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Managing your practice's workflow: matrix versus portfolio

13th Nov 2008
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Earlier this year Tax UK offered a prize of £10,000 worth of practice development consultancy to a forward-looking accountancy practice. The winner was SJO Associates, run by Sarah-Jane Sinnott. Sarah-Jane will blog as the consultancy takes shape. In tandem Lesley Stalker of TAX UK will tell you how to adapt Sarah-Jane's experience to your practice. In the second instalment of series, Lesley Stalker of TAX UK examines the practicalities and the benefits of appraising your practice staff.

So far my time spent with Sarah Jane has focused on clarifying her aims and objectives for her business; documenting these in a business plan so that her aims are clearly defined and measurable; and then working with her on strategies that will enable her objectives to be achieved.

This month we looked at the practicalities of servicing the work. It is extremely important to have a robust workflow structure which ensures that client work is undertaken within defined timings, and that a manager or partner can clearly see the stage of the work being undertaken on any given client at any given time (usually in the middle of a telephone conversation with that client!)

We have identified that Sarah Jane is extremely good at marketing and because of this the practice has an excellent opportunity for growth. However the absence of a robust workflow system means there is a very real danger that new clients would be coming into the firm and potentially just exiting out through the back door. IT is ideal for managing this.

As a firm we use IRIS and so it made sense for SJO to adopt the same system and thus benefit from all the non-standard procedures we have developed over the years. Setting up the system properly at the outset takes a considerable investment in time, but as with every IT system it can only ever be as good as the information it’s managing. Once installed, the first steps are to input client details; addresses, tax district information etc – and then to create job stages. It was at the job stage specification stages that we were really able to cut down the time needed to get the system up and running because this detail had already been developed by ourselves – SJO could add to or delete from our systems as they chose. So for instance, when completing a tax return, what are the different stages required to complete the job? And what are the timescales you want to complete the work within? All this information needs to be added into the practice management system to create a series of workflow stages which can act as a prompt to staff and generate reminders for management. After this, the two elements of the system – client details and job stages - need to be linked up to the appropriate jobs. Then at any time you can request status reports to establish how well client projects are progressing. With our help, SJO have been able to cut down a lot of the time required to create the individual job stages and are now probably 80% there.

In addition to managing the completion of client work, using an IT system also enables you to automatically measure performance levels according to specific metrics you may set for staff. These measures may be linked to an overall service level, for example, promising minimum response times for clients, or form part of the appraisals system for staff.

Getting staff to buy into a new practice management system is also a key change management activity that needs to be addressed collectively. In my experience it is always best to work together with your team to evaluate different systems, decide how they are going to be used plus what the different jobs and their respective job stages should be. Approaching the change like this ensures you get their buy-in and of course their ideas from the outset and this means you can confidently delegate client work and focus your attentions to bringing in new business – the reason you engaged a practice development expert in the first place!
As the practice grows further, the issue of developing structured workflows has to be addressed alongside one fundamental point. As a firm do you want to adopt a portfolio or matrix structure? The portfolio approach is most common in smaller practices – each person looks after a set of clients and is the primary point of contact for each of these clients for all service issues. This is very straightforward to implement but it has a number of pitfalls:

  • Staff can become indispensable - what happens if one of your team leaves? Are the clients going to follow because they don’t have any other relationships?
  • Staff have less opportunity to specialise because they must have a broad general knowledge. This can become a retention issue for smaller firms employing capable, ambitious people looking to be challenged.
  • The practice may not be able to offer the higher level of technical services required by clients as their business and their needs grow – this may result in a lower level of service and/ or lost clients.

A more robust structure, and the model I recommend for Sarah Jane as her practice grows further, is to adopt a matrix approach whereby everyone in the firm is given a specific role and responsibility. This model enables smaller firms to offer a higher level of expertise usually only associated with larger, or specialist practices.

So for example, staff specialising in compliance issues can ensure the completion of all compliance work to the necessary timescales and standards, with the aid of admin staff for admin tasks such as engagement documents, reminders, invoicing; other staff members can specialise in enquiry work, company structuring, shares schemes etc.

If historically clients have had one point of contact within the practice, there may be concern that they will not accept a change to having a number of points of contact. It is not however generally an issue if it is explained to them at the outset that their partner contact will oversee all work and conduct the year end meeting, and that in addition they will have contact with specialist members of staff for different technical or admin issues.

Unless staff are given the room to develop and specialise, a smaller practice will not be able to provide the level of knowledge good clients want; it will also not be in a position to maximise profits if highly qualified staff cover all aspects of client requirements from engagement letters, to invoices, via tax return completion and more complex tax advisory issues.

Apart from the obvious benefits of this structure avoiding the pitfalls of clients forming too close a relationship with one person, it also frees the partners to spend more time on business developing activities. As a simple rule of thumb I would expect Sarah Jane for example, to be spending 50% of her working time talking to existing clients about their business issues (which is looking for and securing development opportunities), and undertaking the more complex technical work required; with the remaining 50% split between managing staff and their development – doing appraisals, establishing and promoting proper internal processes; her own development; and new business generating activities – meeting potential clients, PR, events, networking for instance.

We are now at a stage in the development of SJO where there are clear objectives in place and these are known by all members of the team; all members are involved in achieving the financial and client service objectives of the practice and motivation amongst the team members is high.

The next stage will be to implement the appraisal system, linked tightly to the business plan and the performance requirements to meet Sarah-Jane’s aims. This will be key in order to ensure the communication and measurement of team and individual performance, and to continue to build on staff motivation and the retention of key staff members.

To read about Sarah-Jane's side of the story, see her blog here.


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