Many individuals and organizations have needs that only accountants can address. Tax planning and preparation, bookkeeping and financial statement preparation, audits for public and privately held companies, forensic accounting, management consulting, due diligence for mergers and acquisitions — these are just some of the numerous engagements that accounting firms may be called upon to execute.
The complexity of some of these engagements, and sometimes the sheer volume of work on a relatively simple portfolio of business, can quickly overwhelm even the most skilled and highly-organized professional. That’s where project management comes in.
Project management in the context of accounting firms is the systematic planning, execution, and oversight of accounting engagements and initiatives. This involves coordinating team members, allocating resources, setting timelines, managing client expectations, and ensuring deliverables meet quality standards — all while staying within budget constraints.
It probably goes without saying, but to state an important underlying assumption, let’s acknowledge that if you want to succeed in any project, in anything really, you must be organized, manage your time, and communicate well with others. When it comes to accounting, it becomes all the more vital.
Some of the engagements noted above could take weeks months, or even a few years to complete. And some are incredibly complex. For these projects to succeed, accountants and operational staff need strong project management skills — a core competency for any modern professional firm — and accounting practice management software to support them.
We’ll explore practice management software in depth in a moment, but first let’s explore the specific benefits that successful project management can bring to accounting firms.
Better administer your resources with the help of project management. Determine which projects you should address first, then determine how many resources you need to complete the project. This approach allows your accounting firm to feel more in control as you schedule the resources required for each project, eliminating unknown surprises.
Everyone loves saving money. Implementing effective project management practices can significantly reduce costs for accounting firms by boosting both efficiency and productivity. By streamlining workflows and optimizing resource allocation, project management enables your firm to accomplish more with less. For instance, you can strategically assign your most skilled professionals to complex tasks, ensuring they're completed accurately and swiftly.
Project management can help your accounting firm achieve better financial results because it allows your accounting professionals to make the most out of their resources and gain a competitive advantage over other firms. With more productive and efficient processes, you can accelerate project timelines, allowing your firm to handle a higher volume of work without increasing overhead. Ultimately, the enhanced efficiency and productivity derived from robust project management translate directly into improved financial performance for your accounting practice.
Project management allows your CPA firm to develop a more effective marketing strategy. This is because project management increases the data available to help you determine which projects are most important so they can be prioritized accordingly. With an improved marketing strategy, your accounting firm will generate better and more consistent leads, leading to more sales and sign-ups.
Want to achieve a higher level of client and staff satisfaction? Of course, you do. With project management, you empower your accounting firm to produce higher quality work that meets the client's requirements. In addition, your accounting firm staff will be able to finish their projects on time, keeping them happy and productive.
Implementing successful project management in accounting firms serves as a catalyst for enhancing individual and collective competencies. By providing a structured framework for task allocation, progress tracking, and collaboration, you foster enhanced communication, accountability, and team bonding. Moreover, as employees become more adept at project and task management, they develop critical soft skills such as time management and prioritization.
The cumulative effect of successful project management in accounting firms is significantly improved organizational performance. By optimizing resource allocation, enhancing efficiency, and reducing costs, firms can boost their profitability and competitive edge.
The improved marketing strategies derived from project data result in better lead generation and client acquisition. Meanwhile, increased client and staff satisfaction fosters loyalty and reduces turnover. As employees develop stronger competencies and collaboration skills, the overall quality of work improves.
This synergy of benefits — from financial gains to enhanced human capital — propels the accounting firm towards excellence, enabling it to handle more complex projects, attract high-value clients, and establish itself as a leader in the industry. Ultimately, effective project management transforms not just individual processes, but the entire organizational ecosystem, driving sustainable growth and success.
While the benefits of project management in accounting are clear, implementing it effectively isn't without its challenges. Let's examine some common hurdles and how to overcome them.
Project managers have the pressure of staying on top of everything. From juggling multiple tasks at the same time, managing everyone's expectations to solving various problems, and staying on top of their own schedule, a project manager's life isn't the easiest. The same can be said for your firm’s accountants, who may at times struggle to stay above water and remain positive as new projects flow through.
Whether you're the office manager of your CPA firm or the accountant implementing the manager's directives, it's crucial to identify and solve challenges together.
One of the main challenges in project management is progress uncertainty. If you are unable to quickly get a real-time picture of the project status, it's going to be difficult to gauge what actions are necessary to keep the project on track, or to know when a minor issue has arisen that needs to be prevented from turning into a major problem. How in the world do you deliver a project on-time when you have no idea of the current status?
Solution: Find the right project management solution and software to help you and your team manage tasks and track the progress of any project productively.
Working with different team members can boost team morale and bonding, but having to meet up with each one of them to compile their tasks and put them in the schedule is a significant challenge. In addition, it's hard to give clarity to members on the project's plan of what needs to be done in order to ensure the project is on track.
Solution: The best way to overcome this obstacle is to find workflow management routing software to help your accounting firm in project scheduling. This tool will not only help you and our team manage your resources more effectively, but it will also help put everyone on the same page when it comes to scheduling the project.
Effective communication is one of the most critical aspects of project management. It can also be one of the most difficult parts to manage.
Solution: The first thing you should do is make sure your team members share the same project goal, are well aware of client and management expectations, and are familiar with their personal assigned tasks. Another tip is to make sure that your firm is following these best practices for proactively preventing communication problems.
