Accountants are funny in the way that they hire people. They would much rather hire more accountants and let the accountants do the administration work rather then hiring professional administrators to do the administration work. After interviewing about 5,500 accountants over the past 5 years I have determined that an accountant spends on average 1.5hours per day on ‘administration tasks associated with the accounting job’.
Amazing – 1.5 hours per person per day. If you have 10 accountants at an average hourly rate of $200 that works out to be $675,000 of potential capacity. 10 x 1.5 x 5 days per week x 45 weeks for the year. You could hire 2 full time administrators at a cost of $100,000 to do that work. Spend $100k to free up (new capacity) $675K – go figure!
And it gets worse. I meet partners of firms who are doing more admin work then they need to. Some are doing the ‘practice administration’, some have the euphemistic title of ‘marketing partner’ and some attempt to look after the firms IT. Give me a break. I have never met a partner of an accounting firm who is an expert in these areas.
If a partner of a firm is mucking around doing 2 hours of ‘practice administration’ versus meeting a client for 2 hours and finding some new business – then they are wasting their time. A 2 hour meeting can generate (in a lot of cases) $5K or more of new business. A full time business administration on the firm can be hired for $50 – $75 per hour. New business generation at $2,500 per hour or administration work @ $50 per hour. Go figure.