How to increase your firm’s capacity through automation (without hiring new employees)

This is one of the toughest times in history to find and hire new talent to support your accounting or bookkeeping firm.

In the last year, nearly 4 million people quit their jobs every month. And a recent survey found that 44% of people who quit their jobs have little to no interest in returning to traditional jobs.

This has fueled what some people are calling “The Great Resignation,” a situation that has made it difficult for firms to find new employees. Without a growing team, it becomes increasingly difficult to serve new clients, which then limits work capacity and revenue growth.

The last thing you want to do when trying to grow your firm is send away new business because you can’t support it.

Thankfully, there’s a way to overcome this challenge—and many firms are already doing it. In turn, they are taking on new businesses without hiring new employees.

How are they doing it, you may ask? By automating time-consuming processes in their firms.

Most firms manually do the same repetitive and time-consuming tasks every week, month, quarter, and year. This makes accounting firms a great prospect for automation.

If you automate just one process that was taking you two hours every single week, then you will save eight hours every month and 106 hours every year. Imagine how much time you’ll save if you start automating all of your manual and repetitive processes.

We have seen some firms more than double their work capacity by automating the main time-consuming processes across their firms. This gives them the ability to double the size of their client base and revenue without having to go through the painful process of finding new employees in this tight market.

However, that is not the only benefit of implementing automation in your accounting firm. There are others:

It increases firm work capacity. This is the biggest benefit and the core focus of this article. Implementing automation will remove you and your team from time-consuming processes. This will increase your firm’s work capacity and give each team member more time to support more clients.

It improves overall work quality and results in consistent client deliverables. We are all human, which means we all make mistakes. This becomes a problem as you hire new employees who are less experienced because they are prone to making mistakes. This has a negative impact on your firm’s overall work quality and results in poor client satisfaction. Implementing automation will remove human error from your process, which results in consistently high-quality deliverables for each client no matter who works on it. This improves client retention, drives client referrals, and accelerates overall firm growth.

It increases firm profitability. The biggest expense for accounting firms is payroll. If you have the ability to handle more clients (grow revenue) without having to increase payroll (your biggest expense), you will drastically increase your firm’s bottom line. This gives you more money to reinvest back into the business for growth or earn a healthy salary.

The ability to scale faster. The biggest limiting factor for growth with firms is finding, hiring and onboarding new employees to support your growing client base. Even with automation, at some point, you will have to hire new employees to continue to meet the demands of your growing client base. However, it will increase the overall capacity each employee can handle. This means you won’t have to hire as frequently and it will give you the ability to overcome this bottleneck.

So if automation can have such a huge impact on firm growth, revenue, and profitability, then why doesn’t every firm implement automation? Mainly it is not as easy as it looks and they fail to properly implement automation because:

They overthink it and never get started. As we mentioned earlier, there are a lot of automation opportunities in accounting firms. This can cause the implementation process to be overwhelming because you don’t know where to start. Even if you know, you don’t know how to implement automation efficiently. You think it will be a long process that takes weeks or months to execute which causes you to delay the process or never get around to it.

Their team doesn’t adopt the new processes and technologies. Even if you find a way to implement technology and automation in your firm, there is no guarantee that your team will adopt it. Change is hard and most employees will push back on change which will result in a failed implementation.

Here’s a step-by-step process that hundreds of firms just like yours have used to overcome these challenges and successfully implement automation.

Step 1: Identify where you’re spending your time

You would be surprised to know that you spend hours on even the simplest repetitive tasks such as:

• Chasing down clients for information.
• Scheduling meetings and calls.
• Responding to emails.

That is why you first need to spend a week tracking where you are spending your time. This will help you identify your most time-consuming activities and the biggest opportunities for automation.

You can write down where you spend your time on a piece of paper or even use a time tracking tool such as QuickBooks® Time. Whichever option you choose, be sure to be as detailed as possible and outline each activity.

For example, don’t just label your time as emails, meetings, or work, but label them as client emails, staff emails, client meetings, staff meetings, bookkeeping, or tax work.

We recommend that you only do this for a week, and then summarize your results with each activity. If your weeks drastically differ from week to week, you can track time over several weeks and summarize the results. However, the goal is to quickly get a general idea so you can start implementing automation. It doesn’t have to be perfect.

