Trashing the timesheet - Ron Baker replies

I appreciate Ron coming back on this subject. And I still think he's barking too hard up his tree.

I'm quite convinced about value pricing. Believe me. I do a lot of it.

And I agree with Ron that statistics based on 65-70% untilisation rates of labour are pretty useless, which is why my two firms have both expected (and got) well over 90% rates - which has a positive impact on profit.

Does it matter whether the rate is priced? No. I stress, time sheet recording is not, whatever Ron says, price recording. It's hours recording. That's all my system does. What I want to know is that the scarcest resource I have available - my time or staff time, is managed to best effect. Which means I want to ensure I know where it's wasted, whether for a client or not, and that when it's used for a client the ones who are likely to appreciate its value most get it.

So as a KPI I'd say the allocation of 100% of your time to use is the best KPI you've got - because value can't actually be measured by you - because it's for of the customer to determine. And as such whilst I agree that value pricing breaks the treadmill of time sheet slavery - never ever abandon the timesheet if you want to have some control over your costs. Because costs aren't fixed for long.

Which is a fact I can confirm . Because I kept a time sheet in my old firm I knew that I wasn't able to give enough time (my most valuable resource) to find out what my clients wanted from me in terms of value. That was because my time sheet told me I was spending too much of my time reviewing staff work which the regulaltory and quality environment of current accounting required me to do. But I knew I could add more value to the top line of my old firm than anyone. The answer was obvious. I sold the firm. I eliminated almost all the costs, and I make more now because I have more time to add value, even if not sold by the hour.

So costs aren't fixed. That's just another illusion. Time is. So manage it well, with a timesheet. Which is why, even as a sole practitioner, I do 100% time allocation of time at work. It pays by improving decision making on the allocation of resources. There's no other reason to do it.

I can only agree wholeheartedly with Ron Baker, timesheets do measure something but is it really worth it. Time management is important but practically nobody else uses timesheets for time management.

How much is gained from timesheet reports compared with the loss of time (and morale) taken up with doing them in the first place? Are they that accurate?

Ultimately a member of staff who makes a client £1m in profit with one hours work and charges them £50,000 can do what he likes the rest of the week as far as I'm concerned.

I would also like to know what KPI's Ron recommends measuring - or will this be the subject of his next groundbreaking book?

Ron mentions KPIs a number of times. What do readers feel are the key KPIs for an accountancy practice?