Increasing Accounting Firm Capacity Without Adding Staff

Firms focused on growth cite capacity as one of their most confounding issues. It’s the classic conundrum: how do you get maximum output from the resources you have? How can you get more done without having to hire more people? If your firm is struggling to get everything done—or worse, is turning work away because you simply don’t have the capacity to handle it—then you know the struggle is real.

Like anything you do in your firm, making positive change requires a plan. Capacity planning helps you determine realistic goals in your output and understand the hurdles that stand in your way.

It has additional benefits as well. Capacity planning can prevent burnout, save you from passing on lucrative projects, create added value for your clients, and make your firm more successful overall. If this all sounds like a big promise, it isn’t—but it does take some footwork on your part.

Like most other skills, capacity planning takes practice and time. It requires careful strategizing to determine the best workflows and distribution. It involves in-depth tracking, identifying, and analyzing flaws in your current workflow processes, and gauging value in your projects and resources.

The truth is, many firms don’t maximize the resources they have on hand. Whether it’s a misallocation of labor, technology, or focus, the most frequent conclusion is that the firm needs more staff. But oftentimes hiring isn’t just unnecessary, it can actually take productivity and profitability in the wrong direction. Adding tools to increase capacity—either by reducing redundant tasks or speeding things up in some other way—is frequently a more cost-effective and efficient way to get the job done.

You might already see where we’re going with this: technology is the key to unlocking greater capacity. Read on.

Capacity planning and why it matters

People have different levels of efficiency. Excellent, meticulous employees might have low-volume, but high-quality output. Other employees might handle large volumes of relatively simple work less tied to quality. And of course, the unfortunate truth is some employees might not do very much work very well—and then it’s time to consider an employee improvement plan or possible dismissal.

Start your planning by assessing your staff’s strengths and weaknesses. Chances are you’ll have a good balance of volume and quality. Once done, you’ve taken a big step toward improving your workflow.

The trick to capacity planning is finding the balance between your available staff and client needs so you can maximize your work volume. In some cases, you may find you have an abundance of work—avoiding hiring in this case could mean outsourcing or offshoring.

But there’s an odd phenomenon you might encounter—you could actually be overstaffed. Firms with too many employees and capacity issues invariably suffer from poor allocation of work, or poor staff composition. In these cases, you’ll need to downsize or restructure your staff depending on their abilities. Each of those can be a tough task considering how much the busy season affects your workload. It takes some analyzing and planning to find the sweet spot, but once you do you’ll experience:

• AN INCREASE IN PROJECT EFFICIENCY

  Capacity planning provides a general overview of projects and lets managers know which team members are working on which projects, as well as their progress and whether the project is taking more or less time than estimated. Overall, capacity planning helps project management and completion run more smoothly, but it’s also a tool for continuous improvement. Play with your variables—team members used, estimated time to complete, project types—and see what combinations nudge up productivity.

  And here’s a tip—continuous improvement means just that. Once you’re comfortable with a recipe for productivity, that’s no reason not to continue tweaking. Employees learn new skills, and find new interests. Technology advances to make more possible in less time. When you have things humming along, resist the temptation to back away and never look at them again.

• AN IMPROVEMENT TO YOUR LONG-TERM STRATEGIC PLAN

  Capacity planning can also help determine if you have enough workforce to complete potential future projects or if completing your current tasks on time is even possible. Additionally, when you know your capacity, you can provide clients with more realistic timelines. And you’ll be in a better position to scale up.

How to plan for capacity

Capacity planning isn’t something you can just guess at and get immediate results. It requires following a few key steps to start off on the right foot. Once you’ve created and implemented your plan, you’ll also need time to collect the data and assess its effectiveness. Here are some tips to help you get started:

• TRACK EVERYTHING… AND WE MEAN EVERYTHING

  Start by listing out all of the services you provide and who on your team does what. This doesn’t exclusively include the services you provide your clients; it’s also internal tasks like marketing and team management. You want to make sure everything that takes up an employee’s time is accounted for.

  Record how long each task would take in an ideal state (be realistic). Then note how long these tasks currently take. Be specific. If an employee spends a lot of time on bookkeeping or onboarding clients, note it. (We’ll refer back to this later in the article.)

  Like improvement, capacity planning is a continuous process. Once you’ve put a new plan in place, you want to be able to reevaluate to see if your plan is working. If you’re tracking all your services accurately, you’ll be able to see where there are issues and make adjustments as needed.

• DETERMINE YOUR CRITICAL PATH AND FIND BOTTLENECKS

  Once you’ve figured out who does what, you can begin to look at your processes. Essentially, you’re determining the steps it takes for a project to be completed from start to finish. This is your critical path.

  Your critical path can show you a lot, but its importance now is in determining where work starts to slow down within your process—AKA: bottlenecks. Invariably, you’ll have bottlenecks… most operations do! But once you pinpoint them, you can rework your critical path to make things flow more efficiently.

• GET TO KNOW YOUR PROJECTS, RESOURCES, AND VALUE

  By now you should have a good idea of how much time, peoplepower, and resources each client project requires. This is important to understand when creating your plan. 
  You should also look at how much value each of your projects and resources bring to your business.

  IMPORTANT: If you’re working on tasks that slow down your employees and don’t bring in much revenue, you might consider adjusting your services so you can improve your capacity, or investigate alternatives, such as technology, that can take the job over at a fraction of the cost.

• SUPPORT YOUR TEAM

  The largest factor in capacity planning is your team. Unless you’re a one-man show, your team is the most essential part of your business. They’re doing the work that brings you revenue, and it’s important you support them in the best ways possible.

  Capacity planning is all about making the most of your work with the resources you have available BEFORE adding any resources. A simple way to do this is to support your team.

  Not sure how to support them? Ask them! Having regular, candid conversations about how things are going is a powerful way to support your team.

YOU CAN ACTUALLY CREATE CAPACITY

Earlier, we discussed whether some of your staff might be performing tasks that slow them down. In many cases, these tasks are repetitive and, dare we say it, BORING tasks no one really likes doing.

For example, tasks like bookkeeping are often tedious and take time away from your employees that could be used to work on other, more lucrative projects instead. To increase capacity, you can implement technology that provides simple solutions to areas of your business that may be bottlenecks or soaking up your productivity.

Automation is a perfect solution for removing bottlenecks, and it frees up your human staff for more productive tasks. It’s also cost-effective and, when the technology is well-structured, scales well with your business. That ensures it never takes more than it gives.

If you’ve been thinking about how to overcome the capacity bottlenecks that are holding your firm back, now’s the time to dig into the benefits of automation. You can learn more by chatting with a specialist—click below to get started!