We've all been inundated in the last year with guidance on how to survive this economic downturn. Most of the time it revolves around how to stretch each dollar. While much of the content is timely, is any of it really new? Most of what we hear is good business advice that should be followed all the time and not forgotten when the bounty is plentiful. Perhaps the single most important item firms should be looking at these days is how to do more with less. While this is something everyone knows, what you may not know is how to accomplish this while also seeing a return on your investment that can approach 400 percent in the first year.
Many firms had to lay off employees after April 15. While it's always hard to part ways with an employee, economic realities set in and firms have to do what is necessary to survive. Interestingly enough, many of these same firms are now wondering how they will be able to get the same workload, or more, done next year. By focusing inward on your processes, you can drive out waste and inefficiency. You will be able to complete more work with the fewer people you have on staff, and you won't need to make new hires.
Start by taking an objective look at your processes. Have you mastered the process? Are inconsistencies minimized? Have you reduced any bottlenecks? And are you consistently delivering good, timely service to your clients? After you answer these questions, ask yourself an even more important question: Would the rest of your staff answer these questions the same way? Unfortunately, processes in accounting firms are ripe with inefficiencies for a variety of reasons. Lean Six Sigma is a methodology that helps a firm to take a good, hard look at its processes to find ways to drive more and more waste out of the process. Ultimately, this leads to an increase in capacity and the true ability to do more with less.
When Lean Six Sigma has been implemented in accounting firms processes like business or individual tax returns, some firms have saved upwards of 100 hours per person on an annual basis. It doesn't take long to do the math to see that for every 20 people involved in the process, you are saving 2,000 hours - which is one less person you have to hire. Depending on what you would have to pay that person in salary and benefits, you could easily see between a 300 and 400 percent return on your investment. By rearranging the process flow around the final review step of a tax return process, one firm has saved its partners approximately 80 hours per year. What would you do with 80 extra hours? What would your other partners do with an extra two weeks? From drumming up new business to helping clients with new planning ideas, the additional income that could be generated by each partner will have an even bigger impact on our ROI.
If you keep doing what you've always done, you'll keep getting what you've always got. If you're happy with the status quo of your processes, that's great. If you think this economy presents an opportunity to improve, Lean Six Sigma is a proven process improvement technique that can help your firm go from good to great.