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.
Practitioner's Diary: What's wrong with timesheets?
Our West Country general practitioner makes an appeal in support of the time honoured timesheet.
* * *
28 October - I'm getting fed up with all this talk of Value Pricing. I thought the profession was built on the bed rock of the Almighty Timesheet. Without it I certainly wouldn't have such a healthy client base.
Over this last week I have taken on several new and substantial clients, all on account of firms devoted to Hourly Billing:
Company 1 - £0.5M turnover, nice tidy accounting system on Sage which is kept by an independent bookkeeper with depreciation, accruals, prepayments, etc. Piece of cake. The previous accountant charged £2,400 for the 2004 accounts, which is a bit steep around here. The only justification he would give was that it took 40 hours at £60 per hour, admittedly the whole accounts seem to have been word processed from scratch, so maybe he doesn't have many company clients. Seems likely as he did also file full accounts with detailed P&L at Companies House! We'll be able to do the accounts at a much lower (fixed!) fee and build up some business development work too which will earn us at least £2,500 pa and give the client much better value for money.
Company 2 - Small group of companies, had been unhappy with previous accountant but didn't like to change - heard that one before. The last time he visited the accountant to sign off the accounts and tax returns he forgot his reading glasses, but the partner's secretary kindly lent him her's, which were a similar strength, so all was well. Except when the bill came it included a separate item charging him for two hours of the secretary's time sicne she had been unable to work without her glasses! Last straw - camel's back - etc.
Company 3 - Previously had a happy relationship with his accountant until the last couple of years when he saw fresh faces every time the audit team turned up (Im surel most readers will be ahead of me already). You're right, of course, the job started to take longer because the audit team weren't familiar with the business (isn't that what permanent files are for, or don't auditors use them these days?), took up more of the client's time, and then resulted in higher bills. And once again, all the accountants would do was justify the bill on the basis of time spent. Result: another new client releived to get a fixed fee quote up front. Again, the real issue was the principle rather than the amount charged, I reckon we'll earn more in future simply by packaging our services differently and offering fixed fees.
So PLEASE don't dump the timesheet. There are firms like ours that rely on it.
* * *
20 October - Stress levels are rising this week, not because of tax returns per se, more because we're all so busy working on tax enquiries, tax planning exercises and accounts jobs that we're not getting any returns done! Strategy meeting planned for tomorrow morning to decide what to do next ...
* * *
14 October - The first job is to identify the laggards, of course! I'm going to adopt Geoff Challinger's strategy I think, start phoning those with a track record of being the last each year. He's right too, we can probably guess who they are without running a computer report, because they're the clients who are always late for everything. I'll bet they're also the ones who haven't paid their 31 July 2005 second payment on account, for example.
So the next job is to get out the tax return submission schedules from the last couple of years and look at the returns filed in January. How many of these still haven't supplied accounting records for the 2004-05 basis period? They'll be the first to get the phone call.
* * *
11 October - Part two of the master plan is going to be dealing with the laggards. My tax assistants are not prepared to work all hours again in January, so their suggestion is either to fire all clients who haven't delivered their records by Christmas, or tell them there will be a £300 to £500 surcharge on our fee for being late (the effect might be the same, of course!).
* * *
10 October - We seem to have the makings of a plan. First, we need a list of what work is outstanding for 2005 Returns. Snag is, it turns out a lot of it has been in the office for some time - we're responsible for the hold up, not the clients!
So plan one is to draw up a serious schedule of jobs in, who's going to do them, and when.
* * *
5 October - As usual we have passed 30 September and a pitifully small number of tax returns are filed. My sole concern now is to ensure that we get everything we possibly can done before Christmas. That way we might have a half decent January.
This year we are definitely NOT working seven says a week and evenings too since experience shows that no-one wants to pay us for the priviledge.
So what we need this month is a cunning plan!
* * *
Last month our West Country diarist tangled with the VAT treatment of bees and alpacas, struggled with delegation in the office and celebrated the start of the new school term!
Featured bloggers
nothing wrong with timesheets, but
there is a lot wrong with how they are used in practice by practices. They tend to cover lots of different objectives, and often become a ritual in their own right, actually resulting in a lot of wasted chargeable time!
if it is simply a case of capturing time worked on specific jobs where the bill is by hour worked then why capture 37.5 hours a week, and use them as a tool to (mis)control chargeable staff?
learn some lessons from the lawyers and the car mechanics!