Quantcast
Subscribe now
Get The Machine sampler (first 4 chapters) free the instant you subscribe! You'll also receive each of my posts, fresh in your inbox. 
(You'll get The Machine sampler in your inbox the instant you subscribe!)
THE SMALL PRINT: We know you're taking a risk when you entrust us with your email address, so we commit: (a) to NEVER spam you; (b) to NEVER sell or rent your data to anyone; (c) to ALWAYS make it easy for you to unsubscribe; (d) to ONLY send you stuff you reasonably expect to receive; (e) to contact you LESS frequently than you would reasonably expect.

Case study: Bas Sol, Perth (Australia)

If you are a professional-services firm – or if you track and bill time – I think you’ll find this video very interesting. It’s an interview I conducted just before Christmas with Rosie Davidson, the CEO of Bas Sol, a Perth (Australia) based accounting and bookkeeping firm. I must admit that I approached Rosie’s firm with very little prior knowledge of accounting practices.  But, what little I knew, I didn’t like!

My primary problem with accounting firms (from experience as a customer) is their obsession with time-and-material billing. My complaint (as voiced here before) – from a customer’s perspective – is that there’s only a casual correlation between time spent and value delivered.

Things aren’t much better from the firm’s perspective. T&M billing encourages high-value team members to hoard work to inflate their billings and robs the firm of the efficiencies that could be exploited via division of labor.

Although accountants have been generally uninterested in my rantings on this subject, Rosie was all ears! The bottom line is that Rosie eliminated T&M billing completely, replacing it with negotiated monthly retainers. Now, this wasn’t optional for clients (as Rosie explains in this interview) and it wasn’t phased-in over time. Amazingly, Rosie made the transition without losing a single client.

Internally, quite a bit changed too. We added a master scheduler to schedule all activities (both production and sales). We took baby-steps towards division of labor. We intercepted all inbound calls (and other distractions) and allocated them to team members in batches. And – hooray – we eliminated time tracking altogether! In addition to all this, we added some simple sales activities – geared around scheduling new client interviews for prospective clients (with Rosie).

The results? The impact on team morale? Well you need to listen to this interview and hear it from Rosie! (By the way, the video quality is terrible, but I think you’ll agree that the story more that makes up for this.)

Justin Roff-Marsh interviewed by The Independent Entrepreneur

On the subject of interviews, a friend of mine interviewed me recently for his blog. It’s nice because it’s a relaxed chat that covers a hell of a lot of ground. Click the image below to take a listen.

sean_interview

The Machine > Chapter 4: served piping-hot tomorrow

I just sent the draft of Chapter 4 of The Machine (my forthcoming book) to our publisher for comment. As soon as I’ve made the first round of edits I’ll post it to this blog (meaning it’ll likely land in your inbox tomorrow). Keep your eyes peeled for this chapter.  It breaks new ground in that it presents a model for the organization as a whole – integrating new-product development, production and sales, and suggesting an optimal constraint location based upon three organizational structures. This chapter addresses a subject I discuss at least once a week with our clients – but have never attempted to codify … until now.

Tagged with →  

Home Forums Accounting firm abandons time-and-material billing and converts practice to factory: team morale and customer satisfaction up!

This topic contains 6 replies, has 2 voices, and was last updated by  Justin Roff-Marsh 3 years, 9 months ago.

Viewing 6 posts - 1 through 6 (of 6 total)
  • Author
    Posts
  • #2363 Reply

    Ashutosh

    Awesome case study! This is truly revolutionary for professional services firms – hope to see a law firm having the guts to move over to what is surely a more productive approach, while resolving the conflict between maximizing client revenue and value delivered!

    #2364 Reply

    Thank you Ashutosh!

    We have actually done work with law firms. These however, tend to be the ones who are looking to 'productize' and sell packaged services.

    #2365 Reply

    Glen

    Justin, We previously ran an IT support business that because of my past background in business management we did not charge time based support but applied a retainer and project based system similar to the casestudy. It allowed us to be able to improve our service delivery and do little extras for clients that normally would have cost them extra $ but that was part of our retainer. They got good IT systems that worked and a fixed budget, and we got to be able to employ our staff more efficiently and do more selling without being limited to the number of staff we had ant any one time.

    #2366 Reply

    Glen

    This is a good point. If you sever the connection between effort and value, than you get more freedom to plan activities in a way that levels the load on your resources.

    Rosie actually talks about how they do this by taking control of the discovery of clients' pre-requisites.

    Justin

    #24157 Reply

    AG

    I can’t get the recording of the interview. Clicking on link for acctg firm takes me to the cashflow company video.

    thanks.

    #24258 Reply

    Fixed: thanks for letting me know!

    Justin

Viewing 6 posts - 1 through 6 (of 6 total)
Reply To: Accounting firm abandons time-and-material billing and converts practice to factory: team morale and customer satisfaction up!
Your information: