Three Steps to Creating More Cash Flow in Your Firm Through Improved Workflow Efficiency
Do you think about implementing technology as solely an expense for your firm? Something that you have to invest money in so that you can do the work that your firm needs to do? If that’s the case, then you may not be realizing the true gains of the solutions you are using in your workflow—or reaping the better cash flow they could be making possible. So how can your firm maximize the efficiency and cash flow potential of your tech stack as a money-making initiative in your firm? Here are three key tips, using a practice management solution as an example.
Approach workflow efficiency gains as a tool for better cashflow
When you start adding up the time needed in each step of your firm’s workflow—especially those tasks which are not yet automated such as client communication and reporting on the key performance indicators of your practice, you will have a good estimate of how many billable and non-billable hours are spent on each one. When you tally them up and multiply by the hourly rate you or an employee would be paid for doing them, it’s easy to see how much cash is actually tied up in routine tasks which could be part of a more efficient and automated workflow.
A good first step in this direction is to implement an accounting practice management solution that can deliver these kinds of insights into the productivity of both people and processes in real time. This will allow you to identify the tasks and workflows where there are hidden inefficiencies which you can automate and streamline, reducing their financial impact on your firm.
Reduce the steps in your workflow to eliminate excessive overhead expenses
Following from the first tip, to make your firm’s cash flow more fluid through identified workflow efficiencies, it is critical to identify the goal you have for eliminating steps in each of your workflow processes. By reducing the amount of time and the number of steps in your workflow, you can eliminate the excess overhead expenses which may be eroding your revenue and thus reducing your cash flow.
Download our free whitepaper The Road to Smarter Cash Flow to learn about one firm’s path to smarter cash flow, and the key requirements you should look for in a payment solution.
Reallocate billable hours from non-productive tasks to client deliverables
Once you have identified and reduced the inefficiencies in your workflow, you will be able to fill the otherwise non-productive hours you have saved with billable hours devote to client deliverables—the services and offerings that your firm actually gets paid to do! This is when the positive cash flow effect can be realized and your firm has the potential to truly reap the gains available from automation and improved workflow efficiency.
In addition, with a practice management solution in place which allows you to monitor and track your progress in the efficiency of your client service delivery and specific workflows. You’ll also be able to understand the areas of your firm where you need to further improve your workflow efficiency and where there are opportunities to impact your firm’s cash flow in even greater ways by using the time and resources saved in this process. This could include adding new and profitable accounting client advisory services, for example, which maximize the revenue earned on each billable hour.
As you can see, the three simple steps above can have an exponential impact on both the efficiency of your firm’s workflow and the capabilities of your firm to increase its cashflow. The key is approaching the investment in each component of your tech stack as a tool for maximizing the efficiency of as many of your firm’s workflows and processes as possible while also shifting the time saved to revenue-producing activities—all while using real-time, accurate data to ensure you are seeing the types of gains you are expecting based on your overall practice goals.