Accountants by the nature of our profession want to follow rules. Therefore, we like it when we have guidelines such as an employee handbook that tell us how to respond in an accounting firm to a particular situation. However, new accountants soon find out that the firm grapevine provides unwritten rules to be followed as well.
One example is in the area of the billable hours (the time each person charges to the job for preparing and reviewing the tax return or audit) that a staff should put on his timesheet. If the staff person talks to people in the firm they will get one or more of the following answers:
- Charge all of your time. The logic is that the firm wants to know when you are struggling so they can train you and decide whether to charge the client for that time.
- Same as Last Year (SALY). Charge essentially the same time as the staff person did as last year so no one will give you any grief for the time you spent on the job.
- Eat Time. Charge less time on the job than was spent last year regardless of the time you spent on the job so that the manager and partner will be impressed by your skills.
As a result of the confusing and conflicting answers, most interns and new accounting staff fall into the following pattern:
- Step 1. New staff person is told to charge all of his time by human resources and his team.
- Step 2. Staff person follows Step 1 and goes way over budget on many occasions.
- Step 3. Staff person finally gets read the riot act by at least one manager (the others have stopped using him) because he is going over budget.
- Step 4. Staff person starts charging some of his billable time to administrative time to avoid going over budget on the job.
- Step 5. Staff person gets grief from a manager or partner for having too much administrative time on his timesheet. Gets told that he needs to work more hours to keep up with everyone else.
- Step 6. Staff person starts working late and eating lunch at his desk so he can complete his “eight hour” day in ten hours by removing his daily administrative time and any billable time he is going over budget from his timesheet.
- Step 7. Staff person gets burned out and tries one of the above options for a while and starts the process all over again.
Obviously, the above steps are a little simplistic and do not apply to every firm. But CPA firms have not been charging the full value for many tax returns and audits for a while due to the struggling economy. As a result, it puts more pressure on everyone working on the job to be as efficient as possible.
The Solution
As someone who has worked in public accounting firms for over twenty years, I
understand the frustration of new staff trying to work their way through this problem. Therefore, let me give you a few pointers to avoid the problem of eating time or looking bad to your boss.
- Budget. It is your job as the staff member to make sure that I as the reviewer give you a budget. If you
don’t then I have the right to get mad at you (probably unfairly) for exceeding an arbitrary number of hours I had decided in my head that you should spend on the job. - Talk to me. It is your job as the staff member to come to me when you get stuck or you determine that you will go over budget. To be blunt, I get an office and I am the manager on this job because:
- I know more accounting than you.
- I know how to solve more problems within the firms processes and procedures than you.
- I can make judgment calls on what items you can skip to speed up your job.
- I know what items the client and the partner do and do not consider important.
- I can decide if the budget I gave you is too small and give you a larger budget.
You coming to me early also lets me know if I need to start discussing (or arguing) with the client over increased fees this year for the job.
If you continue to show a pattern of providing quality work, learning from your mistakes and a willingness to work overtime when needed (no need to work crazy overtime – but at least flexible when needed) then managers will fight to have you do their work. Managers realize that most of the decisions on whether a job will stay on budget are out of your control. But we have no sympathy for your situation when you go over budget or eat time without asking us for help because you gave us no chance to try to solve the problem.
Conclusion
If you enjoyed reading about my article on eating time in a CPA firm then I hope you will like, comment, or share the article on Facebook or LinkedIn. You might be helping a fellow accountant to find their way through this tricky problem.
If you are an accounting major or currently in the accounting profession feel free to connect with me on LinkedIn. I enjoy connecting with future and current CPAs.
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Nice supporting article. Many newbies in any situation are often afraid to talk with the bosses and ask for help. I feel asking for help from those who know a lot more than I do can only benefit me and those I work with and for. I appreciate this article putting that out there.
