The above growth is attributed to several macroeconomic factors, such as the increasing complexity of tax regulations, globalization, increased financial frauds and risk awareness, etc. Therefore, there is a growing demand for audit and accounting services as companies worldwide strive to protect their profit margins and stay ahead of the competition.

However, audit & accounting firms face numerous resourcing challenges, such as skill gaps, inability to meet seasonal demands, unplanned attrition, etc. That’s why effective resource planning is the need of the hour to future-proof and optimize the audit and accounting workforce.

This blog discusses the various steps you can implement to create an efficient resource planning in audit and accounting firms.

But first, let’s understand the benefits.

Significance of resource planning in the audit and accounting sector

Resources are the crux of audit and accounting service firms since they generate revenue by charging their clients for the consultants’ expertise and time. Therefore, firms need an efficient resource plan to maximize the billable utilization of their skilled personnel and improve profitability.

Since this sector experiences seasonal fluctuations, resource planning enables firms to meet the sudden rise and fall in demand by comparing the project requirements against capacity. Additionally, it helps bridge the skill gaps in advance, ensuring consultants’ availability before the project’s onset, thus eliminating last-minute firefighting.

In addition, efficient resource planning helps managers create the right mix of permanent and contingent audit and accounting personnel. For example, an upcoming assignment requires a forensic auditor to evaluate a firm’s financial records and collect evidence for legal proceedings. With efficient resource planning, managers can easily deploy a contingent forensic auditor depending on the duration of the assignment, minimizing project resourcing costs.

Overall, resource planning is critical for audit and accounting firms to identify and allocate competent personnel to projects at the right time and cost and deliver high-quality services to clients. In addition, it helps firms to stay competitive in a rapidly changing market and adapt to new challenges and opportunities.

Given the significance of resource planning in the accounting and auditing industry, the following are the best strategies to make it efficient.

Best practices to implement a resource plan in audit and accounting firms

Robust resource planning is the backbone of every project since it redefines business efficiency and helps unlock the workforce’s full potential.

Here’s how you can implement an effective resource plan.

Forecast and bridge capacity gaps of consultants for pipeline assignments

Most accounting/audit projects have a shorter timeline, and usually, practitioners work on multiple projects simultaneously. Therefore, consulting managers in audit and accounting firms must plan the pipeline assignments by analyzing the resource requirements. They must also implement suitable measures proactively to bridge the capacity vs. demand gap.

For example, a pipeline audit assignment needs five auditors to complete the tasks successfully. If the manager has ten available auditors, they can bring forward other projects for the extra five auditors or sell their capacity at a discounted rate. Alternatively, if they only have three auditors, a shortfall of two employees can be resolved with internal channels like implementing out rotation and backfill strategy or training/upskilling. If needed, managers can also request HR to initiate project-specific or skill-based hiring to avoid last-minute firefighting.

Identify and allocate cost-effective audit/accounting personnel to projects

Since the accounting sector often utilizes high-cost specialized resources such as actuaries and tax analysts, it is significant to consider the overall resourcing budget while planning to protect the profit margins. In addition, resource planning enables firms to identify cost-effective auditors/accountants with skills matching project requirements once they receive a resource request.

For example- instead of assigning a senior advisory lead to evaluate business transactions, managers can identify and allocate a skilled junior counterpart for the same. It will significantly reduce the resourcing cost, ensuring successful project delivery within the budget. In addition, they should have a sufficient lead time for carrying out planned hiring activities and create an optimum resource mix preventing budget overruns.

Create the right mix of permanent and contingent audit/accounting staff

The demands for specific skills, such as tax advisory, consultants, etc., witness a surge during the financial year-end. Based on the project nature, firms can form a blended workforce to meet these sudden peaks. During this period, contingent workforce can provide additional support to permanent resources or offer specialized services, allowing firms to fulfill client demands more effectively.

For example, an auditing/accounting firm bags a short-term project on filing client’s tax returns and forms. Here, the managers can allocate a freelancer tax analyst and complete the project within the budget. On the other hand, firms can recruit full-time employees for long-term projects, such as the annual auditing for an insurance company for the next 7 years. This will enable organizations to achieve their goals by keeping costs in check, boosting profitability and sustainability.

Set utilization targets for accounting consultants and track them periodically

As mentioned above, audit and accounting firms usually depend on external and internal resources for project delivery. However, if the utilization targets for the accounting employees are not well-defined, it creates operational inefficiencies and low productivity. Therefore, firms need to set utilization targets for permanent and contingent staff to ensure maximum billability.

For instance, the utilization target of permanent consultants can be set around 70 – 80 % of their capacity so that they can be involved in billable and other important non-billable tasks. On the contrary, an on-demand resource’s utilization rate can be set close to 100% because they are usually hired to perform a specialized function for the short term. These measures ensure that both internal and on-demand audit and accounting staff are optimally utilized. In addition, managers should track their utilization levels periodically and implement measures to prevent under/over-utilization.

Implement training and upskilling programs on a regular basis

The rapid emergence of technologies, such as AI, ML, Blockchain, etc., has made it mandatory for accounts/auditors to stay abreast with the latest skills and technology.

A survey reveals that “57% of accountants find technology literacy the most critical additional skill for future employees in this field.”

For this, accounting managers can formulate several training/upskilling programs, IDPs, etc., to align the workforce’s skills with the latest trends. For instance, CAs can be trained in data analytics, which will help them generate financial reports quickly and accurately using multiple data like revenue, expenses, and account budgets.

They can also implement other learning methods, such as peer-to-peer coaching, job shadowing, etc., for the audit and accounting staff. It will prepare them to take up multi-faceted projects in the future and diversify their portfolios. Further, these initiatives will help bridge existing skill gaps, and improve performance, enabling the firms to stay relevant in the digital age.

Facilitate succession planning for critical consultants.

Research reveals- 94 percent of employers report that succession plan has a positive impact on their employees’ engagement.

If critical resources, such as senior auditors, accounts officers, partners, etc., suddenly retire or resign, the projects can derail in the absence of succession planning. It, in turn, can cause revenue losses and negatively impact client experiences for accounting service organizations. To avert this situation, firms can leverage effective resource planning to review key accounting/auditing roles and resources.

Consulting managers can also track the performance of every consultant to identify the ones to be considered for promotion to senior/strategic positions. Moreover, they can also upskill and train the audit and accounting staff to take up higher roles. In addition, it enhances the level of engagement of audit and accounting personnel since they are more focused and eager to take on critical responsibilities. This way, effective succession planning ensures smooth role transition and business continuation.

Empower auditors/accountants to choose the project of their interest

A study reveals- “1 in 3 professionals reveal that boredom is the primary reason to leave their jobs.”

The above stats hold true for the audit and accounting sectors as well. Most accounting professionals work on similar projects that become monotonous over time, affecting their engagement and productivity. To avoid this, managers can give employees the choice to work on assignments matching their interests by publishing open positions with relevant project details periodically.

This would enable audit and accounting employees to show interest and apply for suitable open positions. Managers can then choose the best-fit consultants for the projects. By working on the projects of their interest, professionals will be more motivated, enhancing their performance. Furthermore, it will increase autonomy and help with their career trajectory, resulting in improved retention.

Now that the strategies are understood, let’s know how an advanced resource management solution will help streamline the resource planning process.

How can a modern ERM tool streamline resource planning in audit and accounting firms?

Advanced resource management software provides efficient resource planning capabilities that help audit and accounting firms utilize their resources optimally.

Here’s how-

• It offers 360-degree visibility into audit and accounting projects/non-project activities such as BAU/admin, leaves, etc. Besides, the software helps maintain up-to-date competency and skill information that facilitates the competent allocation of consultants.
• The multidimensional sorting feature, along with advanced filters, helps managers uniformly distribute the employees according to the work requirements.
• Moreover, the forecast vs. actual and utilization reports helps accounting supervisors implement corrective measures and eliminate under/over utilization. It also helps them mobilize skilled accountants from non-billable or admin/BAU work to billable or high-priority projects.
• The modeling and simulation technique enables accounting managers to create and compare various project scenarios and determine the best-fit resource plan.
• The accounting/audit managers can use the open seat feature of the tool to publish various open positions. It will empower auditors/accountants to choose projects of their interest, thus improving engagement and productivity.
• Further, the tool’s collaboration feature helps managers share the lesson-learned reports after completing the project. This report can be referred to by others while working on similar audit/accounting projects and improve resource planning and cost estimations.

This way, modern resource management software can help streamline resource planning in audit and accounting firms.

The Bottom Line

“Planning is bringing the future into the present so that you can do something about it now.” ― Alan Lakein, author

Rightly said, it is essential for audit and accounting firms to create an effective resource plan. It will help unleash the maximum potential of resources and increase their productivity and engagement. However, it is only possible when organizations use robust ERM software to identify and mitigate bottlenecks early. It will help optimize and futureproof the audit & accounting workforce against market volatility, ensuring profitability and sustainability.

So, what’s your strategy to streamline your firm’s resource planning?

The SAVIOM Solution

SAVIOM is the market leader in offering the most powerful and configurable solution for managing your enterprise resources effectively and efficiently. With over 20 years of experience, this Australian-based MNC has created its global presence across 50 countries and helped more than 100 customers achieve their business goals. SAVIOM also has highly customizable products for project portfolio management, professional service automation, and workforce planning software based on business requirements.

While all these advancements have facilitated business to maintain a competitive edge, it has brought forward multiple resourcing bottlenecks. Some of them are suboptimal resource utilization, lowered productivity, frequent hiring/firing, skills shortage, etc. These challenges can jeopardize business profitability and sustainability if not resolved in time.

Thus, firms need to implement a tool that provides real-time insights into necessary resource metrics and help them make informed decisions. This is where a modern resource management solution equipped with Business Intelligence comes into the picture. This blog emphasizes the benefits of using business intelligence in resource management. But before that, let’s get started with the basics.

What is business intelligence and its importance in resource management?

Business intelligence (BI) is a tool that analyzes data and delivers actionable insights in a structured manner to help organizations make informed business decisions. It combines data analytics, data mining, data visualization, data tools, and infrastructure to present meaningful information in the form of dashboards, reports, etc. Upper management, stakeholders, and managers can leverage these reports to minimize inefficiencies, drive change, and more. Over the years, resource management has become very complex as it is no longer restricted to basic scheduling using excelsheets. To manage resources efficiently amid the growing market uncertainties, organizations need real-time data along with past data for quick and informed decision-making. That’s why the Business Intelligence interface has become an integral component of resource management software. Let’s understand its’ components.

Essential components of BI

Business Intelligence is a complex tool and entails multiple components. The following section enlists the most important ones:

Big data

Big data refers to the combination of structured, semi-structured, and unstructured data. It is defined by the three Vs- data with greater Variety, arriving in large Volumes, and with more Velocity. Subject to its volume and complexity, this data can only be analyzed and structured using advanced machine learning and predictive analytics. Additionally, it is extracted from multiple sources such as websites, surveys, etc.

Data warehousing

A data warehouse is a data management system that supports Business Intelligence activities, especially analytics. It contains a large amount of historical data and further runs queries and analysis to extract information. Data warehousing is the process of constructing and using a data warehouse to clean, structure, and consolidate data from multiple heterogeneous sources. The goal of data warehousing is to create a trove of historical data that can be retrieved and analyzed by businesses to improve CRM, product strategies, etc.

OLAP (Online Analytical Processing)

The OLAP is a technology that runs a multidimensional analysis of information from the data cubes (prepared during data warehousing) at a very high speed. Businesses can view information from multiple angles, slice/dice data, etc., and make informed decisions. In addition, budgeting, forecasting, reporting, etc., are done using OLAP.

Reporting interface

Reporting interface in business intelligence denotes the presentation of data to the end-users in a comprehensible manner. Usually, a report is presented in the form of graphs, tables, charts, etc. Also, it can be exported in other forms, such as excel, pdf, etc., to ensure versatile use. Thus, it helps stakeholders understand large sets of data from simple graphs and dashboards within a short duration.

