The Artful Insighter for Accountants "Where do you stand in the digital age?" - Part 3 (by Instruo)

Back once more with a springy step. We've lept onto the "KPI train" once again.

In part 1, we brought to your attention 3 specific KPI's, relevant to any Accountancy practice.

We have another 3 KPI's on the menu this time for part 3 and we will delve into why these are crucial in helping us track the progress of our Practice performance.

Metrics allow us to measure our progress in achieving our goals. There are metrics which generally affect the output, known as lagging metrics and metrics which generally influence the input, known as leading metrics.

We may want to increase the number of future conversations with our clients, for this, we'll look at "Time spent with Account manager", this is an example of an output metric (lagging and a KPI in this case).

Our focus currently is on lagging KPI's (output associated), as they measure our performance in reaching our objectives, we'll explore input metrics in depth later, but for the time being, let's look at an example, to contextualise an input metric;

Input metrics (leading KPI's) associated with measuring this would be "time spent per client visit/interaction" or "increasing time spent per visit".

These can be tracked alongside retention rates (to measure engagement), or even broken down further respectively, by analysing other input metrics (which can be KPI's) such as; "reason for visit/interaction", "new notification regarding specific current/new services" etc.. It becomes interesting but again, we'll cover this later. Let's move on;

The first of the 3 KPI's today is;

1. Average number of services per client;

Quite self-explanatory, an average of the number of services each client has signed up for. We can see straight away how this can be closely interlinked to the input metric example. This can be compared alongside retention rates. The more "in-tune" we are with our client, the more attuned to their needs we can be and can address a greater spectrum of their needs. This can increase the "time spent" and therefore the engagement and retention rate significantly.

2. Average number of "Grade A" client “touches” per month; 

Studying this KPI helps your practice ensure its most important clients are being "looked after" (everyone is important but certain clients require more work and therefore present a higher proportion of revenue), making sure you and practice staff are "keeping on-top of conversations" and it's understood that there are many avenues for identifying those clients’ needs. Analysing this by partner (in your practice) and by industry can be used to improve internal communication so that partners excelling in conversations with certain industries, can teach others (internal improvement).

3. Average client response time; 

Carrying on the same message for "facing the future" included in part 2, is exceptional client service delivery. If I was to ask a Manager or Partner in your practice, how quickly the practice strives to return client calls, I should receive an answer which is consistent. Will I? Well, I guess that's something you can elaborate on, in the comments... That's the first step in developing a practice that is truly responsive to client needs.

The results that we achieve through the data, for the aforementioned KPI, will give us an understanding of where we are now and in the future, as we grow to a larger client base, or introduce a new service to our clients, maybe more new regulations are introduced! (seems like that will be the case?!) All of these factors can influence this performance indicator within the practice. Caused as "knee-jerk" reactions to change in regulation, but if we have a historic record of how we were performing before the change in regulation, which caused the exponential increase in client calls and therefore an increase in response time, we will know where we need to get back to proportionately, to the same client numbers, ensuring our performance is managed and sustained appropriately.

Ultimately, the goal of completing our tasks is the same, getting there faster and better than before is what we're aiming towards. This image illustrates how far we've come in achieving just that through technology and innovation. Don't let your practice suffer, don't be late in making vital changes which could mean missing the train, Catching the same train later, is never the same.

Leading from the front @Instruo

Furqan Baig