Is this what’s taught now in grad school management courses or is the accounting industry the only profession where becoming a “manager” results in less responsibility? Sound managers don’t place the burden on staff to “make sure” of things or “come to” management (and get yelled at for interrupting a manager who’s busy “arguing” with a client). Rather, managers are responsible for assigning tasks to the most qualified people, giving clear directions, monitoring tasks to completion, guiding projects within budgets, and assuring that staff have all the resources required to complete jobs in the best possible and least costly ways. Jeez.
Good question Brian.
Actually, the “eating time” problem has been an issue in accounting firms from small firms all the way to Big 4 firms for decades. Yes, managers do have the ending responsibility for overseeing the client management and the efficiency of the job. However, they do not always have the responsibility of training specific staff (versus helping the staff group in general to grow).
As a result, if specific staff are seen as people that are not going to make it at the firm then managers fight over using the “qualified people” to do the work. For better or worse, many managers decide on whether a staff person is “worth the effort” to stick with them through their up and downs is whether they have a consistent ability to stay on budget. Once that culture becomes established in the firm is becomes hard to stamp it out.
One other issues that is not unique to CPA firms but is part of the problem is that CPA firms (especially the Big 4 and national firms) expect tax professionals to leave (or be allowed to leave) on a regular basis to keep the pyramid structure of the firm. Therefore, since the management group understands that only half of the staff are going to make it to the next level they are not always given the advice and attention that they should.
As someone who has been in this business for 20 years ( and had a father in it for 50 years), I realize this problem does not paint a great picture of my profession. That is one of the reasons I created this blog so that it can help tax professionals around some of these common problems so they can have a successful tax career.
Wow, that is horrible, but interesting, glad I passed on the CPA path.
Thanks for sharing.
Thanks Teri for taking the time comment. To be fair, I should note that this problem can happen in any profession in which billable hours are the driving force behind revenue. But since I am a CPA, I wanted to help future accounting majors how to avoid feeling trapped by the situation.
It is obvious that the new accounting staff eats up time and this tend to create problems in the whole system and moreover we have to bear tensions as they need to understand the new code of conduct and the environment.
The step wise article has explained very well to solve this problem by optimizing the accounting force we have.
Hi Bill,
I found this blog and have been reading it and was looking for the answer for something in particular and wasn’t able to find it. Hopefully you can answer it for me. How do most firms today reconcile the 1040? And what I mean by this is with the technology we have today and the high tech software like Ultra Tax, and Pro Series how do we know what we are keying into the software is correct unless we are using something like a control sheet which basically is reconciling to what the software came up with taxable income.
Lynn, you have hit upon one of the main difference in reviewing a individual versus a business tax return because it does not balance. Even if you enter all of the information you were given the client could have failed to provide a W-2, 1099, 1098 etc. As firms improve in their use of online technology, they are using programs such as CCH’s Autofill to get the numbers from the client’s IRS forms into the software. Obviously, such programs are not perfect, but when you combine that process with the preparer and reviewer checking the numbers it helps to eliminate most of the common transposition and missed number issues (at least on the income side of the issue). In addition, for larger 1040 tax returns, the firm will get an online “tax transcript” from the IRS which provides them will all of the client’s reported income from W-2s, 1099s that have been reported to the IRS on that individual for the year. This schedule is compared to the client provided data to look for new Schedule K-1s, 1099s and differences between the income information provided by the 1040 client.
Nice article. Perhaps, it will help me to decrease my stress and work more smoothly.
It is always a problem for new employees to get adjusted.Whether it is an accounting firm or an IT company,there should be proper guidelines and proper training programs so that everything work fine.Great optimized article.I will be glad to read such articles in future.
Best Regards
Ms Ritu
Yes! this is real big challenge to companies that new accounting staff eat much time, to solve companies should give proper training and guidelines and segregate proper responsibilities, so that it might be helpful.
Thank you
V . Ramaratnam
Thanks for your posting .
Keep posting like this is very helpful For us
I have found something new in this Article.