Administrative interface

The administrative interface, as the name suggests, provides server control to the admin. They are responsible for customizing the dashboards as per specific business requirements. Additionally, the administrative interface offers secured role-based access to the users to prevent data breach and information overload. Now that we have read about the essential components of BI let’s look at how it has evolved in the past years.

An overview of the evolution of BI

The evolution of BI can be traced back to Richard Millar Devens’s time, in his book “ Cyclopaedia of Commercial and Business Anecdotes.” In this book, he has explained how a banker beat his competitors by collecting data about recent market trends and altering his strategy. However, the term ‘Business Intelligence’ was only coined later by computer scientist Hans Peter Luhn. Earlier, data from multiple sources were stored in silos, and only a few people with strong analytical skills could collate and translate it into meaningful reports. Around the 1980s, big data came into the picture, and it was stored in data warehouses in an organized manner. However, businesses were unaware of how to use this new technology; thus, it became more cumbersome for them. This challenge was solved in the 1990s when BI 1.0 surfaced, and this period was called the era of BI. Even then, since new technology was a hefty investment, not every business could afford it. Finally, in 2000, real-time data was developed, and managers started leveraging it to make quick decisions. Later on, they were also able to configure the dashboards and reports according to their needs. In 2017, significant advances in BI technology were made that included seamless integration of multiple tools to avoid double data entries and redundancies. As per a study, the Global BI and analytics market is expected to grow to $26 billion by end of 2022 As the business intelligence landscape is constantly evolving, organizations are adapting to it to reach their goals since it provides at-a-glance analysis for decision-making or planning. Owing to these benefits, the BI tool is now integrated into resource management software. The following section explains its benefits in this realm.

Benefits of BI in resource management

Using Business intelligence in resource management offers myriads of benefits to organizations. Here are the most prominent ones-

Promotes data-driven decision-making with real-time insights

With BI-enabled resource management software, managers can get real-time insights into multiple resource metrics such as utilization, availability, capacity vs. demand, etc. They can use the information to implement course-corrective measures ahead of time. For instance, the forecast vs. actual utilization report helps managers understand the actual time taken to accomplish a task against the planned estimates. In case there is a deviation, managers can connect with the employees, understand the reason, and course-correct accordingly.

Provides customized dashboards and reports

The BI Dashboards are typically the product of reporting interface. After the big data goes through data warehousing and OLAP, the insights are represented in the form of graphs, reports, etc. Thus, using that, the resource managers can create or configure the dashboards as per their requirements and view the data. For instance, a resource manager can view the billable, non-billable, and strategic utilization in one graph and understand the resource’s work distribution. Similarly, a project manager can configure the team’s utilization report for their respective projects. Furthermore, the dashboards are built with administrative interfaces that give role-based access and prevent information overload.

Helps prevent resourcing bottlenecks with accurate analytics

When managers create a resource plan based on mere guesswork and intuition, it can lead to certain bottlenecks such as last-minute firefighting, skills shortage, over/under utilization of the workforce, etc. Business Intelligence and its powerful analytics help managers combat these bottlenecks and ensure the project’s success. For example, – When a project manager sends resource requests, it immediately reflects in the project vacancy and demand report. Thus, the resource manager can foresee the resource demand and implement appropriate resourcing measures to fulfill them and avoid last-minute firefighting. Furthermore, resource managers can also procure people on the bench reports that will help them re-train the resources for future projects and minimize bench size.

Futureproof the workforce with actionable insights

The resource management software uses OLAP technology of the BI tool for accurate forecasting. So, using this advanced forecasting, managers get foresight into pipeline project demands in terms of skillset, competencies, efforts, location, etc. Based on that, they can evaluate existing resource capacity against the project demands. If there is a gap, they can initiate upskilling and re-training programs and L&D initiatives to future-proof the workforce and bridge the capacity vs. demand gap. Also, the BI tool updates the competency matrix regularly, which helps managers formulate an ideal Individual development plan (IDP) for each employee.

