31 Jul Measuring what Matters
Many bookkeepers and accountants who have come to the realisation that they don’t sell time still are unsure of what they should be measuring.
Some still believe they need the timesheet so they can get the data to run their business. They fear that if they don’t have this information from the timesheet they will be flying blind.
But getting rid of the billable hour and the timesheet provides the perfect opportunity to start measuring what really matters.
Tracking actual workload instead of the time of staff is logical but ingrained habits created by the timesheet keep bookkeepers and accountings locked in ineffective ways of measuring their success.
Bookkeepers can’t claim to be “focused on the client” if the only thing they pay attention to is their costs and revenues.
There are a number of measures that would make more sense to track (it is not a complete list)
- Year over year profit growth
- Number of clients with 25%+ profit growth
- Average turnaround time by category
- Velocity of teams
- Number of projects completed by deadline
- Revenue per employee
- Revenue divided by workload
- Profit per employee
- Percent of work that repriced due to scope change
- Income derived from scope change
- Client compliments and complaints
- Number of errors and omissions
(This list is not meant to be a complete list and some will not be appropriate for your firm)
Now importantly one additional metric that you should be looking at is customer success. At the end of the day what really matters is that the life and business of your customer have improved.
Stop measuring time and start measuring what matters.