2009 Review of Practice Management Programs

From the June 2009 Issue

Imagine a world in which everything ran smoothly. Where clients brought all
of their documents at the same time (or better, sent them in digital format).
Where every second of billable time was not only accounted for, but actually
billed to a client. Where logjams of client work never occurred …

We don’t live in this fairy tale world, of course, and no professional
practice has ever achieved this model of perfection. But some do come closer
than others. As the old saying goes, “Work smarter, not harder,”
and even our own Productivity Survey demonstrates that partners at the top earning
firms actually work fewer hours each year because they run their practices more
intelligently. Not that the others are errant, but the most successful firms,
large or small, are those that are more aware of their productivity and implement
strategies to enhance it.

The challenge, of course, is that as a firm’s staff size grows, services
broaden or clients grow increasingly more complex, it is more difficult for
management to be aware of all of the issues that affect practice productivity.
To aid in this challenge are two genres of software: Practice Management and
Time and Billing programs. This review section looks at practice management
systems. Our October 2009 issue is scheduled to cover time and billing systems
(or you can check out last year’s review of time and billing systems at
www.CPATechAdvisor.com/go/2161).

While there is not a definitive line separating the two, practice management
programs include time and billing functions and generally go further, with options
for analyzing productivity by client, staff, workgroup and even firm-wide. Many
also include enhanced project management tools, greater contact management features,
email and scheduling integration with Outlook, and options for document management
and web-based client portals. A few even help track client prospects and offer
additional firm marketing functions.

Of
course, there is yet another challenge that practices face when considering
how to best manage these processes: It is often hard to find the time to devote
to practice management, especially in a small firm with only a few staff. For
these small tax and accounting shops, I would generally recommend time and billing
software, which provides a straightforward entry way into greater accountability
and increasing control over billable time. Some of these programs offer additional
productivity-focused tools, as well, which can aid in management.

But as a practice grows, it is more likely to spend more time and resources
addressing workflow and productivity issues. Practice management systems can
help these firms maintain the greater efficiency, despite growing internal bureaucracies,
review processes and projects involving multiple staff collaboration. At this
point, a specialized practice management system, effectively implemented firm-wide,
and properly and reliably used, is a necessity. I consider practice management
and time and billing programs akin to the need for auto mechanics:

• If you never maintain your car, it might last you a couple of years as
  you run it into the ground. If you don’t keep your practice adequately
  maintained, the same will happen.
• If you use your car for routine matters, then visiting a mechanic periodically
  is sufficient. For smaller firms, the minimum recommended maintenance is a
  time and billing program.
• But if you manage a race team, you must have a mechanic on staff full time.
  These are the larger firms who, without a dedicated practice management system,
  will see their productivity and competitiveness suffer without full-time attention
  to workflow and business processes.

Practice management is much more than just managing time and client billing,
it is the cornerstone of successful professional firms. And while enhancing
productivity is on your mind, you might also want to check out our article about
workflow optimization from our September 2008 issue (www.CPATech
Advisor.com/go/2070).

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