Facilitates maintaining a healthy resource index

The lack of accurate insights into resource metrics can lead to double-booking or sub-optimal workforce utilization. The over-allocation of resources will lead to stress and burnout, which can even cause unplanned attrition. On the contrary, underutilization of resources will result in disengagement, leading to a demotivated workforce. But, with the help of business intelligence analytics, managers can get accurate updates with the utilization heatmap. It provides them with a comprehensive view of the resources’ utilization rates in a color-coded manner by which they can determine if a resource is over/underutilized. As a result, they can take remedial measures to improve productivity and optimize the resource health index. For example- If a resource is over-utilized, then managers can procure additional resources and adjust the project timelines.

The bottom line

“BI is about providing the right data at the right time to the right people so that they can take the right decisions” – Nic Smith with Microsoft BI Solutions Marketing Rightly said, BI is built to improve and strengthen data-driven decision-making. It provides organizations with the ability to access information critical to their success across a multitude of fields and departments, thereby giving them a competitive edge in the market. So, has your organization started using Business Intelligence-enabled Resource Management yet?

The Glossary

The SAVIOM Solution

SAVIOM is the market leader in offering the most powerful and configurable solutions for managing enterprise resources efficiently and effectively. Having more than 20 years of experience, this Australian-based MNC has a global presence in over 50 countries. It is also popular with more than 100 customers and helps them achieve their business goals. SAVIOM also has products for project portfolio management, professional service automation, and workforce planning software which can be easily customized as per business requirements.

While the reasons for market volatility may differ, the basic principles to curb the damage remain the same. Some of those practices include conducting precise risk assessments, making profitable investments, creating a financial cushion, and regulating project financials throughout a project lifecycle to avoid any budget overruns.

Deploying a software solution that can regulate and automate the entire project ecosystem is the right investment to sustain these difficult times. Professional Services Automation software is one such tool that can monitor and control every project attribute from bid to bill to enhance overall profitability. 

Before delving into the know-hows of the software, let’s understand what exactly is PSA. 

What is PSA?

Professional Services Automation is an advanced tool designed to standardize and streamline professional services operations. With centralized visibility of every business process, it enables managers to examine every detail of the project’s process. This facilitates them to efficiently allocate the resources, reduce resourcing costs, maximize billability, enhance productivity, and potentially take corrective actions to improve performance and client’s experience.  The major benefit of PSA is that it examines every financial attribute of a project and gives actionable insights to prevent budget overruns. From enterprise resource management to team collaboration, PSA covers it all and enhances the productivity and profitability of a modern professional service business. 

Here are the financial aspects of a project-management cycle covered by PSA:

Project planning 

Project managers have a lot to consider while planning a project. From project estimation to scheduling and from risk management to allocating the right resources at the right cost, every detail has to be covered to ensure the project’s success. Having disparate solutions and tools for each function is time-consuming and creates silos. PSA eliminates the need to diverge to multiple tools and provides a unified solution for all. 

Based on the previous project’s history and by pulling data through different sources, you can plan for your future projects efficiently. Using refined work breakdown structures will facilitate you to design schedules for every task and allocate competent resources for the stipulated time at the right cost. Managers can extract data from their existing accounting software as different software can be integrated seamlessly or they can even input the data in the system manually. 

What’s more? To maximize revenue and enhance profitability, you can generate task-specific timelines to ensure progress stays on track and is accomplished in the given cost and time to avoid incurring any loss. 

Project accounting 

Often project financials are overlooked in order to stay on the course of the project’s timeline. This will consequently reduce the overall profitability of the project. Managers, therefore, need to get a fix on project costs and expenses in real-time. If the expenses shift from what is estimated during the planning stage, they should be able to take corrective measures ahead of the curve. 

The project accounting aspect of PSA is designed to assist you in this. It gives you real-time insights into project budgets and profit margins. With a configurable timesheet interface, you can track the actual worked hours and compare it with the planned timeline to verify if it’s accurate. Even better, with intelligent ‘forecasted v/s actual’ reports, you can easily view the difference between allocated hours and actual hours logged in by project resources. This will ultimately inform you of the billing loss or profit that you have incurred. 

