Faced with high turnover caused by the constant pressure on employees to generate billable hours, the Reno certified accounting firm of Mark Bailey & Co. threw away the time sheets.
Simple? Hardly.
The company, recognized this month by Accounting Today magazine as the best small accounting firm to work for in the United States, found it needed to change many of the ways it did business after it burned the time sheets about three years ago.
Mark Bailey & Co. now provides accounting and auditing services for a fixed price that's established before the work begins. It doesn't bill clients by the hour.
Marty Weigel, a partner in the firm, says the company was unable to find off-the-shelf software to manage its new way of doing business, so staff members needed to develop performance indictors and estimates of projects costs and profitability on their own.
Even more critically, Weigel says, the company needed to learn how to write carefully detailed agreements with its clients to make sure everyone knows what's covered by a fixed-price accounting engagement before accountants dive in.
The payoff for Mark Bailey & Co. has come in dramatically lower turnover because it's able to promise its staff a reasonable balance between their carreers and their lives.
Mark Bailey, the firm's general partner, says turnover at accounting firms can run as high as 80 percent within five years mostly because young accountants are under heavy pressure to generate billable hours.
"For a smaller firm, that's a huge problem," Bailey says.
Because the Reno firm moved to a fixed-price business model, accounting professionals now can work flexible work schedules. Just as important, Weigel says, they know what is expected of them without a need for heavy-handed management.
"People don't respond well to that," he says.
The structure also gives the firm's management flexibility to ask professionals what projects interest them and assign work accordingly.
That work has been growing. After it implemented fixed-price proposals, Mark Bailey & Co. doubled its revenues, doubled its number of clients and doubled its staff.
That work, Accounting Today noted, provides enough variety to keep accounting professionals from boredom. About half the firm's work these days comes from public companies ranging from software companies to military contractors across the United States.
Another way the firm keeps its skills fresh: It hires university professors to act as mentors and identify new ways of doing business.
But in the end, Weigel says the elimination of time sheets was the key.
"That," he says, "allowed us to change the management model."
