Now that technology gives firms the ability to do more with less, the value you bring clients isn’t based on counting the hours spent working on returns. It’s about building relationships and offering value-added services. Firms are working differently. So you need different efficiency metrics. You need data that tracks the things that are important to your success—things like growth, talent, and client service—so you can keep your eyes on those priorities.
Growth is measured in several ways. It’s not just about more revenue, although that’s important too. Here are a few growth-related metrics to focus on:
- Revenue generated per team member
- Revenue by service line
- Average number of services per client
Why do these things matter? They give you snapshots of what’s working and what’s not to help your firm grow. They’ll also help you improve client retention rates.
Your firm also will want to focus on a few client-based efficiency metrics, such as each client’s lifetime value and how it changes year over year. Watch how introducing existing clients to new services helps your firm’s overall growth.
Does your firm find it hard to attract or retain good talent? One of the biggest factors driving qualified talent away from accounting is firms’ focus on billable hours rather than results. Tracking talent efficiency can help your firm balance workload by evaluating income generated by employee and the number of clients per employee.
Another important talent efficiency measurement is the ratio of staff to equity partner, which shows how successful partners are at pushing work down.
Client Service Efficiency
If clients don’t feel they’re getting the right level of service, they won’t be satisfied and it won’t matter how many hours it takes you to do a return. Other metrics matter most when it comes to measuring client service efficiency, including:
- Work turnover, which evaluates how quickly jobs are being completed to meet client expectations.
- Tracking the number of cross-selling opportunities vs. those won can call attention to training gaps and also can help identify team members who excel at marketing to existing clients.
- Time spent on meaningful client contact outside of normal deadlines should be significant if you’re offering clients advisory and consulting services. If your employees are only reaching out during peak season, that’s not enough.
- Client responsiveness times for phone calls, emails, and other correspondence should be as quick as possible to help reduce client complaints and build better relationships.
Not sure how happy your clients actually are with the service you’re providing? Ask them. Create a net promoter score (NPS) for your firm to identify problem areas and figure out where to focus. Ask clients this question: “On a scale of 0 to 10, how likely are you to recommend our firm to others?” Then solicit specific feedback about why they gave that score. Calculate your NPS by subtracting the percentage of Detractors (clients who rated you 0–6) from the percentage of Promotors (client who gave you a 9 or 10).
Nothing improves without measuring it. Make sure your firm is tracking the right metrics by downloading Measuring Efficiency: Are You Tracking the Right Metrics?