This is one of the most common challenges faced within project management. As accounting projects progress, scope creep may occur due to numerous reasons. Unclear initial requirements, poor communication between stakeholders, changing regulations, client requests for additional deliverables, lack of formal change control processes, underestimation of project complexity, and the pressure to maintain good client relationships — any of these factors can lead to gradual, and sometimes unnoticed expansions of the project scope. The end result is increased workload, extended timelines, and potential budget overruns.
Solution: Define clear project boundaries, implement change control processes, educate clients on scope implications, use project management software, document all communications, include contingencies in plans, learn to decline unreasonable requests, conduct thorough initial assessments, and use phased approaches for complex projects.
Blurred expectations can come from a variety of places, such as your client, your team, or even you. A major challenge with blurred expectations comes from the fact that your client may not want to acknowledge that their expectations are different. And even if you recognize the issue and try to fix the problem, you may not be able to do so effectively or on time.
Solution: The best way to resolve blurred expectations is to confirm the expectations, clarify any assumptions and simplify the requirements of all parties involved before jumping into any project. Not only will this clarification help you manage expectations and simplify the team's task management process, but it will also help improve the firm's overall communication.
Now that we've discussed the benefits and challenges of project management in accounting, let's explore a powerful tool that can help address these issues: accounting practice management software.
You may recall that I promised earlier to explain the role of accounting practice management software. Before I do, it’s important to understand what it is, and how it differs from general project management software.
At its core, accounting practice management software is a specialized software solution designed to streamline and optimize the operations of accounting firms.
Key Components Typically Include:
While both project management and practice management software aim to improve efficiency and organization, accounting practice management software is a more comprehensive solution for the specific needs of accounting firms, incorporating elements of project management alongside industry-specific features.
Key Advantages of Accounting Practice Management Solutions
In summary, accounting practice management software is a type of project management software that is purpose-built for accounting firms, while project management software is meant to be applicable to a wider range of industries and disciplines. That important distinction is why certain features are essential when researching project management solutions for accountants.
When researching project management software for accounting engagements, you’ll quickly discover there are long lists of features to sort through. How do you know which ones are the most critical? As with many questions, the best initial response is “it depends.”
What mix of tax, audit, and consulting engagements are you juggling? What volume of projects is your firm managing? What are your staffing levels? These are just a few of the factors that will influence the choice of what’s best for your firm.
Regardless of the unique circumstances for your firm, there are table stakes to consider when it comes to project management tools. Make sure any software solutions you’re considering include — at minimum — the following:
With these essential features in mind, let's compare some of the top project management tools available for accounting firms.
When it comes to choosing the best project management tool for your accounting firm, the options can seem overwhelming. Each solution offers a unique set of features, pricing structures, and specializations that cater to different needs within the accounting industry.
In this section, we'll compare some of the top contenders in the market, highlighting key features, pros, cons, and pricing. This comparison will help you make an informed decision based on your firm's specific requirements, size, and budget.
Keep in mind that the supporting data behind this comparison can change at any time as providers release new features and make changes to pricing structures.
Firm360 is an accounting practice management software built by and for accountants. It’s best suited for firms that need accounting-specific features alongside predictable pricing and an established track record of efficiency gains.
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*Available beginning with the Standard plan
**Available with the Premium plan
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Canopy is an accounting practice management tool that is best suited for tax-focused firms that need a feature-rich, customizable platform with options to add specific modules as their needs grow.
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Canopy prices by module as opposed to plan levels, so the pricing scenario is not as straightforward as some other solutions. The pricing starts at a steep $150/month for the client engagement platform, plus an incremental cost of $89/user per month for the remainder of the full suite. So, for the first user the all-in price is $239 per month.
Asana is a project management tool best suited for small firms just getting started; however, it may be quickly outgrown.
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Basecamp is a project management platform best suited for smaller teams of entrepreneurs, freelancers, small businesses, and departments within large organizations.
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ClickUp is a project management software that’s best suited for teams that need highly-customizable workflows and reports. However, it may not easily meet accounting firm needs.
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SmartSheet project management tool best suited for large teams or organizations that need a highly customizable solution. However, it may require significant time to set up and optimize for accounting-specific needs.
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Trello is a general project management solution that can best be adapted for accounting practice management by solo practitioners or small bookkeeping startups.
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While understanding the features and benefits of the various software solutions is crucial, seeing real-world examples can provide valuable insights. Let's look at some case studies of accounting firms that have successfully implemented practice management software.
Accounting firms that are supported with the right practice management tool recognize significant advantages.
Banks, Gray & Crumpler, PLLC was able to grow average revenue generated per employee by over 25%, add 20% more employees, realize a 50% productivity improvement, and gain much better visibility into their team’s project workload.
Spivey & Morton, CPA, PA realized improvements in productivity, project visibility, client communication, and remote work effectiveness.
Millikan CPAs & Advisors grew its team size by 50% while also increasing productivity and output of each team member, on top of implementing a highly effective method for secure communication with clients.
As these real-world examples illustrate, the right tool can transform an accounting firm's operations and bottom line.
In conclusion, effective project management is not just a nice-to-have for accounting firms — it's a critical component of success.
From improving resource allocation and increasing profitability to enhancing client satisfaction and team competencies, the benefits of robust project management are clear and far-reaching. While challenges exist, they can be overcome with the right strategies and tools.
By carefully considering your firm's unique needs and choosing a project management solution that aligns with those needs, you can elevate your firm's performance, streamline operations, and ultimately deliver greater value to your clients.
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