Life is tough on the front line of accountancy. For more than five years, our intrepid correspondent has been bringing us news and views from a typical West Country practice.
Time gentlemen please!
- and ladies, of course - but mainly the gents as I suspect there weren't any females in the profession when time-based billing was invented.
I'm sat crawling through the 31 March 2012 work in progress report trying to spot work that needs to be billed and wondering why we bother. Virtually no work is billed purely on a time basis these days. Regular bookkeeping, VAT and PAYE are billed on scale rates or as agreed with the clients. Most compliance work, and certainly all new work, is taken on against a fixed fee agreement.
Even where we customarily work on a time basis, you can be sure that this year's fee will be last year's plus a percentage for inflation. When was the last time anyone said to a client: "We had a new chap on your job this year, it took him twice as long as the previous person, so the fee will be twice as much this year"?
Please note, this is not a philosophical point, I'm not trying to argue the ethics of time versus value billing, I'm simply describing how it works in practice.
But of course most of us are trying to reconcile this way of working with so-called 'practice management' software that is nothing more than an old-fashioned time and fees system, but in Microsoft Windows. SQL even. With meaningless colour charts and KPIs that no-one understands or uses. And very little in common with the accounts and tax systems with which it is allegedly "integrated". But I digress.
So my time records tell me what my team has been working on, and if the hours times charge rates produce a high enough figure it prompts me to ask whether we have forgotten to bill something. In most cases the bill goes out with the draft accounts or tax return, but in the case of longer term engagements I like to issue on account bills as we go. Of course, I prefer to bill in advance and collect payment by direct debit, which we do with a lot of fixed fee work, but even in those cases I need a backstop system to ensure that we identify and bill any 'extras'.
So, like most of you, I'm stuck for the moment with the WIP list to achieve that. But in my wildest dreams I live in a timesheet-free environment where work still gets done, billed and paid for - but more efficiently.
Now, let's have a look at those recovery rates ...