Must try harder - again

Over budget – again. Same story since I came into the profession in 1979: managers go to great lengths to set fee budgets for accounts and audit jobs, and junior staff completely ignore them and complete the job in their own sweet time!   Yes, it's billing time again, and there are the usual gains and losses in the January bills. Plenty of tax returns to be billed, we made a good start in the first half of the month but as the pace picked up in the latter part of January we focused on getting the Returns filed and had to leave the billing until now.   With very large jobs there is usually a bit of slack in the budget to allow for some over-run, but a smaller firm with smaller jobs doesn't have this luxury - and neither does it have the management time to constantly monitor the progress of numerous jobs that might take a day at most. Unfortunately when they take two days instead of one you're suddenly 100% over budget! Is it a management or a training issue – or both? Probably both on our case, and something to which we need to pay more attention in future. Under-recoveries mean poor staff utilisation, a real opportunity cost that we should be able to something about.   Of course, a lot of the problems with the work in progress on January jobs has been the wrong people doing the work – under pressure we have had on occasions to throw anyone and everyone at the tax workload, which means senior staff doing work that is only billable at half their normal charge rate. I know that sometimes an experienced person can do a job in half the time, but on smaller jobs there just isn't the scope for much of a saving.  

The answer, as if we didn't already know, is to get a smoother flow of tax return work over the year so that we can make more effective use of our people. And that means educating clients as much as it means encouraging our team to work smarter in future. I think the report card for managers this year reads: “Must try harder (on practice management disciplines) in 2010.”