AAM Session Overview: Trashing The Timesheet

This is the sixth of a series of articles on sessions presented at the 2002 Association for Accounting Marketing Conference.


By Karen Bergh, Senior V.P., RainMaker Pro, Inc. for the Association for Accounting Marketing

Ron Baker, Founder of VeraSage Institute, shared in his topic "Trashing the Timesheet" his philosophy of how accountants should free themselves from the "tyranny of time" as an indicator of performance.

Baker suggests that Key Performance Indicators (KPIs), especially those that are "leading" rather than "lagging" should be used rather than timesheets to measure the productivity of team members. The advantage of KPIs over timesheets, he said, is that they measure:

  • results, not efforts;
  • productivity, not activity; and
  • outputs rather than inputs.

A leading indicator would be one that is production oriented, whereas a lagging indicator would reflect measurements "after the fact." For example, lagging indicators that economists use are "unemployment rates" and the "prime rate." Leading indicators would be those like "new orders," or "building permits".

Baker used the example of Continental Airline’s leader Gordon Bethune, who wrote a book about the airline’s turnaround under his leadership entitled "From Worst to First: Behind the Scenes of Continental’s Remarkable Comeback." Using Bethune’s story, Baker pointed out how the airline improved its financial performance by defining its success by the same measures that its customers do. Under Bethunes’ tutelage, the airline began to run according to KPIs that showed how they were performing in such areas as:

  • on-time performance (flights arriving on time);
  • lost luggage; and
  • customer complaints.

Baker suggested there is a high correlation between such measures and profits. He conducts workshops to help accounting firms identify their own unique KPI measures. Many accounting firms continue to use lagging indicators, such as "labor as a percentage of gross revenue" or "cycle time" (the number of times a file was "handled" and the average number of days work stays within the firm) which are not necessarily the best measures to promote profitability.

In his work, Baker asks CPAs to assume that timesheets are not available to measure and compare the profitability, productivity and efficiency of your firm. He then challenges his clients that if this were indeed the case, what measurements would you look at? Baker asserts: If time were no longer needed for pricing purposes, what indicators would you look at to measure the effectiveness of the firm’s ability to fulfill its mission?

Baker’s own mission is to change the accountant’s mindset that “we sell time.” He suggests that we should be selling value, and that like Continental Airlines, that value should be measured in our customers’ terms.

He also shared with us the top reasons why clients leave their accounting firm (source unknown):

1. Doesn’t treat me right
2. Ignores me
3. Fails to cooperate
4. Let partner contact lapse
5. Doesn’t keep me informed
6. Assumes I am a technician
7. Uses me as a training ground for new team members

He also cited the Rockefeller Corporation’s study of why customers are lost:

1. Dies 1%
2. Moves away 3%
3. Has a friend 5%
4. Lost to a competitor 9%
5. Dissatisfied with service 14%
6. Believes you don’t care 68%


Ronald J. Baker started his accounting career in 1984 with KPMG Peat Marwic's Private Business Advisory Services in San Francisco. Today, he is the founder of the VeraSage Institute, a think tank dedicated to teaching Value Pricing to professionals around the world. For more information on Ronald Baker or VeraSage Institute contact 770 Tamalpais Drive, Suite 221, Corte Madera, California, or 415.927.7114. Web site: www.verasage.com

Visit the AAM Web site for more information.

The Association for Accounting Marketing (AAM), headquartered in Kansas City, Missouri, is the leading trade/educational organization for individuals working in marketing, sales, and communication for accounting firms. Since 1989, AAM has provided members with the information, resources, and market intelligence needed to excel and grow in their careers.

For more information about joining AAM or to be placed on a mailing list for next year’s Marketing Summit in Boston, MA in June 2003, contact Lisa Daniels at 816.221.1296, or lisa@accountingmarketing.org.

You may like these other stories...

For the first time in the five-year history of Vault.com’s rankings of the top 50 accounting firms to work for in North America, a firm has held the top spot as best accounting employer for two consecutive years....
With tomorrow being Tax Day, you might see some procrastinators at your office filling out forms, printing out paperwork, or getting last-minute tax advice from their accountant so they can meet the IRS’s filing...
You can read volumes on how to manage an accounting practice. But if you want the quick version, just read the following four points. Everything else is just commentary.  (These points come out of the 1997 book, The...

Upcoming CPE Webinars

Apr 22
Is everyone at your organization meeting your client service expectations? Let client service expert, Kristen Rampe, CPA help you establish a reputation of top-tier service in every facet of your firm during this one hour webinar.
Apr 24
In this session Excel expert David Ringstrom, CPA introduces you to a powerful but underutilized macro feature in Excel.
Apr 25
This material focuses on the principles of accounting for non-profit organizations' revenues. It will include discussions of revenue recognition for cash and non-cash contributions as well as other revenues commonly received by non-profit organizations.
Apr 30
During the second session of a four-part series on Individual Leadership, the focus will be on time management- a critical success factor for effective leadership. Each person has 24 hours of time to spend each day; the key is making wise investments and knowing what investments yield the greatest return.