A firm without timesheets

The relentless tracking of hours spent on each task can lead to burnout, inefficiency, and a narrow focus on inputs rather than outcomes. Thankfully, there is a better way, one that has been exemplified by what we'll call "the mechanic" approach. This article will explore how accounting and law firms are transitioning from timesheets to more innovative and client-centric billing methods and performance evaluation.

Imagine taking your car to a mechanic for repair. You usually receive a bill based on how many minutes or hours it takes to fix the problem; imagine if, instead, you were presented with a transparent, fixed quote for the job. This approach is refreshing and provides a clear expectation of cost, promoting trust and satisfaction between you and the mechanic.

Today’s accounting and law firms are adopting a similar mindset. Westcourt Family Business Accountants, for instance, transitioned from a timesheet-driven model to a fixed quote system in 2016. Over time, this model evolved into outcome-based billing from 2017 onwards. This shift signifies a departure from a traditional time-based billing approach towards one that emphasises results and value delivered to clients.

One of the pivotal changes in this transformation is the adoption of module-based billing for compliance services. This approach allows the firm to standardise billing for routine tasks, making it transparent and efficient. Clients appreciate the predictable fees for services they rely on regularly, and firms can streamline their processes accordingly. This shift towards module-based billing has the potential to benefit the entire industry, making compliance services more transparent and reliable for clients.

The advisory role of accounting and law firms is inherently about providing insights and solutions that drive value for clients. Recognising this, the firm is increasingly moving towards value-based billing for advisory services. Instead of billing clients for time spent, the firm charges fees based on the value created or solutions provided. This approach incentivises the delivery of high-impact advice, aligning the firm’s interests with those of their clients.

In this new era of client-focused billing, the firm is also rethinking how it measures staff performance. The 3.5x KPI (Key Performance Indicator) is a simple approach that emphasises client satisfaction, outcomes achieved, and value delivered. Rather than focusing solely on billable hours, this metric considers the broader impact of the firm's services on the client's business. By aligning performance metrics with client success, the firm is better positioned to build long-term, mutually beneficial relationships.

In conclusion, the evolution from timesheets in accounting and law firms represents a broader shift towards outcomes over inputs. This transformation is not limited to a firm like Westcourt Family Business Accountants – it is an industry-wide movement toward more transparent, client-centric, and value-driven practices. 

Module-based billing for compliance, and value-based billing for advisory services are shaping the future of these professions, allowing firms to serve their clients better while keeping staff and owners happier without the struggle of timesheets. As the industry continues to evolve, it's clear that the focus is firmly on delivering results and fostering client satisfaction, leaving timesheets in the rearview mirror.