Even when you run a successful accounting firm, you still have that nagging feeling that you don’t have enough hours in the day. It’s because of a time leak.
Deadlines are slipping, tax season is becoming busy, and MTD is looking more like a threat than an opportunity to work closely with its clients.
Unfortunately, the loss of time is not obvious. It lurks beneath the surface, tripping up the best accountants at the most successful companies.
And since time is money, profits are lower.
Ready to find out how long your business is leaking? Go straight to the calculator.
How Time Wasting Happens in Accounting Firms
Every accounting practice wastes time. It’s not because someone is lazy or doesn’t care enough: you believe in your people and rightly so.
Time leaks occur in the intervals between main tasks. This is the email chain that no one saved. The onboarding admin took twice as long as expected. Customer data was re-entered on three different systems because your software is not syncing.
Every week these things cost money due to wasted time.
This may or may not be a price you are willing to pay. The problem is that the loss of time is not measured, so it is difficult to see if the loss is acceptable.
Why is it so easy for us as accountants to forget about this waste of time? Because it has become a habitual activity.
When you talk to accountants about time entry, you hear the same thing: there is rarely consistency. An employee records every email and phone call. Another no. A partner records a five-minute credit check on a timesheet; someone across the desk erases it without hesitation. There are often no rules clearly defining what counts – and what is legitimately chargeable in one situation may not be in another.
Thus, everything is lost in the noise, and the temporal flight continues. He does it week after week.
Luckily, we have good news for you: we’ve built something to help fix this problem.
Access the IRIS time leak calculator: see where your money is disappearing
The IRIS Time Leak Calculator helps you map the hours lost during each customer’s journey with your business. It shows the cost of leaks to your office.
So how does it work? You start by entering three numbers at the top. This includes the number of employees you have, your average billing rate, and your expected billable hours.
From there, you explore six categories of hands-on activities:
- Integration
- Provision of services
- Accounting
- Compliance
- Advisory
- Reports
Within each category, there are tasks where time disappears. Examples include preparing engagement letters, AML checks, document searching and re-entry of client files. For each of these tasks, there is a slider that allows you to estimate the time lost per paying person per week.
The calculator updates with live numbers: a projected annual cost of your wasted time.
We will warn you that the result could be a shock.
The cost of doing nothing
As we developed our time leak calculator, we made sure to put it through a good test.
We have been conservative in our contributions. Each task was limited to only half an hour of escape per person per week. The price? £150 an hour, which is an average figure across the country – and, conversely, a lower rate in the south.
The result was a waste of time of £766,000 per year.
How to fill out the time leak calculator?
The right mindset is to be brutally honest; don’t overthink your answers.
Nobody judges. Remember that, for the most part, the industry simply does not record this data. What our calculator needs is your best, honest estimate, which you respond to as quickly as possible, without mistaking your gut instinct.
Whatever you put in, prepare yourself for the result.
What to do once you see the number
First: if it’s not good, don’t panic. Panic will not recover a cent of lost time. Instead, think about where you’re going from here.
There are basically three places to land. You might re-examine the number and decide that it is within acceptable limits. It’s completely valid, and at least now you know it.
You might decide that there are one or two categories that need improvement.
Or you might decide it’s time to do something more meaningful about how your practice captures and records time. We can help you.
The most helpful first step, no matter which direction you’re headed, is to follow up with a live recording exercise. Ask one or two employees to record wasted, non-billable time for a week. This is just to help provide data. Compare this week to the original estimate, then see if you need to speak to one of our advisors.
So it’s time to start. Don’t hesitate. Take a deep breath, follow your instincts and see what the time leak calculator can tell you.
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Hours are calculated by category using the employees you assign to each zone. The same person can appear in several categories: this reflects reality. Annual time cost = total team hours lost × 48 work weeks × your billing rate. Some of this time may be in non-billable hours rather than directly replacing billable work.
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