Spotlighting Issues in Your Firm Using Strategic Data Analytics Part 2: Capacity

by Steve McDonald, CPA

The work we do as CPA firms is constantly in flux, which makes gauging staffing capacity a constant challenge. The line between over and under budget is a hard one to walk. Yet knowing where we stand capacity-wise lets us determine if we need to accelerate or decelerate our hiring or reallocate staff members. This is where our strategic data analytics solution, Compass, has proven invaluable.

Previously, we felt one step behind when making capacity adjustments, much like how we felt about our firm’s productivity.  Now, with the real-time, objective data we get from Compass, we’re able to make decisions more quickly—ones that are more in line with the needs of our departments.

How we used Compass to identify and solve capacity issues

Before implementing Compass, when our billable hours ran over budget our response was to simply hire more staff. But it’s a tough balance to find the right number of employees. Sometimes we would end up hiring fewer employees than we needed, or vice-versa.

With the visualization Compass provides, we can now see the need to hire additional staff before it arises. This has been transformative. Not only are we able to address budget concerns on the front end, but we also can appropriately allocate staff across our departments.

On the flip side, having excess capacity can present challenges, too. Compass allows us to address these by giving us a way to start the conversation. If we see excess capacity in a certain department, we can go to the department leader and have a conversation about it. Through dialogue, we can come up with a plan to close capacity gaps.

Talking about capacity has also allowed us to identify cross-selling opportunities. As a result, we’ve been able to better advertise the consulting services we offer that benefit all the clients we serve.

What could Compass reveal about your firm’s capacity?

Balancing staff numbers is one of the toughest challenges facing CPA firms today. Being able to stay in front of this ever-moving target has allowed our firm to pivot more quickly and, in many instances, increase sales across multiple departments. It’s also helped us better understand employee performance, which is the data point we’re spotlighting in Part 3 of this article series.

If you have questions about how Compass could help you address your firm’s capacity challenges, please know we’re here as a resource. Contact us today.