only after completion of step one. On the other hand, concurrent sub-tasks do not depend on the completion of a previous step and are useful for audits.

Staff Utilization Graph

Good reporting will inform you of who is busy doing particular tasks. More importantly, staff utilization software should quickly reveal potential logjams related to future responsibilities when compared to staff availability.

The preceding graph shows budgeted hours for the tax season for two staff: Fritz Landon and Jay Pernell. Jay is underutilized during part of the tax season, and Fritz is over-scheduled for the week of April 15th.

Advanced Detail Task Reporting with Budget Data

The following report example shows the detail sub-tasks associated with each main task along with a budget to actual hours comparison for corporate tax returns.

Workflow Planning and Management – Deadline Notifications

As previously noted, matching available staff hours to client responsibilities is an important part of workflow planning. Workflow management also ensures that staff complete assigned tasks on a timely basis.  In many cases, one staff’s work depends upon the completion of preceding sub-tasks performed by different staff. Effective firm management requires some ingrained mechanism to notify staff of upcoming tasks and deadlines. Usually, the workflow management software should automatically open a notifications screen that displays staff responsibilities. When staff are working outside the office, an option to email information upcoming tasks is a useful alternative. The following example from ImagineTime software displays a typical staff notifications screen:

The End Result

Implement workflow planning and management with integrated time and billing software and discover how closely time records track with projected budgets.  With that information, you have the means for determining whether your planning approach is efficient and effective. Minimize penalties and improve client retention by regularly notifying staff about upcoming responsibilities and deadlines.

Author: Carl Coe, CEO