Plan Ahead to Combat Workload Compression 

by Roger Nagel, CPA, CMA 

Workload compression is a challenge that has always been an issue in our profession, regardless of firm size. Typically, for firms who do primarily tax, the time between February 1 and April 15 is incredibly intense. The good news is that we are probably operating at peak efficiency during that time, out of necessity. However, the bad news far outweighs the good. Workload compression generally leads to a “slow time” during other months of the year. This causes staff to work (or overwork in some cases) at max capacity for a portion of the year and then search for work at other times which is not a good model. Our firm has found a few methods that help us mitigate the impact of workload compression, but essentially it all boils down to developing efficient operations and proper management of resources.

It’s All About Management
Our firm has been fairly successful in avoiding many of the issues associated with workload compression, mainly because we have put a cap on the number of hours that our employees are allowed to work. Working excessive hours has always been problematic for smaller firms because this leads to issues with retaining and recruiting new staff. We strive to manage our firm’s workload in a way that ensures we are not regularly working weekends. Typically, first or second year staff members are not required to work on weekends at all. It’s well communicated throughout the firm that this is not an expectation that we have for any of our staff.

At our firm, we strive to staff at a capacity that allows us to adapt to new demands while also maintaining the flexibility to work a reasonable number of hours. We hire people based on what we predict each year will look like. By forecasting monthly activity, we are able to have an idea of what busy season will look like and then staff accordingly. We operate a little differently, in that we shy away from hiring temporary employees for busy season. Instead, we hire year round staff and then focus on filling our time outside of busy season.

Currently, our firm has four CPAs, two non-CPA staff and an intern. We also have two additional openings that we are hoping to fill by the end of the year. We strive to maintain a year round intern that is a producing role, rather than an administrative one. Our intern program is meant to groom students for their careers, so we assign them tasks that are considered billable time. There are constraints on what students are able to accomplish with limited hours per week, but everything that they are doing is helping with the firm’s workload.

“We Don’t Make Our Profit During Tax Season”
In order to make year-round staffing for busy season capacity a sustainable practice, it’s imperative that we find ways to fill our time during the slower months. We encourage our employees to always be looking for services outside of standard compliance tasks. We expect staff to exhibit the presence of mind to recognize potential service opportunities with existing clients and offer solutions that we can provide. I keep a list nearby that becomes a living/working document for April 16.  It serves to remind us what we saw or heard during our peak season that needed action at a later date.  One common service that we have been providing is helping our clients improve their internal accounting practices through coaching, training and feedback. We strive to constantly look for opportunities that help us add value and deepen our client relationships that also help us build the firm.

I always tell my people that we don’t make our profit during tax season. Tax season is where we create our base of business, but we have to maintain a strong focus on generating revenue after tax season or the firm will not continue to thrive. We have to keep all of our people across the firm thinking about what will happen after busy season. Generally, we start planning toward the end of March to ensure we have identified who will be working on extensions and to ensure any other engagements have been deferred to post busy season so that we are delivering on those commitments in a timely fashion. Mitigating the impact of workload compression is all about workload management and balancing resources for the bigger picture, outside of busy season.

Nagel CPAs, LLC - Accountants and Advisors is a small firm based in Rio Rancho, NM. Roger Nagel, CPA, CMA is the Managing Director.


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