Great practitioners look for efficiencies in their workflow. They understand the importance of streamlining the path from client documents to financial statements. Removing obstacles will reduce staff and client frustration. It saves time and money. And it frees staff up to focus on higher value activities.
Question is, how do you diagnose inefficiencies in your workflow? Advisors we work with take the time to step back and create a workflow diagram. Here’s how they do it.
The Workflow Diagram
A useful diagram of your workflow contains more than just the steps in the process. To find efficiencies great practitioners identify three things needed to complete each step. They list the people involved and the time required at each stage. They also determine the value of their time. And that enables them to put an actual cost against each step in the workflow.
For instance, say your time is worth $100 per hour. You spend two hours a week sorting documents. That’s $800 a month that might be saved if the sort could be automated. And you would now have those eight hours to spend giving client advice or doing other high value work.
The goal of a good diagram is to determine which steps waste time and money. And to see how much time would be freed up if those steps were automated. How much money would be saved? What could you do with that time and money?
A Sample Workflow
Recently, I sat with one of our clients as they worked through a diagram of their workflow. Depending on your set-up and your client’s capabilities your workflow may be different. But this is a useful example of the details of how the process can work. In this example, the firm has 3 bookkeepers and two other staff. They have 25 clients.
Before the firm started documenting their workflow they had to understand the goal. In this case it was to turn client documents into financial statements. So the first question they asked themselves was, what do the clients have that we need? They came up with three items: bank statements, paper receipts and paper bills.
The next step was to identify how they collected documents from their clients. They had two approaches. Often the client would scan their paper docs and email everything to the bookkeeper. Problem was, the email bombs turned the firm’s inboxes into a drop zone. It was chaotic. Even cloud-based storage solutions like Dropbox weren't perfect solutions. The receipts still just got dumped in one place.
The other approach to document collection had even more complications. The firm called it ‘the packet swap’. They hired a bike messenger company. Every Monday messengers would criss-cross the city. At each client site they would pick up the client’s documents and also a USB drive. On the drive were the client-side QuickBooks files.
This cost the bookkeeper hundreds of dollars a month in courier fees. And a team member needed to manage the weekly collection. Inevitably they found themselves spending time chasing after clients for late or missing docs.
Distribute and sort
The collected documents then had to be distributed to the right location within the firm. This required someone to spend an hour or so each week making sure docs ended up in the right place. A cost that added up to hundreds of dollars a month.
Sorting the paper documents could be a time-consuming step. Bookkeepers had to dig through envelopes or boxes full of receipts. Many had nightmare stories about bags filled with receipts that they had to pick through. Sorting was not only costly, but a demoralizing waste of skilled resources.
Process and file
Processing the documents meant manually entering them in QBD. Which meant more time spent by a bookkeeper. Processed documents then had to be stored. That meant scanning and electronic filing. Or filing the paper in a cabinet. Either way, sorting took staff an hour per week. And, eventually, the sheer volume of docs required off-site storage. Another cost.
Next the bookkeeper had to deal with the client’s QBD file on the USB. This turned out to be a stressful step. Each week they hoped they didn’t overwrite the QBD file. Which would occur if there were differences between bookkeeper and client files. Overwritten QBD files meant frustration and extra work. Plus the bookkeeper had to pay for servers to host the QBD platform.
This step could also be a time suck. Sometimes it took several trial closes to isolate differences between client and bookkeeper records. It could take a while to get to a final close. Which meant completed financial statements took longer than necessary.
To close the loop the reconciled QBD files on the USB stick had to be shipped back to client. Postage or couriers had to be paid for. And someone had to make sure the process ran smoothly.
Create financial statements
Finally, the bookkeeper could do the work the whole workflow was dedicated to. Create the client’s financial statements.
The completed diagram showed how inefficient the firm's workflow was. They spent many hours and thousands of dollars a month dealing with paper documents. With the exception of the final step it was obvious that every point in the workflow required staff time. Collection and sorting were key pinch points where the most time was being wasted. And those bottlenecks caused problems with morale.
The next step would be to eliminate staff involvement in the most inefficient steps. And that would mean looking for ways to automate the workflow.