Originally featured in AIT.
Delivering consistent engagement performance has become an increasingly complex nut to crack. Accounting firms of all sizes are battling against budget write-offs, cost increases, skill shortages, and “the Great Resignation.” These pressures mean that inaccurate forecasting and lack of visibility and control over engagement financials is a key challenge for firms.
Evidence from the Big Four accounting firms in recent years supports this by showing cost overruns in up to 50% of audits. This, and the fact that budget write-offs in the hundreds of millions are now commonplace, suggests that the standard approach to engagement performance is in need of transformation. So how can firms keep their engagement financials on track?
Andrew Bone, former Big Four chartered accountant and CEO and Co-Founder of Dayshape shares his insight.
“Despite profitability being a top priority for accounting firms, many continue to track the financial progress and performance of their engagements using manual spreadsheets or siloed software. This means engagement information is static and changes to resource plans are not always accurately reflected in predicted totals. Managing engagements in this way means true performance only becomes clear after the engagement is complete.
To deliver profitability, engagement teams need the ability to accurately plan, predict, and prioritize engagement performance and proactively prevent projects from going off track. Dayshape’s AI-powered engagement planning and resource management software solution, has developed unique engagement economics functionality to help firms to evolve beyond spreadsheets and static engagement management.”
Dayshape’s engagement economics can help to deliver more profitable engagements in 4 key steps
1. Plan accurate and optimal engagements
For optimal profitability, engagements must be planned accurately, managed efficiently, and use the right people and skills at exactly the right time. When firms go through their planning cycles, tens of thousands of budgets may need to be scheduled for the coming year. This often results in many hours being consumed by endless iterations and meetings. It’s in this scenario that engagement economics can offer immediate and significant efficiencies.
Dayshape provides firm-wide visibility of resources, the ability to create engagement plans, make resourcing requests, and manage budget approvals in the same place. Using existing or past engagements as a template, engagement managers can also take engagement plans for similar projects, roll them forward, and save valuable time during the planning stage.
2. Prioritize people, profit, and client service objectives
When scheduling, engagement managers must make key decisions about which objectives to prioritize to maximize performance. Once the engagement is in progress engagement teams also need the ability and autonomy to reprioritize and make the right adjustments to keep projects on track. Dayshape’s engagement economics can allow these decisions to be made confidently by surfacing the impacts resource changes have on both utilization and profit in real time. This visibility empowers firms to make decisions which are more consistent and aligned to the area they need to prioritize.
3. Predict engagement performance in real time
Without insight into dynamic project conditions, it’s near impossible to accurately monitor and predict engagement financials in flight. Settling for reporting against month-old forecasts means it’s too late to take action to rectify issues. Dayshape provides engagement managers a crucial advantage by allowing them to compare actuals against their forecast in real time. With easy access to the forecast and recovery-rates across projects, engagement performance becomes more predictable. Engagement performance can also be analysed year on year, this allows teams to better predict performance outcomes and make adjustments to optimize as necessary.
4. Prevent overruns and budget write-offs
When engagements are taking up more valuable resources than anticipated, and costs are rising higher than planned, the earlier this is flagged, the better. A key benefit of engagement economics is the ability to automatically identify which projects are underperforming, are likely to overrun, or have the greatest recovery rate. This insight enables engagement managers to prevent problems from emerging at the last minute, avoiding unnecessary write-offs and reduced margins.
With greater control and awareness of how engagement financials are tracking, teams can spend less time firefighting and more time delivering the best possible engagement performance for their clients.
Download the full guide to learn how to use engagement economics to enhance visibility, control, and profitability across your firm’s engagements.
