- Your employees can now be more productive than ever before, but Vicky Skipp believes most firms aren’t taking advantage.
- Optimising for productivity and profit requires matching incentives to results, including pay.
- Firms that implement these structures not only maximise their tech ROI, but retain talent better.
Changes in technology require accounting firms to review not only their internal processes relating to workflow and business management, but to also examine their working environment, including employee reward and engagement practices in order to maximise opportunities.
Cloud-based tools now automate some of the most time-consuming activities in an organisation, such as the collection and processing of financial transactions. Where once you might have paid someone to chase, collect, read, enter and store receipts and invoices, that time is now suddenly freed, drastically increasing what can be done in an hour.
Vicky Skipp, VP Sales APAC at Receipt Bank, believes there is huge untapped opportunity in rethinking traditional time-based pay.
“The traditional system does nothing to incentivise the increased productivity that automation makes possible, and it does little for attracting and retaining the best talent, which is critical in the current environment as individuals tend to change jobs frequently,” says Skipp.
Performance-based pay is the future
Value-based pricing uses the buyer’s perception of value, as opposed to the seller’s cost, to set the price of a product or service. Skipp believes that similarly, accounting firms should adopt value-based pay to reward their employees based on the value they bring to the business.
Skipp is an advocate for incentivised pay, which ensures the amount an individual earns is relative to his or her results, profit or performance. She discusses the difference between short-term schemes, like bonuses and commission, which motivate employees to hit or exceed targets. “On the other hand, longer schemes, such as profit sharing, help get an employee invested in the success of the company,” she says.
Automated bookkeeping removes the variation in quality and the turnaround times associated with previous accounting practices. Businesses that have already adopted automation can take advantage of more up-to-date information taking less effort to obtain.
Firms that have adopted this more efficient way of working can begin to meet their productivity potential by implementing new ways to track, review, and analyse productivity.
“As a business, you could consider switching to customer service focused service-level agreements (SLAs), tracking new process implementation of the new systems and switching up your key performance indicators to measure performance against your pre-agreed SLAs and turnaround times,” Skipp suggests.
There are many ways businesses can create performance incentives, and Skipp provides examples.
1. Determine monthly revenue targets for each employee
Firms can incentivise employees by multiplying the employee’s regular hours by the charge-out rate, says Skipp. Anything the employee makes above this figure could then be split 50/50 with the firm. It is important to adjust for seasonality in each month.
2. Use a Net Promoter Score (NPS) system
Skipp suggests based on NPS survey results, the employee with the best score will receive a bonus. As a result, individuals will be motivated to offer not only a more efficient service, but a better one.
3. Monitor the bookkeeper to client ratio
Track the bookkeeper to client ratio for each employee, and set a bonus for the bookkeeper who is able to increase their client numbers by the highest proportion, suggests Skipp. Employees will be incentivised to increase productivity by managing more clients.
Next steps for firms
Switching to cloud-based solutions is the first step towards creating a productive workforce, Skipp believes. Once businesses have achieved this, they can turn their attention to motivating employees, driving increased productivity, and producing more impressive business results.
In the current times, Skipp says that firms that fail to get on board with these productivity practices will likely find themselves unable to compete with the more tech-savvy businesses, and risk losing their best employees to competitors offering more recognition for individual performance.
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