How to Use Tech to Increase Your Firm’s Efficiency

“Touch it once” is a key principle in efficiency. It boils down to the idea of essentially handling things as they come across your desk. When I learned this principle, it was reinforced by a client who said, “The only way you can touch something once is to put it in the right place the first time.”

This client who said this was wildly successful in their industry and has continued to thrive with this principle as a driving force behind their business. As mentioned in the recent article about technology and public accounting, when I came across this principle, I became obsessed with implementing it in my own practice. In trying to figure out how best to do so, I was met with opposition over and over. Fortunately, I can confidently say now that this principle is not hard to follow. In fact, for my firm, it’s part of our day-to-day workflow. It took some time, but I believe that all firms can achieve this level of efficiency and that the public accounting industry can gain a “touch it once” workflow that is effective.

How We Simplified

One of the daily headaches a CPA endures is the variety of accounting software clients can have. These products have different versions and updates, they can be cloud or desktop based, and they might be hosted on a central server or just at a client’s office. This variety is one of the main reasons why, according to Thomson Reuters, we spend so much time gathering data. This was the first thing I sought to attack at my firm.

That same client who instilled the “touch it once” value was the client for whom I developed the software my firm utilizes now for efficiency. What was key about this client was that getting their information was simplified for us. This client had 50 different locations across the US, and all locations had different accounting needs. But, they didn’t have 50 different accounting packages in 50 different locations. Instead it was all the same, in the same place.

To start, I required all my clients, where possible, to be on the same accounting software. There were of course circumstances that prohibited this, but putting over 95 percent of my clients on the same accounting software in the same location made accessing that data much simpler. I recommend all accountants begin with this step.

How We Standardized

Now, simplifying may not resonate very much with you because in terms of “accounting packages,” we all know what most of our clients are using. With an 80 percent market share in the US, it’s not a stretch to say that many CPA firms work in QuickBooks exclusively already. This is where standardization becomes key. 

We standardized the way we got the info from clients. Instead of being reliant on the client sending us their own customized chart of accounts, we set up a standard chart for all our clients to operate on. So we were not only getting the accounting info from the same software, in the same location, but we were getting it in one standard format. For CPAs, a client’s accounting data is our raw material – what we need to produce tax returns, financial statements and whatever other services we need.

Simplifying and standardizing the gathering and formatting of client accounting data ensure that we are delivering consistent results. A production company that has no control over their raw material is destined to fail, so it’s no wonder CPAs are struggling when we have so little control over our raw materials. After implementing these policies for our clients, my firm’s efficiency began to improve, and in 2019, we achieved our best rates yet. But it wasn’t until we learned the power of automation that we were able to fully leverage “touch it once.”

How We Automated

Why is busy season so busy? We’ve asked more than 1,000 CPAs that question, and we’ve gotten many different responses. Overall, though, they fit into 5 main categories: inconsistent formats, trouble accessing the file, redundancy, client issues, and time compression of the calendar. 

Central to all those issues, though, was the idea that a CPA is dependent on working off a client’s static balance. I found this hard to believe. After all, the balance is so essential, isn’t it? However, as I kept working, I realized I wasn’t getting my information from clients’ balances, but their transactions. Yes, we need the balances for tax returns, but the balance is the end product. Our raw material was actually a draft of the product we are trying to produce. CPAs then spend their time deconstructing it and reconstructing it for the tax returns.

When you think about it, a balance, especially a trial balance, is neither simple nor standard. It’s a customizable tool that each client can have a different way of formatting. And many clients actually don’t know how to properly put one together, so they are customized and wrong. The trial balance adds extra steps you must do to get the information you need and disrupts the nonexistent standards of the industry because different software works differently, wants different things, etc.

My firm doesn’t work from balances anymore. Now, we work from transactions. And, better still, we have automated how we gather them. We don’t manually key in every transaction for all our clients, either. We have automated the gathering of our true raw material, which is simple, standard and formatted almost identically across all accounting packages. 

It’s an interesting thing about efficiency: If you are efficient with the wrong thing, then you are still just wasting time. When our firm started being efficient with the right things, our productivity took off. In 2019, I had my most productive year and an 85-90 percent realization rate to go along with it, which is what many firms strive for. At the time of writing, our firm is experiencing a realization of over 300 percent because we are being effectively efficient.

Don’t Take No for an Answer

Public accounting has a technology, efficiency, and automation problem. And what the last 30 years has showed me is that we are consistently trying to be efficient with, and automate, the wrong thing. The only way I learned this lesson was not taking “no” for an answer. When I encountered solution providers who met my desires with “Well, we can’t do that,” then they weren’t providing a solution. I sought out ways within my firm to solve my problems and began to partner with my clients and solution providers to make a better solution for my firm. Now I am passionate about not only helping my firm, but other firms as well.

We have to be willing to push back and demand better solutions, and now is the time to take advantage of it. The industry is rapidly advancing with new technology, and solution providers are quickly updating and modernizing solutions. The time to make our voices heard is now. The time to change our broken, balance-based workflow is now. It’s time for us to take advantage of technology and be efficient and effective with our work.