In the Australia CPA September edition of the “In the Black” magazine, there is an interesting article on “Time out on billing”. Part of this article mentions of course the Value pricing that has been proposed by consultants to accounting firms for all of this current century, if not well into last century.
Ron Baker, the founder of the VeraSage Institute, published in 2002-2003 “Trashing the Timesheet”. As Ron Baker notes in this 48 page document, when you reward people for billable hours, you get billable hours, even if these hours logged on the timesheet are outright lies or worthless in terms of creating results for the customers. While value pricing has a lot of support, there is still resistance to value pricing by the consumer.
Pushing into value pricing removes some of the need for timesheets. Some want to do away with timesheets altogether, while some argue that timesheets are an integral part of designing service delivery processes and systems. Time management systems give management and team members a strong incentive to improve processes and efficiency. This leads to healthy conversations and problem solving that improve a firm’s service delivery processes and systems. Indeed some argue there is no alternative at the moment to timesheets.
However, the disadvantages of timesheets seem many: timesheets keep firms mired in time, sends a mixed message to staff (especially when value pricing), timesheets discourage innovation, timesheets tempt otherwise ethical staff to act unethically, administering the timesheet system is expensive, time spent recording time is wasted time, timesheet-based costs are misleading and arbitrary, timesheets build silos and are a disincentive to collaboration.
If we look at freelance websites, we notice that customers routinely mention hours when requesting a quote, but freelancers generally propose based on a fixed price. So independent offshore resources can work to tasks or jobs, and manage their own time, without disclosing this time to the customer.
So if we know timesheets and time based billing doesn’t work in accounting firms, it’s interesting to note that time based billing seems critical to some Australian firms who are utilizing full time offshore staff. It seems that while we know it’s harmful to have this practice inside our own firm, we don’t mind transplanting this bad habit into an offshore workers daily routine.
The question is why is there a need for Australian firms to request their offshore staff to enter timesheet data, and the value of that timesheet data. It creates a system whereby Australian firms need to monitor their offshore staff, through key loggers, video monitoring, etc. And if we’re stressed monitoring Australian employees, there must be additional stress monitoring workers in an offshore office.
At the end of the day Australian accounting firms just want completion of work, and in a similar way that Australian accountants work to complete jobs or tasks, the offshore labour force should also work to complete jobs or tasks.
There should be no objection to the conclusion that if a firm has determined timesheets should be removed from their Australian accounting employees, then they should also be removed from Australian accounting firms offshore resources. And if we’ve been hearing from the experts for the past couple of decades, then offshore workers should also throw away their timesheets.
As a last point, whether you agree with “resource based” offshoring, or “job based” offshoring, there should be no difference in terms of the removal of timesheets.