Gary Boomer of Boomer Consulting is a consultant I’ve written about a few times in the past, some say unfairly so.
This is because you can see him dismiss the Rate x Hours mentality, but as of yet he has not written about the timesheet.
Well, his most recent article in the March 16-April 5, 2009 Accounting Today takes another step forward in trashing the timesheet.
The article’s main thesis is that the microchip is responsible for the current economic climate. Gary’s evidence and argument is totally unconvincing, but that’s not what I want to focus on here.
Here are two comments that caught my attention:
Many tasks and services that accountants used to offer have lost value. Time and effort is no longer a measure of value in the market (though many accountants are still caught in this paradigm).
Time entry and billing (capturing and reporting irrelevant information).
That second point is the most damning statement against timesheets I’ve ever read from Gary.
He goes on to write this:
Managing a firm by revenue per full-time equivalent (FTE = 2,080 hours) is more relevant than simple realization and utilization.
The problem with this is revenue per FTE is a lagging indicator, and simply measuring it tells us nothing about how to change it.
Further, if the partners in the firm are lousy pricers, than they are leaving money on the table, something this metric, or financial statements, or cost accounting, cannot measure.
There are better Key Predictive Indicators—that is, those that are leading indicators, which are predictive of customer behavior—to look at other than revenue per FTE, as discussed here.
It also demonstrates why effectiveness is so much more important than efficiency in a professional knowledge firm. Efficiency is a measurement but effectiveness requires a judgment.
So I reiterate my challenge: Come on, Gary, make our day. Write a column on the deleterious effects of timesheets.