How to Increase the Efficiency of Your Firm

It’s no secret that the accounting industry as a whole is facing a labor shortage of skilled, qualified CPAs and accountants, a knock-on effect from the Great Resignation, and the culmination of decades of a high-stress, work-life imbalance that left many people in the industry burnt out, exhausted, and struggling with mental health challenges.?

Because of this ever-tightening labor crunch , many firms are struggling to attract and hire the staff they need as their businesses grow and they take on new clients.?

As such, a common question firm owners are asking themselves is how can they improve the efficiency of their existing accounting staff in a way that allows the firm to grow, while still protecting their staff from being overworked??

There is a way to do this but it’s first important to understand that increasing efficiency in your firm is an interim solution for allowing organic growth and scaling, not a long-term one - at a certain point, you will hit an efficiency ceiling with your existing resources.?

That’s why it’s essential to combine efficiency enhancement with strategic hiring processes to truly facilitate long-term firm growth. That being said, there are a few practical steps you can take now to improve your firm productivity and efficiency while searching for the talent your practice needs.?

Defining What Efficiency Looks Like For You

We all know that efficiency refers to the ability to achieve a goal or target with minimal wastage of time, resources, and manpower. However, while we have a clear idea of what efficiency means, you first need to define what it means to your firm. The efficiency challenges you're facing within your firm won’t necessarily look the same compared to what other firms are facing.

Picturing your firm operating at maximum efficiency requires you to identify the broken leg first. You need to examine each area of your firm and pinpoint where the cracks are forming.?

This may take more time than you initially expect - often, when searching for high-level obstacles, we end up discovering more serious issues that run deeper below the surface.?

Take the time necessary to identify everything that’s working and not working in your firm, then plan what needs to be most urgently addressed to overcome existing efficiency bottlenecks. Of course, this process shouldn’t (and, realistically, can’t) happen without input from other people. In the next section, I’ll go into how you can involve your staff in your efforts to win more efficiency gains.?

How to Increase the Efficiency of Your Firm

What underpins efficiency is good planning. The key to improving efficiency in your firm is tied to effective capacity planning and management. When done correctly, capacity planning and management should feed into each other, informing one another and highlighting potential red flags and problems before they snowball into real challenges that hinder efficiency.?

Talk to your team

The first step to improving efficiency is to engage with your employees. Talk to them about their existing workloads and deliverable outputs,? as well as the tools and processes they use to complete their tasks. Invite them to be candid about their experiences and about what’s making it harder for them to complete their work.?

If they feel overwhelmed or unequipped to manage their workload, efficiency drops could be manifesting at the end of the line and may leave them feeling burnt out, demotivated, or frustrated . Good communication is vital to establishing the processes for capacity planning and management that will drive better efficiency.??

Identify what’s working and not working

Your employees will likely have plenty of feedback regarding what can be improved in your firm’s workflow processes, being the ones with the most firsthand experience with it. Compile a list of which systems and processes are working well and which ones are not.?

Perhaps it’s related to unrealistic or high-pressure timelines, staff having too many tasks to complete at the same time, or employees not having the right tools they need to do their jobs more easily. Identify the biggest roadblocks hindering efficiency and arrange the list from what most urgently needs to be addressed and work your way down.?

Implement better capacity planning and management?

Capacity planning is about forecasting and predicting incoming workloads and the time it takes to complete them, and capacity management is about spreading out this workload over time according to your current team’s resources and capabilities.?

When it comes to planning, there will always be a certain amount of estimation taken that does leave room for error, however, the more you track and monitor projects to completion in the time taken against the time forecasted, the lower this margin should eventually become.

For management, make sure your employees have sufficient hours in the week or month to complete the work they’re given according to your planning. If the incoming work equates to more time than your employees have been allocated, you can identify this as quickly as possible and make adjustments where necessary.?

If you’re constantly running into issues revolving around incoming workload and employee capacity, you have issues with scale, not efficiency, and you need to expand your team.?

Lastly, make sure you’re automating and streamlining smaller, menial tasks wherever possible. If your team is constantly bogged down with processes that eat into their productivity like manually collecting data, and responding to endless client messages and emails, then improving your firm’s efficiency is going to be a constant uphill battle.?

Implement automation tools and software to help your employees get the job done as quickly as possible, allowing them to focus on more engaging, fulfilling work.?

Conclusion?

When it comes to improving efficiency, it’s also vital to be realistic about what your employees can achieve in the timeframe they have with the resources at their disposal. I strongly recommend minimizing overtime requests as much as possible. Make it the exception rather than the norm.?

Remember that improving the efficiency of your firm isn’t necessarily about saddling your team with more work, it’s about empowering them to do the work they have to the best of their abilities.?