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Archives for August 2024

The 40% Solution: Reclaiming Your Time as an Accounting Firm Owner

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As accountants, we’re no strangers to long hours and busy seasons. But what if there was a way to reclaim a significant chunk of your time without sacrificing the quality of your work? 

I recently sat down with Kwame Agyei, founder and CEO of Appoynt, on The Accounting Podcast to discuss just that. Kwame, a former accountant himself, shared his idea of the “bottom 40%” solution, which could offer a new perspective on managing our firms.

Understanding the “Bottom 40%” Concept

The bottom 40% refers to the tasks that, while necessary, don’t directly contribute to your core services or business growth. These might be administrative duties, data entry, basic bookkeeping tasks, or even managing your calendar and inbox. The key is to identify those tasks that:

  1. Take up a significant amount of your time
  2. Don’t require your specific expertise
  3. Feel like they’re “dragging you down” or preventing you from focusing on more important work

By pinpointing these tasks, you’re not just identifying time-wasters – you’re uncovering opportunities to delegate, outsource, and ultimately reclaim your time to focus on what matters most in your firm.

Once you’ve freed up this time, you have two options: take on more work to grow your business or use that time to improve your work-life balance. The choice is yours, but addressing your bottom 40% creates the opportunity to make that choice in the first place.

Common Tasks to Consider Outsourcing

Now that we understand the concept of the bottom 40% let’s explore some specific tasks that many accounting firm owners might consider outsourcing. Outsourcing can often provide significant time savings and efficiency gains in these areas, allowing you to focus on higher-value activities.

Virtual Assistant (VA) Services

A virtual assistant can handle a variety of tasks, including:

  • Email management
  • Calendar scheduling
  • Travel arrangements
  • Basic data entry
  • Document preparation

The beauty of a VA is that their role can be tailored to your specific needs. At about $1,000 per month for 20 hours a week, it’s a cost-effective solution for many small firms.

Accounts Receivable Management

With the right service, you can automate the process of chasing invoices, using customized workflows based on your preferences. This could include sending reminder emails, making phone calls, or even adjusting the approach based on your relationship with each client.

The potential impact is significant. For example, Kwame says that one firm increased its collection effectiveness from 63% to 78% and reduced its Days Sales Outstanding (DSO) from 23 days to just 12 days. This not only improved cash flow but also enhanced client relationships by ensuring consistent and professional follow-up on outstanding invoices.

Overcoming Hesitations About Outsourcing

Outsourcing can feel like a big leap, especially for accounting firm owners used to handling everything in-house. However, many of the common concerns about outsourcing can be addressed with proper planning and due diligence. Let’s into some of the most frequently cited hesitations and how you can overcome them, according to Kwame.

Security Concerns

As accountants, we deal with sensitive financial information daily. Reputable outsourcing companies address this by using virtual machines with data servers local to the client’s location. This means your data is kept on secure servers in your country, adhering to local data protection laws.

Trust Issues

Building trust with an outsourced team takes time. Start small and gradually increase responsibilities as you build confidence. Communication is key, especially in the early stages. Share your thoughts and concerns freely to help your outsourced team understand your preferences and work style.

The Long-Term Impact of Outsourcing

As you become more comfortable with outsourcing, you’ll likely find more tasks you can delegate. What starts as offloading a few simple tasks can snowball into a significant transformation of your workday. You might start by having a VA manage your calendar, then progress to letting them manage your email inbox, and eventually have them draft responses to routine client inquiries.

This evolution allows you to shift your role as a firm owner. Instead of getting bogged down in day-to-day tasks, you can focus more on strategy, client relationships, and business growth. Alternatively, you can use that reclaimed time to improve your work-life balance.

Practical Steps to Get Started

Here’s how you can get started:

  1. Identify Your Bottom 40%: Log your activities for a week. What tasks are eating up your time but don’t require your specific expertise?
  2. Start Small: Begin with something simple like having a VA manage your calendar or upload expense receipts.
  3. Choose a Reputable Provider: Look for an outsourcing company that understands the unique needs of accounting firms and has robust security measures.
  4. Communicate Clearly: Over-communicate early to help your outsourced team understand your preferences and work style.
  5. Be Patient: Give the process time to work. Significant improvements often become apparent after about three months.
  6. Gradually Increase Responsibilities: As you become more comfortable, start delegating more tasks.
  7. Monitor and Adjust: Regularly review the performance of your outsourced tasks and make adjustments as needed.

The 40% solution isn’t a magic bullet. But it is a powerful tool that can help transform your accounting practice. By identifying and outsourcing the tasks that are dragging you down, you can free up time to focus on what matters – whether that’s growing your business, improving your services, or simply enjoying a better work-life balance.

So, take a hard look at your daily tasks. What’s in your bottom 40%? And more importantly, what could you achieve if you reclaimed that time? The answer might just revolutionize your practice – and your life.

