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 measure it?
  • How do I create additional capacity at my firm?

All excellent questions, and we aim to provide our best answers here.


A Quick Primer on Capacity Management for Accounting Firms

Capacity management is the process of laying out the current capabilities of your firm, and preparing future bandwidth and resources to handle increased demand — both short and long term.

Put another way:

Demand is the work your clients want. Capacity is your firm’s ability to handle that demand.


Why Capacity Management 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.)

Get a Better Handle on Current Workloads

If you’ve ever found your firm missing key deadlines and fighting burnout, 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 your firm growing. 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 themselves and the number of employees handling them.

Create Better Team Accountability

A close eye on output shows your fastest performers, as well as those who aren’t so fast, that performance and consistency matters. 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 do you measure it?” 

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 you can take as a firm owner to get an accurate read of your current capacity.

Clearly Document Processes

Balance begins by understanding the center point. All scales start at “zero.” 

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 accounting 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

Now let’s get into a little bit of math. 

Some responsibilities (like advisory 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 administrative tasks only take a couple of hours each month, but don’t bring in much revenue. But those clients have you 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 example, once you know that task A takes 1 hour on average to complete, while task B takes 2 hours on average, you can start to figure out the number of hours each client will require to service each month. Then you can assign those hours by which employees are responsible for them for each client to get a better estimate of each team members’ current workload and remaining capacity for the month.

If this sounds like a headache, it’s because it is. Luckily, there’s a better solution…


Capacity Planning and Management 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 offers capacity planning and we are continuing to build extensive features to improve how firms view and plan for future work.

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 your 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.