5 Essential Project Management Tips for Accountants

For accounting firms, it’s vital to serve clients efficiently and effectively. Firm leaders are constantly considering if projects will be completed on time and on budget. Having many projects happening at once complicates this determination further. 

What Is Project Management?

Project management is the application of methods, processes, and knowledge to achieve project objectives. Today, this application is often handled through software. 

Typically, project management objectives include: 

• Completion of the project to the client’s satisfaction 
• Completion of the project on or before the due date 
• Completion of the project on or under budget
• Completion of all technical requirements of the project – for example, completing all required forms on a personal tax return

“Finite” factors such deliverables, technical requirements, project budget, and due dates are considered in project management frameworks. Additionally, other factors such as client satisfaction, file sharing, document management and team communication should also be considered.

In this article we will cover some tips you can use to improve project management at your firm. In addition, setting up a project management system with the right tools can help your team serve your clients to the best of their ability and maximize profitability.

Tip #1: Create a Project Structure

The first key to managing projects efficiently is getting organized. To get started, set up a system that allows you to see all open projects and the progress made on each. Once this has been accomplished, look for ways to streamline projects that are similar in nature.  

For example, create a standard checklist for individual tax return preparation that can be utilized each time a new tax return is started. Create guides that help the accountant makes decisions based on certain outcomes. For example, if the tax client started a business last year, what additional steps need to be completed by the accountant?

Another way to build project structure is to create templates that can be utilized repeatedly. For example, an accounting firm can create standard audit templates that are used on each engagement. A bank reconciliation template, an accounts receivable aging template, and so on can be used by team members without reinventing the wheel. This saves valuable time on client engagements.

Tip #2:  Define a Project Workflow

Workflow is the sequential order in which tasks on a project need to be completed, created with requirements from the client in mind. It defines what information is needed at what point in the work. When done poorly, a firm may be unorganized in their processes, which could result in requesting important information twice or not at all, losing important client documents after receipt, and other unprofessional mishaps that both frustrate the client and lead to inefficiencies that cost money.

A better solution is to set up a system where processes are completed consistently for each client. Workflows should be set up so that information moves seamlessly from client to each accountant working on the project. Two things to keep in mind when defining project workflows:

• File Sharing: how are documents being sent and received between us and the client? Are they being shared on a portal, sent back and forth by email, or accessed via direct link? Is there a secure file sharing system so that only the client and project team members can view and edit the files?
• Document Management: how are we organizing, storing, and accessing project documents, such as audit workpapers and client tax documentation (W2, 1099, etc.)? Is there a common documentation system so the same naming conventions and file structures are used across the entire client portfolio?

Tip #3: Get Clear on KPIs

Key Performance Indicators, or KPIs, are metrics that indicate how an organization is progressing towards a goal.  For many accounting firms, the end goal is healthy firm profitability and efficiency. Key Performance Indicators can help you determine if you are on the way to achieving project goals or if you will fall short of expectations.

There are many KPIs out there, but some useful ones to focus on are:

• Project Velocity: How much progress is made on a project in how much time?
• Utilization Rate: What percentage of hours worked are billable to clients?
• Realization Rate: What percentage of the billable hours worked can be charged to the client?

The above metrics will help you focus on project efficiency and employee profitability. Integrating time tracking and billing information to your project management system will allow you to calculate these metrics more easily.

Tip #4: Survey End Users

How will you know if the project management processes you have implemented are working? Create a client and accountant feedback loop so you can adjust your processes on the fly to better suit everyone. This will help you gain insight into the user experience. You may find that while you implemented a new process with the best intentions, it may not be working for the client, your team, or both. Keeping both clients and employees happy is important for an accounting firm, so this step is vital. 

Tip #5: Conduct a Post-Mortem After Tax Season

When you are in the middle of the chaos that is tax season, it may be difficult to assess if the project management processes you implemented are working. It’s usually more helpful to evaluate the project management system after the dust settles from the busy season. 

You will have loads of data from the volume of work just completed. Some data will be positive, such as time saved by using a new standardized template. Other data will be negative, such as deadlines missed.

View both good and bad data as helpful to the firm. Similar to surveying end users, the goal of this exercise is to continually improve the system and processes.

Final Thoughts for Application

As mentioned above, there are multiple benefits to having good project management processes in place. It allows your firm to be as organized and efficient as possible. Employee satisfaction and collaboration will improve. Perhaps most important, client satisfaction should improve because quality work will be delivered on time and unnecessary communication will be limited. 

If you are ready to take the next steps to improve your firm’s project management, the tips covered in this article will help – as will making use of the excellent accounting practice management software available on the market today.