“The accounting services global market value is expected to reach $735.94 billion in 2025.”
The stat mentioned above indicates the exponential growth of the audit and accounting industry. However, despite the impressive growth, the sector continues to face challenges such as rising costs, resourcing bottlenecks, changing tax legislation, volatile market conditions, and fierce competition.
Besides, resourcing challenges are the biggest roadblock for audit and accounting organizations. To address issues like skill shortage, sub-optimal utilization, high resourcing costs, etc., these firms need a comprehensive resource plan to leverage their workforce optimally.
Effective resource planning enables audit and accounting companies to meet future resource demands, ensure competent allocation & utilization of consultants, minimize burnout & unplanned attrition, and reduce project delivery costs.
This blog sheds light on the importance and benefits of resource planning in audit and Xero Accounting Firm and how SAVIOM’s resource management software can help.
1. Why is resource planning crucial for audit and accounting firms?
Audit and accounting firms are responsible for preparing and analyzing financial documents for clients to help them run their businesses smoothly. These companies generate revenue by charging their clients for the consultants’ expertise and time. As a result, they need to maximize the billability of their skilled personnel to improve profitability.
Further, since the audit and accounting sector experiences seasonal demand fluctuations, they need adequate foresight into pipeline assignments to manage their resource requirement efficiently. Unfortunately, many firms still use outdated legacy systems, often leading to information silos, double bookings, ineffective scheduling, allocation, etc.
Additionally, legacy tools lack forecasting capabilities resulting in last-minute firefighting, cost escalations, and project delays. Hence, there is a growing necessity for enterprise-level resource planning in audit and accounting firms. It enables them to identify and allocate competent service personnel to projects at the right time and cost.
Therefore, effective resource planning plays a critical role in helping these companies mitigate resource-related bottlenecks and enhance profitability.
Now we know the importance of resource planning in audit and accounting firms, let’s understand its business benefits.
2. Benefits of resource planning in audit & accounting firms
Effective resource planning enables audit and accounting firms to maximize the potential of their workforce, thereby ensuring better profitability and business sustainability. Enlisted below are its top five benefits.
2.1. Maximize billable utilization of auditing personnel
Billable utilization is a critical KPI (key performance indicator) for audit and accounting businesses. With the help of resource planning, consulting managers can assign auditors and accountants to billable tasks and optimize their utilization. Additionally, managers can take corrective measures to prevent sub-optimal utilization of resources.
For instance, a senior tax analyst spends 50% of their capacity on admin work such as internal meetings, data entry, and answering email inquiries. In this situation, the supervisor will mobilize the senior analyst from non-billable work to a billable or strategic accounting project. It will help enhance the billability of the consultant, maximize productivity, and improve organizational profitability.
2.2. Helps foresee & bridge skill gaps of consultants
Since most accounting projects are short-term engagements, consultants work on multiple assignments simultaneously. To ensure the availability of accountants for pipeline accounting projects, managers need to analyze and forward plan resource requirements in advance. With resource capacity planning, they can identify excess and shortfall of professionals and take course-corrective action ahead of time.
For excess accountants, consulting managers can implement suitable resourcing treatments such as bringing forward project timelines, providing training/shadowing opportunities, or selling additional capacity. In case of shortages, they can initiate appropriate upskilling/retraining programs for existing resources or go for planned hiring. Therefore, effective resource planning can prevent last-minute firefighting for competent consultants.
2.3 Enables competent allocation of auditors and accountants
Although most audit and accounting firms follow a matrix structure to enhance operational efficiency, they also experience resourcing roadblocks such as double bookings, among other scheduling conflicts. Additionally, allocating the right personnel to the right assignment becomes cumbersome due to a lack of centralized visibility. Therefore, it prevents the company from effectively leveraging its consultants across multiple locations.
Resource planning provides enterprise-wide visibility of the various resource attributes and their current and future bookings. For example, suppose there is a demand for an auditor with CAATT skills. In that case, the manager will access the organizational skill matrix and schedules to find an available resource with the relevant skill set. This enables consulting supervisors to identify best-fit analysts for various project tasks, ensuring competent allocation.
2.4. Minimizes employee burnout and unplanned attrition
Audit and accounting personnel often work on stretch assignments as part of their on-the-job learning. Although they help in resource upskilling, multiple stretch assignments can overload the accountants, resulting in work-related stress and burnout. Besides, improper planning leads to last-minute firefighting and overutilization of the existing professionals.
With the help of resource planning, accounting supervisors can ensure even work distribution of all resources. They can monitor the utilization levels of all consultants and take measures to address over/underutilization. For example, managers can identify overloaded analysts and reassign the additional work to other resources. Furthermore, they can give the consultants short assignments based on their available capacity preventing resource overloading, minimizing employee burnout, and reducing unplanned attrition.
2.5. Streamlines the resource requisition workflow
Resource requisition workflow is a series of steps project managers undertake to fulfill consulting project vacancies. For example, if the accounting project manager requires one tax accountant and one forensic accountant for an ongoing project, they can raise a request for the same. Next, the resource manager will analyze the demand and shortlist tax and forensic accountants with the relevant competencies. They can also consider the consultants’ interests before assigning them to the project. Finally, the list will be sent to the project manager, who will accept or decline the candidates.
Although the requisition workflow sounds simple, various constraints, such as resource crunch, can severely impede the process, hampering project execution and delivery. However, resource planning enables accounting supervisors to forward plan and strategize for various workforce-related bottlenecks. It ensures the availability of skilled professionals and provides sufficient lead time to address shortfalls/excesses ahead of time. Furthermore, it streamlines the resource requisition workflow, allowing managers to identify and assign suitable consultants to various project vacancies.
Now that we know the benefits of resource planning, let’s understand how futuristic resource management software can help.
3. How can next-gen resource management software help?
Resource planning is critical for competitive audit and accounting firms that want to stay ahead of the curve. A comprehensive resource management solution can help these firms achieve better productivity and performance, improve profitability, and future-proof their business.
Here’s what Saviom’s pioneering resource management software can provide your company:
- Enterprise-wide visibility into critical professional attributes such as demand, supply, availability, capacity, utilization, cost rate, etc., enabling competent allocation and optimal utilization of the service personnel.
- Advanced forecasting and resource capacity planning to help you identify and course-correct excess/shortfalls of accounting professionals ahead of time.
- An organizational competency matrix that captures your employees’ skills and certifications and enables managers to identify best-fit consultants for projects.
- Automated resource requisition workflow that maintains an audit trail of requests across the enterprise.
- Real-time reports such as forecast vs. actual financials, availability, utilization heat maps, project vacancy, etc., to help you track variance and take remedial steps.
- The open seat feature empowers audit and accounting professionals to express their interests in specific assignments or tasks.
- The What-if analysis feature enables you to perform advanced scenario-based modeling and simulation to arrive at the best possible outcome.
4. Final Thoughts
Effective resource planning can help audit and accounting firms better prepare for volatile market conditions. In addition, it can help these companies address various resource-related challenges proactively and maintain a competitive edge. Therefore, resource planning plays a vital role in future-proofing the consulting workforce, improving organizational profitability, and fostering business sustainability.