Once done, you should have an outline of your typical work week that looks like this.

This will give you a clear picture of your biggest time-consuming activities and opportunities for automation.

Step 2: Identify what can and cannot be automated

Unfortunately, not everything in your firm can be automated. There are some activities that will always require a human touch. That is why you will need to go through the activities in your “Typical Work Week,” and identify which processes can and cannot be automated.

You will want to look for simple, mundane, and repetitive tasks that don’t require a lot of critical thinking. Below is a list of common processes that accounting firms automate to help guide you through this process.

• Scheduling calls.
• Writing email.
• Chasing down clients for information.
• Reminders for your team.
• Work status reports.
• Work creation.
• Capturing receipts.
• Month-end reviews.
• Payroll processing.
• Invoicing clients.

Step 3: Identify the tech you need to automate these processes

The best way to automate and remove your team from processes is with technology. There are so many great technology solutions for automation. This sounds like a good thing, but can also be very overwhelming.

With so many options in the market, it can be hard to choose which solution to use. Most firms feel like they need to look at every single option. This can result in weeks of research and dozens of demos to just narrow down an automation solution for a single process.

As a firm owner, you are already too busy running your firm to add another time-consuming process like this to your plate. This is why most firms delay the process month after month and eventually never implement automation.

But here’s the thing. You don’t have to go through this overwhelming process because most firms have the same problems and have already done the research. All you need to do is ask! You can easily get recommendations from them on what they used to automate these processes so don’t have to do it yourself.

Personally ask a firm owner you know in the space, or post on a forum or Facebook Community. We created the Firm Founders community for things like that.

Asking for recommendations will help you narrow down your top choices without having to spend weeks doing research or on dozens of demos.

Now you may not know other firm owners in the space or be a part of an online accounting community, but that’s okay. After working with many firms we have made a list of the top solutions for automating specific accounting processes.

Step 4: Create your implementation plan

This is the final and most important step. There is nothing worse than putting in all this work to take your firm to the next level, but the implementation fails because your team won’t simply adopt it.

So how do you successfully implement these solutions across your firm? Below are some tips and best practices to do this:

Focus on implementing one thing at a time

It is easy to get excited and try to implement everything all at once. However, this is a huge mistake because implementing a solution and changing the way your team does things can be overwhelming for them. If you try to throw several new tools and processes to learn at once, it will be too overwhelming for your team and cause them to reject them. You want to focus on implementing one thing at a time. This breaks the implementation process down into bite-sized pieces that your team can easily digest. Just make sure you don’t move on to the next solution until the current one is adopted by everyone on your team.

Start small

Change is hard. Even if you break things down into bite-sized pieces, it can be difficult for the less tech-savvy people on your team to accept. By focusing on smaller and easier-to-implement solutions first, you will have a higher chance of success in the beginning. Your team will realize the value of automation, feel more comfortable with the idea of change, and more likely adopt the new process. You will also be able to use this momentum to successfully implement bigger and more complex automation tools down the road.

Host a lunch and learn

You shouldn’t just send an email out to your team about the new automation technology and how it works. You need to sit down and talk through the new process. We found buying your team lunch, and meeting in person or on zoom works well. This will build excitement around this new process and allow you to thoroughly discuss everything with your team. You will want to discuss things like:

• How this new process will make their lives easier.
• What will change and what won’t change with their current processes.
• How to actually use the new solution.

We even recommend doing a demo with your team to show them exactly how they will use the solution. To make it easy you can even have the customer success reps at the software company do this for you!

Have a follow-up meeting

You will want to schedule a follow-up meeting. You can guarantee that your team will forget some important points or run into issues as they start using the new automation tools. That is why you need to have another meeting a few weeks after your team starts using the new tools. This will allow you to cover anything they forgot, answer questions, or address any concerns head-on. You will want to continue to have follow-up meetings until everyone on your team has fully adopted each solution.

You’re ready!

You now have everything you need to increase your firm’s capacity to take on new clients without struggling to hire new employees during the Great Resignation. Not only that, but you will simultaneously be able to improve work quality, grow revenue, and increase firm profitability.