Are you struggling to fulfill the surge in consultants’ demand during peak season?
Is your accounting firm encountering frequent hiring/firing cycles?
Struggling to mitigate the skill gaps of accounting professionals?
If you experience these concerns, then it indicates an inefficient capacity planning process. As a result, firms face difficulty maintaining a pool of skilled professionals, which can affect their operational efficiencies.
Therefore, implementing a well-defined capacity planning process can help these organizations overcome the above roadblocks effectively. It further helps audit and accounting companies build a future-ready workforce and beat market uncertainties.
This blog elucidates the six best methods to manage capacity planning bottlenecks and how SAVIOM can help.
Let’s get started!
2. Capacity planning challenges in audit & accounting firms
The capacity planning process allows audit and accounting organizations to predict the gap between future demand and workforce capacity. However, accounting managers encounter certain obstacles during the capacity planning phase.
Firstly, a lack of foresight into audit and accounting pipeline project demand results in improper resource planning and inaccurate estimation. This leads to a shortage/excess of consultants, skill mismatches, unavailability of skilled professionals, etc.
Moreover, when there is a shortfall of consultants, managers resort to last-minute firefighting, which can compromise the project quality and delay the timeline, leading to client dissatisfaction. Conversely, when there is an excess of professionals and fewer projects to work on, consultants are not utilized optimally against their capacity, resulting in lowered productivity. This can lead to an increase in employee turnover, affecting the organization’s bottom line.
Furthermore, due to an ineffective capacity planning process, the audit and accounting industry are unable to meet seasonal demand fluctuations. This leads to excessive hiring/firing cycles, hampering the organization’s reputation.
Now that we know the challenges, let’s delve into the various measures to overcome them in the audit and accounting industry.
3. 6 strategies to address capacity planning bottlenecks
Here are some techniques that will help audit and accounting organizations combat the capacity planning challenges effectively:
3.1 Gain visibility into pipeline project resource requirements
When accounting managers have foresight into pipeline project requirements, they can conduct a capacity vs. demand gap analysis to identify whether they have excess or deficit of resources. Based on that, they can formulate a robust strategy ahead of time to bridge the resourcing gaps proactively.
For instance, when there is a shortage of accounting professionals, managers can implement training, out rotation and backfill strategy, or conduct planned hiring. Conversely, for the excess of staff, they can bring forward the project timelines or sell the extra capacity at discounted rates. This will eliminate project delays, budget overruns, last-minute firefighting of consultants, etc.
3.2 Apply appropriate resourcing treatments proactively
The financial sector embraces emerging technologies like AI, Big data, IoT, etc. Therefore, it has become imperative for accounting professionals to possess the relevant skills to remain relevant in the industry.
So, managers can identify in-demand competencies and implement appropriate remedial measures to eliminate skill gaps. For this, they can develop various L&D programs such as- IDPs, on-the-job training, shadowing opportunities, peer-to-peer mentoring, etc. This will help future-proof the workforce and give a competitive edge to the firm.
3.3 Maintain a balanced mix of contingent & permanent consultants
The audit and accounting organizations face a surge in the demand for consultants during the fiscal year-end. To meet the project demands during the seasonal fluctuations, the accounting managers must identify if the projects are one-off or recurring. Accordingly, they can form a mix of on-demand and permanent professionals and fulfill the client’s requirements.
For instance, during the tax season, the firm can deploy on-demand tax consultants to manage the additional workload. It will ensure timely project completion without overloading the permanent employees. This way, firms can maintain an even workload balance, optimize productivity, and boost client satisfaction, leading to profitability.
3.4 Leverage cost-effective global accounting & auditing staff
According to a Glassdoor survey, “the average salary for an Audit Consultant is $88565 per year in US.”
Most professionals in audit and accounting firms have a high-cost rate due to their niche skills and expertise. Additionally, growing global competition and the limited supply of these professionals has resulted in an increase in the cost of hiring and retaining a skilled workforce.
Therefore, it is essential for these firms to leverage competent global consultants from low-cost locations. Doing so will help minimize the resourcing cost and maintain the project’s financial health. Further, it will ensure delivery of projects without compromising on the quality, thereby increasing profitability.
3.5 Improve billable utilization of auditors & accountants
One of the accounting manager’s major responsibilities is maximizing the profitable use of resources. For this, they need to have a visibility into the current and future schedules of the consultants. This will allow them to understand the resource’s billable and non-billable activities.
Accordingly, managers can increase the billability of consultants by mobilizing them from non-billable to billable and strategic tasks. As a result, consultants are utilized up to their maximum potential, increasing their productivity and engagement. This ensures the successful delivery of projects, leading to increased ROI.
3.6 Ensure even workload distribution for all the personnel
When consultants are booked beyond their capacity, it leads to overutilization, resulting in stress, burnout, and unplanned attrition. Conversely, when they are underutilized, it can lower their morale and productivity. Therefore, managers must regularly track the utilization levels of the professionals and take measures to maintain the resource health index.
In instances of overallocation, managers can apply various optimization techniques like- resource smoothing and leveling, where they can either adjust the project timelines or add more resources. Alternatively, they can also bring forward project schedules and initiate training to combat the under-allocation of consultants. This will ensure even workload distribution and completion of projects within the time and budget.
These are some of the best practices to combat capacity planning challenges. Let’s know how advanced ERM tool can help.
4. How does advanced resource management software help combat capacity planning challenges?
Implementing a futuristic resource management tool can help to overcome capacity planning bottlenecks effectively. The software offers advanced features and functionalities like:
- 360-degree visibility helps identify and assign consultants to projects based on their attributes like competencies, cost, availability, etc. Further, the advanced filters allow firms to leverage cost-effective global resources.
- The tool also provides a capacity vs. demand report that helps managers foresee future demand and identify shortages/excess of skilled professionals. Accordingly, measures can be taken to bridge the gaps.
- Real-time BI reports, like utilization, forecast vs. actuals, etc., provide insights into consultants’ utilization and allow managers to take corrective measures to prevent over/under allocations.
This is how a resource management tool enables audit and accounting firms to have the right workforce and deliver projects successfully.
Skilled professionals are the backbone of the audit and accounting sector. Therefore, it is essential for these firms to utilize the workforce to their maximum potential. Following the above strategies combined with a next-gen resource management tool can help this industry futureproof the consultants, improve profitability and business efficiency.