In this article, we discuss why practical resource allocation matters and how software can be used to optimize your firm’s allocation process.

What is resource allocation?

Resource allocation is strategically selecting and assigning available resources to a task or project to support business objectives.

In the context of accounting, resource allocation deals with assigning people and their skills to projects, also known as engagements. The essence of optimal resource allocation for any accountancy firm is matching the right people, with the right experience, qualifications, and skills with the right client and task, at the right time.

Resource allocation vs. resource scheduling

Resource allocation also considers the availability, capacity, and utilization of resources across a firm but should not be confused with resource scheduling.

Resource scheduling is a crucial part of the resource planning process and usually follows resource allocation. Once resources have been identified and allocated based on the best match of skills and experience for an engagement, a resource manager will then schedule these resources for a specific time and task. The resource scheduling process should ensure that the resources with the necessary skills, experience, and qualifications are scheduled for the right task and at the right stage of the engagement.

Why is resource allocation important?

  • Effective resource allocation should ensure work is divided evenly among all resources to prevent staff burnout.
  • Effective resource allocation should empower teams by ensuring resources have the skills, knowledge, and training necessary to complete allocated work.
  • Effective resource allocation should ensure engagement performance is optimized by matching the right resources, to the right task, at the right time.

In the delivery of any project, poor resource allocation will knock on overall performance. Without the right skills or knowledge on a project, efficiency, time, confidence, and motivation can be lost along the way.

An optimal resource allocation process in accounting is critical to empower teams, prevent burnout, and ensure engagement performance. In this context, resource allocation is not only an essential resource management process, but it is also a critical lever for growth and success. The ability to effectively and consistently allocate the right resources to the right task at the right time is at the core of every successful and profitable client engagement. When a firm allocates its resources, it matches the resources that will be dedicated to achieving client and business objectives.

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Benefits of effective resource allocation

Getting resource allocation right isn’t always easy, but when done right, effective resource allocation can provide many benefits. Some of the key benefits include:

Staff retention

Poor resource allocation can contribute to a burned-out workforce. A survey of 1,222 UK accountants and ACA students from the accountancy well-being charity CABA found that two in five accountants feel too emotionally drained from working. When asked about the cause of the stress, 33% reported their work, career, or studies as the root cause.

A firm can use the proper resource allocation process to drive better resource utilization, employee satisfaction, and retention. An effective allocation system will optimize resource utilization rates without overburdening your people. Effective resource allocation methods will also prevent other capable and available resources from being overlooked, ensuring tasks are assigned fairly and strategically. In addition, your firm can better support professional development and retention by considering individual preferences, interests, and career aspirations when allocating work.

Client satisfaction

Resource managers’ key focus is ensuring that their clients are provided with the best teams possible, combining industry experience with the right skills and accreditations to ensure maximum quality and efficiency.

Best is subjective, but clients will expect to see individuals with the right qualifications and experience assigned to deliver their engagements. That means those with appropriate skills, insight, and knowledge relevant to the client’s specific business and industry. This could include a combination of technical skills or sector experience, particularly the ‘soft skills required. But these skills do not all have to reside in one person, location, or timezone. An optimal resource allocation system will ensure these details are considered and identify a team with the most appropriate cross-section of skills to deliver each project stage. A resource management system that can utilize your people in the best way will benefit staff and client satisfaction alike.

Profitable engagements

The ability to allocate the right combination of resources across multiple, complex engagements requires in-depth and up-to-date knowledge of your resources’ skills, capacity, and availability. It also requires the ability to accurately predict resourcing decisions’ impact on engagement performance.

In the long term, a practical resource allocation strategy can help your firm to strike the right balance between over and under utilization of resources. Maintaining this balance reduces the risks of overburdening your team or overspending on resources that are not required. Ensuring that the right resources are allocated to the proper engagement at the right time also increases efficiency while reducing the risk of overruns. The combination of greater visibility across all resources and engagement financials helps to ensure projects remain profitable and on schedule.

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How can software optimize your resource allocation?

Optimizing resource allocation can be incredibly challenging when you consider the number of moving parts required across multiple large-scale client engagements. An intelligent resource management software solution can help your firm to overcome these complexities and allocate your resources strategically.

Reduce admin via automated best-match resource allocation

Resource management software can allow you to reduce the admin burden on your team and optimize your resource planning with automated best-match resource allocation.

To streamline the allocation process, resource management software can automatically identify the best people for the job using suitability scoring to ensure that the right skills, qualifications, availability, location, and all of your critical criteria are accounted for. By streamlining this decision-making process and reducing manual steps, resource management software can also increase efficiencies and save resource managers time to focus on more strategic tasks.

Easily explore alternative resourcing decisions with greater visibility.

One of the biggest opportunities for optimizing resource allocation is to assess your resources across the broadest pool of staff possible. By having all of your resources in one scheduling software, you can expand beyond local resource allocation by looking at skills, expertise, and availability at a national and global level. This visibility supports a more agile and informed decision-making process.

It’s not unusual for unexpected changes or an engagement to suddenly require additional resources. Intelligent resource management software allows your firm to explore various staffing options and adapt to changing demands without disrupting existing schedules. The more visibility a firm has over its available resources at any time, the easier it becomes to explore alternative resourcing decisions should changes be necessary. Filters and automated alerts can also identify clashes within the schedule, allowing resource managers to prevent or resolve conflicts in real-time.

Track skills and preferences to support fulfilling careers

Resource allocation software can help your firm to support career development and staff retention efforts by allowing resource managers to consider skills and individual preferences when allocating work in the system. In addition to attracting and retaining talent, the ability to match skills and preferences to the work assigned will contribute to higher-quality engagements and provide greater visibility of skill shortages.

Resource management software can also empower your teams by allowing them more autonomy in the work they are involved in. During the allocation process, individuals can highlight the types of tasks, engagements, or industry they are interested in from the available and unassigned work aligned to their grade, location, and business unit.

Increase transparency within the resource allocation process

The business benefits of a more diverse and inclusive workplace are far-reaching. They have positively impacted overall performance and productivity, staff engagement and retention, client relationships, and firm culture.

We’ve previously written about the diversity problem in accounting and questioned how technology could play its part in redressing the balance. An automated resource allocation system can help reduce human bias or favoritism by prioritizing capacity alongside the best match of skills and experience for an engagement. With the right resource allocation tool and governance in place, staff can see that work is assigned based on set criteria rather than connections, preference, or recency bias. Offering this transparency within the resource allocation process is increasingly important for creating a more fair and inclusive workplace.

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Final thoughts

Whether your firm has 20 or 200 resources to manage, effective resource allocation depends on the ability to identify, match, and utilize your teams’ skills and capacity alongside client demand. With the right resource management tools in place, resource allocation optimization can be crucial to drive more profitable engagements, improve client satisfaction, and keeping your teams happy.

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