Accountants are good at numbers; really good at numbers. So, what numbers do you use to manage your practice?
Most accountants provide great advice to their clients on how to use numbers and data to manage and control their businesses. Yet I find that many accountants do not use anything similar for themselves. Here are some things accountants can easily do for themselves. I adapted these from what I advise clients to do.
Daily KPIs
Key performance indicators, or KPIs, are two to three numbers that can be looked at daily to see how things are going and that work is on target. Every client has a couple of numbers that give them a handle on how things are going. For accountants you can get the previous day’s billings, collections, chargeable hours (if you get daily time sheets), number of financial statements that are in progress, number of extended returns, cash received, cash disbursed, checkbook balance, perhaps past due payables (there should be none), accounts receivable, number of IRS notices that clients advised you about, time of longest unopened workflow message for each staff person, and anything thing else you deem important for your practice.
To me a KPI is an easily obtainable number that takes seconds to look at and digest. Anything more than two or three numbers is a financial statement and doesn’t qualify as a KPI as far as I’m concerned. It also will take time to generate and review vitiating its purpose. If you want more detailed information, develop a dashboard.
Weekly
This is for more detailed reports. Here I would suggest the total chargeable and non-changeable hours for each person for the previous week (if you use timesheets) and an accounts receivable past due listing. To me, anything not paid within 20 days of billing is past due; to you or others, it might be 90 days; either way, determine your own metric. Or perhaps it’s a listing of new client and prospect leads with the date of the first contact, potential fees and last date there was a contact with them and by whom.
Monthly
This can be a profit and loss statement and balance sheet no later than by the second day of the month, a time run, the total invoices sent out, an aged accounts receivable schedule, and a copy of the bank reconciliation and bank statement. Also, it can include a schedule of all completed projects or services over $10,000 in fees (you supply the amount for your firm) compared to the budget, and a work in progress schedule that’s also compared to the budget. If you do not do budgets, then I suggest you start now and make it part of your pre-planning process. If you do not keep timesheets, then develop these numbers in whatever manner would provide you with the tools to manage your practice.
Semi-annually
This can be a time run compared to billings, collections and realization. At minimum, this should be obtained at six-month intervals, but if your software can generate this information, then look at it monthly or quarterly. Perhaps you could get the total business, tax and special services for clients compared to the last five years, and anything else that might present or hint at a trend. Getting it on a less frequent basis would not yield benefits commensurate with the input to generate it.
Annually
Besides all the obvious information, prepare next year’s budget and compare last year’s amounts to the actual amounts and figure out what caused the differences.
These are suggestions. I did many of them when I was managing my own practice, and I know Withum does much of this now. Whatever you decide to do, keep in mind that the purpose is to provide meaningful data that would help better manage and control your practice.
I presented a Zoom program for business people for my local public library this month on a similar topic but geared toward clients. You can get a copy of the handout, which expands upon what I wrote above and can be used for client consulting. Just email me at
Do not hesitate to contact me at
Edward Mendlowitz, CPA, is partner at
