How to Do an Accounting Workflow Analysis & Make Improvements

accounting wokflow analysis

Accounting is a field of repetition. Most of your tasks are the same each month, quarter, or year whether you’re working on an audit, putting together financial statements, or preparing a tax return. You know the gist of each project, but have you ever taken the time to break down the process into steps and ensure you’re working as efficiently as possible? 

Taking the time to define the steps in each project may take some time upfront. However, you’ll realize finding and addressing inefficiencies will net substantial returns on your investment over the long run. You’ll also find you’re better able to allocate your resources and plan out your timelines, which means increasing your firm's profitability.

What is an Accounting Workflow Analysis?

A workflow is a set of standardized steps that define a project. For a tax preparation project, the steps might be:

  • Gathering documents
  • Inputting data into tax program
  • Review
  • Meeting with client to review results

Each type of accounting project has its own set of steps. An audit has a different workflow than a bookkeeping engagement. 

Steps in a workflow can be as broad or narrow as you want them to be. The most important part of defining the steps is to make sure that if a task should be assigned to a different person (such as the review step in the process above - which is a separate step in the process).

Workflow analysis is the process of reviewing the stages of your existing workflows, defining roles in a project, and finding ways to improve efficiency. The analysis should include a review of each step and any substeps involved in a project.

The Steps of an Accounting Workflow Analysis

A workflow analysis consists of 4 steps.

1. Gain an understanding of existing processes and document the process

Prior to making improvements, it’s essential to evaluate your existing processes. Start by documenting each granular step of your standard workflows. You should also note steps that frequently occur on projects but may not occur on every project (i.e., waiting for a K-1 or reaching out to an investment firm for additional information). 

For the best results, have several members of your team involved in the documentation of existing workflows to ensure you are capturing all steps. By involving your entire team in the documentation process, you’ll gain insight into how each team member is currently completing their tasks and managing their work.

2. Collect data

When collecting data, it’s important to think about both qualitative data and quantitative data. Much of the quantitative data can be obtained by reviewing timesheets (if your team currently keeps detailed timesheets), while the quantitative data will require speaking with team members.

  • Quantitative data. Quantitative data includes items which can be easily measured, such as the time involved in each step of a process or how many team members work on various steps. You can also take into account the billing for each step if you bill separate stages of your project separately.
  • Qualitative data. Qualitative data includes data which is not easily measured or doesn’t have a standardized measurement. Asking team members if certain aspects of a project are frustrating or if there are certain stages of projects which create bottlenecks. Neither of these items has readily available ways of measuring them. However, having some information about them will yield insights into problems with your existing process.

3. Analyze the data

After gathering data about your existing process, you need to analyze the data. For the qualitative data, are several employees identifying the same pain points in your existing process? Are certain steps of your process overly complex and eating up the majority of your time? 

It’s a good idea to involve several people in the analysis of the data to ensure you’re garnering all the potential insight from the data and ensure you don’t have any holes in your analysis.

There are several questions you should be asking during this stage of the process:

  • Are there any tasks that are redundant in the process?
  • Are there any manual tasks which can be automated?
  • Are there any new programs or tools that can be integrated into your process to improve efficiency?
  • Are tasks being properly assigned to the appropriate team members?
  • Are there ways to continue monitoring key performance metrics to ensure you’re seeing the expected improvements?
  • Are there any tasks which need to be better defined?

4. Find areas of potential improvement

Once you’ve analyzed your data, are there changes you can make to your business processes to improve efficiency and decrease frustration? If certain aspects of your projects take up significant time, are there ways to do the task more efficiently, perhaps through automation

This step of the workflow analysis process will include testing out new ideas to see if new ways of accomplishing tasks actually lead to sustainable improvement. Some ideas for improvement will work and should be integrated into your processes. Other ideas might not have the desired impact on your process and should be discarded. 

What to Do After Your Analysis to Make Improvements to Your Firm's Workflows

Once you’ve completed the accounting workflow analysis process, it’s important to update your checklists and standard processes. You should roll out new efficient workflows to your entire team to ensure that process improvements are implemented by all teams and team members understand the expectations.

After your team has completed a project using the new accounting workflow system, you should have a debriefing to ensure all necessary steps and substeps were included in the new task lists. If any items were omitted, take the opportunity to update your lists for future projects.

Additionally, accounting workflow analysis is not a one-time process. As new tools become available, processes need to be updated to integrate the latest technology. Analysis processes should happen regularly to ensure your firm continues to stay current with best practices in the industry.

The Tool Helping More Accounting Firms Improve Their Workflows

Jetpack Workflow is a tool built with accountants in mind. The Jetpack Workflow management software system comes with standardized workflow automation templates that have been thoroughly vetted by accountants but allow customizations for items specific to your firm.

Along with being integrated with several standard accounting and tax systems, the Jetpack Workflow templates include the full range of accounting projects such as bookkeeping, financial statement compilations, audits, tax engagements, and financial consulting.

Jetpack Workflow allows you to update your default templates which means you can immediately roll out your updated workflow processes to your entire team. Jetpack Workflow offers a free 14-day trial, so you can evaluate the system for yourself.

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