14 November, 2016
There has been a lot of press recently about value billing and the possibility of doing away with timesheets. Ron Baker has been leading the charge on this point for decades and there are a number of firms that have switched over to the value billing approach — which I concur is a better way of pricing than the billing-rate-times-hours system.
But I am not sure it follows that timesheets are no longer useful.
The obvious advantages of timesheets are that you can measure realization and profitability and chargeability. You can answer the question, “We bid this engagement at $50,000. How did we do?” This will inform value pricing discussions for the next round — or possibly some staff training!
Timesheets are also useful to track internal engagements such as the increasingly vital CRM and marketing functions. Timesheets are often the basis of payroll and are used to track PTO. All very useful to the administration of the accounting firm.
But as the technology has evolved, a new possibility for timesheets has emerged: using timesheet information to manage your staff better on a daily basis. This becomes possible when timesheets are centralized and browser-based so that time is more readily entered and gathered.
Among our client firms we have partners managing staff or complex engagements that receive a report of staff timesheet activity via email every evening at 7pm — or the next morning at 8. Usually all it takes is a quick review to make sure the people are on track and conversely, to spot an employee who is going down a rabbit hole or is entering an area outside the scope of the engagement. These forward looking partners are really leveraging their staff asset.
And staff become more careful with their timesheets when they know someone is actually looking at them!
Peter Coburn is the CEO and founder of Commercial Logic, the practice management people. He can be reached at email@example.com.