You can also capture and record project expenses using the expense reporting interface tracked against specific project tasks. This saves time and improves accuracy as it eliminates the need for manual data entry. Overall, a PSA tool gives you leeway to regulate project costs in real-time and protect the financial health of your project. 

Managing billing contracts

Every client has different demands and expects the decision-makers to tailor the contracts accordingly. Customizing these billing models manually is a tedious process and also increases administrative overhead. The automation of these billing processes will minimize errors and simplify things for project managers. 

A Professional Services Automation platform provides you the liberty to attune the billing contracts that align with your customer’s needs. Whether you are dealing in time and material, subscription-based models, or any hybrid model thereof, you can accommodate any billing structure. You can also model these billing contracts with different billing rates and engagements seamlessly. In addition, you can also easily alter the amount or cost in case of any ad-hoc changes in real-time to expedite the billing process. 

There’s more to it! You can also set-up notifications for recurring invoice schedules or when a milestone is reached to not miss the deadlines. Aligning the approval process in compliance with the contract can also be automated. All this functionality will help you convert the data into billable information without a hitch. 

Automated invoicing

Instead of having to send information manually from one team to the next, be it sales, or consultants, or the finance team to build an invoice for the client, it’s more convenient to view the data on a unified platform. This will quicken the invoicing process and eliminate inaccuracies. At the same time, custom-made invoices built for clients makes it convenient for them. 

Automating these processes adds precision and adequacy to documentation. Deploying a PSA tool is beneficial because it provides everything you need for invoicing under one umbrella. 

Beginning with having multiple invoicing options at your leverage, for varied contracts like time and material, fixed fee, and ad hoc amounts. Let’s understand them in-depth.  Time and material imply billing against the hours logged in by workers and materials used to perform the project tasks. This is generally used for construction projects. Fixed fee invoicing is based on estimates and cushion (buffer) added by vendors. The invoicing is done before the project begins based on estimations. This type of invoicing generally used in IT projects so that clients do not pay for vendor’s mistakes (budget overruns)

Additionally, you also have the luxury to add varied invoice frequencies based on milestones or invoicing schedules or any ad hoc needs. You can bill the client incrementally on the basis of percentage of work done from the total (progressive invoicing) or generate an invoice in advance (advance invoicing) and you can add credit notes and drawdowns as well. To top it all off, you have a range of saved preconfigured templates at your advantage to send across the final invoice to the client. 

Advanced reporting and analytics

Fluctuating demands is the norm in project-based industries., Managers need to stay proactive and make decisions to meet these dynamic needs. Foresights into resource demands, their billable utilization, and gaps between demand and their capacity enable you to apply resourcing treatments in time to avoid unnecessary hiring/firing costs. 

A PSA tool with the help of Intelligent forecasting & analytics and business intelligence empowers your decision-making with real-time insights into critical project metrics. You can track project margins, resource utilization (billable and non-billable tasks), work in progress, and more in sync with the project’s progress. This data can also be visualized using customizable dashboards and reports to get the bigger picture. 

This comprehensive analytical report that touches the base of every niche lets you take strategic decisions to improve overall revenue. One, you can control project expenses well ahead in time with early warnings on budget overruns. Two, you can allocate resources that are likely to be on the bench down the line to the project vacancies. Also, with a built-in drag and drop functionality, you can schedule resources and meet the changing resource demands. The advanced features and intelligent reports facilitate you to make better resourcing decisions when you are pre-informed of the demands and capacity of the resource pool. Three, with a single source of truth and enterprise-wide visibility, you can visualize and move the highly skilled resources to billable tasks and re-assign non-billable tasks to lower-cost resources to close the demand gap and maximize billability. 

The Summary

In a nutshell, PSA is an all-inclusive solution to systematize financial management in the modern professional service firm. The advanced software which is an integration of project-resource management aspects aims to enhance the bottom-line of the business.

Advanced analytics and business intelligence enhances the overall experience of managers and propels data-driven decisions. Using this tool to your advantage will increase the profitability of your project and help you future proof your business in grim times. Additionally, equipping this tool will also facilitate you to modernize your business process and adapt to the dynamic business landscape, eventually steering your business through greater heights!