4 Strategies for Effectively Managing Work in Progress

A healthy cash flow can be traced back not just to a single aspect of business management. Effectively managing work in progress is a key factor in ensuring your firm is paid for its services. This article will focus on four key actions your firm can take to better manage work in progress:

  • Scheduling work for maximum efficiency;
  • Educating clients on providing quality and timely information;
  • Effectively monitoring work whilst it is in progress; and
  • Eliminating (or at least minimising) write-offs.

1. Schedule work for maximum efficiency

In another blog series to be published shortly, we outline an effective process for the scheduling of work.

Following this process or something similar will allow you to control workflow throughout the year. It will also give you a schedule of work that indicates when a job is to start and finish. Setting specific times and completion dates for each job will be invaluable in minimising the time that a job is a ‘work in progress’.

It would be near impossible to anticipate every single piece of work to be executed throughout the year, given the tendency for changes in client circumstances or requirements (for example, you may pick up a new client part way through the year, or a client may have additional ad hoc work requests which you weren’t expecting). We recommend therefore that you also factor in some ‘contingency’ time to cover off on these un-scheduled jobs.

2. Educate clients to provide quality and timely information

Making sure you have all the information you need from a client (and that this information meets your quality standards) will assist you dramatically in eliminating any ‘job pick up / put down’ time (the time wasted by staff as a result of having to chase missing information, including ‘re-familiarisation’ time) and, as a result, in minimising your work in progress days.

You need to communicate to your clients from the very beginning the importance of them providing the right information at the right time. This matter is something that should be first dealt with as part of your engagement process.

It is important to notify your clients of your requirements well in advance of the scheduled start time for any particular job. However, you should make this process easy for your clients by providing them with a thorough checklist of information and documents you require and a questionnaire that asks them all of the questions you require the answers to.

We also recommend implementing a firm policy that provides that no work should commence on a job until all required information has been provided. This policy needs to be communicated to your clients (we suggest as part of your engagement process, and again when you provide them with your information gathering checklist and questionnaire). You should explain to your clients the benefits of this policy – that is, that it will mean less job pick up / put down time and therefore no ‘surprises’ when the invoice arrives.

3. Monitor the work when it is in progress

Scheduling work is only part of the story – you need a process in place for monitoring jobs as the work is being carried out.

To ensure jobs are completed on time (and on budget), firm leaders need to monitor:

  • Whether all information required from the client has been provided;
  • When the job begins;
  • Whether there are any ‘hold ups’ in getting the job completed (providing firm leaders with the opportunity to promptly resolve any issues) and how these might affect the scheduled job completion date;
  • When the job has finished; and
  • How long the job took to complete (in hours) and how this compared to the budgeted or estimated number of hours.

Whilst it isn’t essential, firm leaders can benefit from having powerful workflow management software in place, as such software can make this monitoring process very easy.

Jobs prepared by different team members come in different formats, adding to review time. Having a standard way of doing the work, including a central location or file that records all queries, review points and matters for attention of a partner or manager will greatly improve the job review process and will assist the handing over of the file to different team members.

4. Eliminate (or at least minimise) write-offs

Writing off any work in progress amounts at the invoicing stage is less than ideal. The following is a list of factors that can help to minimise the chance of being faced with this situation:

  • Having an effective client engagement process;
  • Effectively budgeting each job;
  • Scheduling jobs well in advance (ideally on an annual basis);
  • Having the right staff doing the right work;
  • Having an effective client information gathering process;
  • Having systems and processes in place that enable jobs to be completed and reviewed efficiently; and
  • Relying on best practice systems and tools (such as quality document management software, standard workpapers and checklists and quality workflow management software) throughout the job process.

The quicker you get a job out the door, the more you can let in. Master your work in progress and you’ll soon see impressive changes in your firm.

 

Brad Geelan | Business Fitness

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For Accountants

The official account of For Accountants, an online resource specifically designed for accountants in public practice.

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