A Maximit survey uncovers some worrying statistics.
Our survey of small practice partners revealed that only 18% of partners billed in excess of 30 hours a week. So what can we conclude from this figure? I must admit it surprised me as being somewhat on the low side given that the thing accountants sell is their knowledge and skills on a time basis.
On the reasonable assumption that partners are working around 40 hours a week why is so much time going unbilled and what does it signify? If accountants were flogging tins of beans surely they wouldn’t be giving away 25% of their stock pro bono?
From my personal experience of accountancy practice “back in the day” and from talking on a near daily basis to those still at the coal face there is still an ever present nervousness about the size of the bill and fear of alienating and ultimately losing the client.
Some accountants have the confidence to present a bill and explain that the client is getting a tremendous service at a very keen price, all part of the “value added” school of accountancy or as it was formerly described in a slightly more crude and direct but nonetheless valid manner – “I have saved you a wedge in tax so my fee is reasonable” – although clients may often struggle to see how and where these savings arose. Too many others regrettably are somewhat meek and unable to present their case and simply write off time. Criminal isn’t it ?
Talking of which, why is it that our professional cousins in the legal profession seem to have no issue with presenting hefty bills for services that often achieve very little for the client ? Is it one of life’s many mysteries or can we narrow the gap?
My analysis leads me to conclude that for most people the instructing of a solicitor is a one-off experience but the annual or more frequent use of an accountant means that the practitioner always has one eye on next year’s expected recurring fee and is scared to rock the boat. Many legal services rendered are opaque in as much as there is often no set timeframe for a case so the meter simply ticks upwards, unlike preparing a set of accounts or a tax return where the likely time taken can be estimated fairly accurately and will be expected by the client to remain fairly constant especially in a low inflation environment, however much extra work was done in a year.
An equally big worry is whether my opening statistic means that partners are spending time on unproductive administrative matters that could quite easily be managed by somebody else. One practitioner I spoke to recently told me she is in the office at 4.30am and works until late afternoon, doing absolutely everything herself. I know it’s true because every time I ring, guess who answers the phone. A highly profitable operation perhaps but one wonders why she is unable to delegate.
There is also the matter of training and keeping up to date with professional journals and tax changes. Should this be incorporated into the “40hr working week” or should it be extra-curricular, perhaps taking the working week up to 45 hours ? If it is part of the mainstream working day how many accountants look at the training as cost base that needs to be shared across the clients – after all is it not part of the ability to deliver the service and the more expertise gained the better the service, certainly in terms of taxation or business advice ? We’re straying into the territory of management accounting here but I suspect that charge-out rates often have a nebulous basis instead of a formula backed by substance.
Then again, possibly partners are so comfortable with their current earnings that they only work a maximum of 30 hours a week – is accountancy the ultimate lifestyle business?