Capacity planning is one of those ideal-world phrases, similar to “workflow design.” A fantastic thought, but there are many questions into the “what, why, and how” of it all. Firm owners want to know things like:

  • Why is capacity planning important?
  • What’s the end goal?
  • How do you do it?
  • Does it improve and grow my firm?
  • Or what is it in the first place?

All excellent questions, and we aim to provide our best answers, starting right now!

A quick primer on capacity planning: Demand is the work your clients want. Capacity is your firm’s ability to handle that demand. Capacity planning is the process of laying out the current capabilities of your firm, and preparing future bandwidth to handle increased demand — both short and long term.

Why Capacity Planning is Important 

In a service business, deliverables are the product. Vehicle manufacturers are peak capacity planners, for a good reason. They know exactly how many cars, trucks, and SUVs can and have to run off the line. We’re talking about complex supply chains from multiple countries going into a single vehicle. 

Think about taking a look at next week’s/month’s workload and thinking, “Great, I don’t have to worry about getting it all done.” 

Is there a better work life benefit? (Note: Probably, but it’s still really cool.)

Better Handle Current Workload

If you’ve ever found your firm missing key deadlines and fighting overwhelm, the issue may be overestimating capacity. Solving the miscalculation comes from understanding your team’s bandwidth and better planning for upcoming projects.

Likely, these issues stem from growth (which is awesome!). Instead of “having a feel” for what the team can accomplish, you need something more concrete. By understanding capacity, you’ll better manage both the projects and the individuals handling them.

Create Better Team Accountability

A close eye on output shows your fastest performers, as well as those who aren’t so fast. If deadlines come and go, it’s clear who’s missing them. This allows you to figure out whether the problem is communication, allocation, or subordination.

Literally Plan for Growth

With a visual look at your bandwidth, you’ll be able to figure out an average fulfillment rate for each of your CPAs. Once you have your processes humming like a fine-tuned engine, a capacity plan shows exactly how much demand your firm can handle. 

No need to have a feel for how many clients your team can accommodate; the data is there in front of you. Sure, there are more variables (which we cover in the next section), but the idea is to see the measure of your firm’s ability to serve. Then, grow that ability via improved processes and adding to your team.

How to Measure and Plan for Capacity

Hopefully, several questions about a capacity plan have been ticked off your list. One of the biggest is “how?” There are formulas, graphs, and spreadsheets devoted to in-depth mathematics of bandwidth. There are also dedicated capacity tools that do most of the heavy lifting in that department.

Here, we’ll cover an overview of actionable steps to take, as a firm owner.

Clearly Document Processes

Balance begins by understanding the center point. All scales start at “zero.” Or insert some other profound-ism about attaining balance. In order to find, strengthen, and improve capacity — the current way you and your team work must be documented.

You have processes (things like hiring, marketing, and sales) and services (bookkeeping, payroll, taxes, and so on). Each of these bigger pieces break further down into time and individual tasks.

In order to document processes at your firm:

  • List out the big pieces: All of your services, what you do to gain clients, and how you manage the team.
  • Break it all down: Bring it to the individual task level, and if certain members of your team do specific roles, list those, too. 
  • Document everything: Having what’s essentially a wiki of your firm is something you’ll turn to regularly. And if you use a workflow platform, like Jetpack Workflow, all of your processes are kept in a single place — used by the entire team! 

Hunt Down Bottlenecks

Client relationships, deliverables, and quality control. These are the three biggest pieces to any accounting service. To hunt down bottlenecks, take the macro view for a minute. A deep, introspective look into who does what. Then, honestly determine where things slow down. 

We hear from most firm owners that bottlenecks tend to occur in either the client relationship or quality control sections of the process. It makes sense, too. 

If you’re the person who must sign off on certain things before work heads to the client, it’s quite possible either:

  • You’re super busy ensuring quality before it goes to clients
  • CPAs have to slow down a bit while waiting for your approval

It could be a bit of both.

Determine Value, Team Capability, and Overlap

Ok, so maybe a little bit of math. Some services take more time than others. The cost of services vary, too. Some tasks (within those offered services) overlap with others, which saves some time. Even further, some members of the team thrive on certain tasks, doing exceptional work quickly. 

All of these things have numbers attached to them. Time, revenue, margin, and salary (to name a few). A few examples of what you could come up with:

  • Basic monthly bookkeeping only takes a couple hours a month, but it doesn’t bring in much revenue. But those clients have us handle their taxes, which are super easy with clean books.
  • Some clients bring us their books once per year, for taxes. It takes a while to gain access to accounts, clean everything up, figure out payroll, and prepare the returns. It’s a larger ticket item, but pushes the limits of capacity.

The better you understand these things, the better you’ll plan the capacity and workload. You’ll also better shape the future of your firm. For instance, given the examples above, switching clients to a monthly payment and bookkeeping model, instead of a once-a-year fee (full of overwhelm).

Capacity Planning Made Easier with a Workflow Software

There’s no doubt about it, manually calculating and tracking capacity is (very) difficult. But technology brings capacity planning home to any accounting firm. In addition to workflow management, Jetpack Workflow now offers a capacity planning feature for “Scale” tier users!

You see every task assigned to your team, budgeted time for each, as well as what’s left to do. Then, drill down to see why particular tasks aren’t completed yet (e.g. waiting on client). All in a punched-up design refresh.

Plus, you can move tasks directly within the “Plan” feature, from one teammate to another, instantly bettering your capacity. From week-to-week to months ahead, you’ll know exactly what the team can accomplish.

Book a free demo to learn how much relief you can experience, knowing your team’s working at, not beyond, their capacity.

See Jetpack Worflow In Action

Get under the hood of Jetpack Workflow’s accounting workflow and project management platform. See some of the top features and how it helps your firm standardize, automate, and track client work more efficiently.