Want to explore this topic further and hear more insights from Kwame Agyei? Listen to the full episode of The Accounting Podcast, where we explore these ideas in greater detail. You’ll gain even more practical tips on implementing the 40% solution in your firm and hear real-world examples of how outsourcing can transform your practice.

How One Accounting Firm Turned Work-from-Home into a Competitive Edge

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At KBS CFO, new hires undergo a 3-day work simulation. Internal emails are banned, and success is evaluated based on the results delivered rather than the hours worked. These are all strategies that help the firm operate effectively while being completely remote. There is no office.

Robin Thieme, founder and CEO, shared her approach to remote work on my Earmark Podcast. As the accounting industry faces ongoing challenges in recruitment and retention, her insights offer a roadmap for firms seeking to build a more agile, efficient, and attractive workplace.

Revolutionizing Hiring with Work Simulations

KBS CFO has developed a unique approach to hiring that goes beyond traditional interviews and resumes. Their process begins with automated screening through platforms like Indeed or ZipRecruiter, followed by a three-day work simulation that gives candidates a real taste of the job while allowing the firm to assess skills that matter in a remote environment.

“We set up a simulation that includes a wide variety of tasks and assignments to be performed over a three-day period of time,” Thieme explains. These tasks range from explaining complex accounting concepts to simulated clients to analyzing financial data and demonstrating proficiency with project management tools.

The simulation is conducted through Asana, the firm’s project management tool, mirroring the work environment. This approach offers several benefits:

  1. Skill assessment: “Every single step of the way, there’s inherent screening going on,” says Thieme. The simulation tests technical knowledge, critical thinking, communication skills, and the ability to work independently in a remote setting.
  2. Self-selection: Some candidates opt out when they see the work involved, saving time and resources for both parties.
  3. Cultural fit: The simulation helps identify candidates who genuinely enjoy the work and thrive in a remote environment.

While the simulation’s 4-6 hour time commitment might seem substantial, Thieme reports that truly interested candidates don’t hesitate to take it on. Many spend even more time on it, demonstrating their enthusiasm and dedication.

Balancing Flexibility and Accountability

KBS CFO has developed an innovative approach that balances employee autonomy and operational needs. The firm’s core hours policy is at the heart of this approach.

“My requirement is that everybody be committed to working at least 60% of their time between 10 and 3, their time,” Thieme explains. This ensures substantial overlap in working hours across different time zones, facilitating collaboration and timely client communication. However, employees can complete 40% of their work outside these core hours if they meet deadlines and deliver results.

Thieme emphasizes that this flexibility comes with clear expectations: “There’s no flexibility in terms of meeting deadlines. If we make a promise to a client, there’s zero flexibility in that because those promises are essential.”

This balanced approach provides structure without sacrificing flexibility, ensures consistent availability for clients and team members, and maintains accountability by focusing on results rather than hours logged.

Streamlining Communication and Workflow Management

At KBS CFO, innovative remote work practices extend to communication and workflow management. Two key strategies stand out: banning internal emails and implementing a Results-Only Work Environment (ROWE).

“We are not permitted to email one another internally,” Thieme states emphatically. “It’s banned. I’m pretty serious about it because it’s such a waste of time.” Instead, all internal communication and task management occur through Asana. Every task is assigned a due date in the system, ensuring proper tracking and clear responsibilities.

This approach offers numerous benefits, including improved clarity and accountability, a searchable history of all work and communications, and better organization of client information. Thieme shares an example: “We had a situation with a client where I was talking to them about some kind of issue. Six months ago, I had been talking to them about the same issue, and I was just able to easily find the conversation. They were pretty impressed.”

Complementing this streamlined communication is KBS CFO’s adoption of a Results-Only Work Environment. “I can observe if due dates are being missed, regardless of whether the client is aware of it or not,” Thieme explains. This focus on outcomes rather than hours worked aligns perfectly with their remote work model, allowing them to measure performance based on results and promote a culture of accountability and ownership.

Implementing these strategies isn’t without challenges. It requires a shift in mindset for both managers and employees. However, the payoff regarding efficiency and accountability is substantial, contributing to operational excellence and enhanced client satisfaction.

The Future of Remote Work in Accounting

By prioritizing results over hours worked and effectively leveraging technology, firms can attract top talent, improve client satisfaction, and boost overall efficiency. However, implementing such changes isn’t without challenges. It requires a shift in mindset, investment in technology, and a willingness to challenge traditional practices.

As Robin Thieme puts it, “We’re accountants, but somehow we don’t translate the numbers game to the way we run our business.” This highlights the importance for accounting firms to use the same level of analytical rigor in managing their operations as they do in handling their clients’ books.

As the accounting profession grapples with talent shortages and increasing client expectations, firms that embrace these innovative practices will likely gain a significant competitive advantage.

Ready to revolutionize your approach to remote work? Listen to the full interview with Robin Thieme. In Thieme’s words, “It’s not about working less; it’s about working smarter.”