Waste Your Productivity

Take a guess how I spend most of my time during tax season. Go ahead.... You're wrong. I do not spent most of my time preparing tax returns. I wish that was how I spend my time. My time is actually spent mostly as a traffic cop, making certain returns are being prepared by staff on time and reviewing completed returns. I also spend a significant amount of time answering tax questions like..

“Frank, how can I get my girlfriend on payroll and deduct my payments to her? I have to support her. My payments might as well be tax deductible.”

Yes, there is an answer to this. As long as she is providing valuable services, she can be on payroll. I won't get all judgmental about having to pay a girlfriend to keep her around. That begins to sound a lot like prostitution. That probably makes me a pimp consultant. That explains the pimped out Caddy in my garage. Actually I drive a Kia. It's the CPA in me. I can't go $40K for a damn car.

The point of the above isn't to point out my expertise in prostitution. The point is that I am one busy dude during tax season. At the height of the season, I will be responsible for close to four hundred tax return projects at one time. Productivity and time management are two required skills if you want to walk a mile in my shoes. If that's what you want, learn to walk fast.

Here's an equation you won't see in any management textbook. Productivity = hours worked + ( intensity times 2 + efficiency times 2). If you can't read this equation, grab an eighth grader. She'll be happy to explain.

This equation breaks productivity into three factors: hours worked, intensity, and efficiency. But it does more than just list the factors, it weights the factors. The equation states that both efficiency and intensity are twice as important as hours worked. We are all familiar with the admonition to “work smarter, not harder.” The trouble with the admonition is that it doesn't define “smarter.” Working smarter is really working more efficiently, but it doesn't stop there. Working smarter is understanding the interplay between work hours and work intensity.

One of the most common errors, that I see newbie tax preparers make, is confusing working long with working hard. Newbies consider eighty hour weeks a badge of honor, but it really isn't. In most cases, they would accomplish far more in fewer hours by working more intensely.

When I walk past the offices of newbie preparers, I see them staring at computer monitors deep in thought. They apparently believe numbers from 1099 and W-2 forms will miracle themselves into our tax software. We don't have a telepathic computer interface at our office. Tax return preparation is about moving your hands. If your hands aren't moving, returns aren't getting done. You can work twenty-four hours a day and not accomplish a damn thing staring at a monitor. Working long is not working hard.

Working long instead of hard does more than just waste time. It kills productivity. The last twenty hours of an eighty hour work week destroy the productivity of the first twenty hours of the next week. Long hours produce fatigue. Fatigue kills intensity, and as you can see from the equation, intensity matters more than hours.

A few years ago, we employed a preparer who was famous for pulling all-nighters at the end of a month. The reason for the all-nighters was his bonus plan. He got a bonus based on his billings for a month. Justifiably, he tried to bill as much as possible. I dreaded commuting to work on the morning of the last day of the month. A three foot high stack of tax return folders awaiting review would be there for me. That might sound like good news, but it was really a three foot stack of smelly crappola. The tax returns took me a long time to review and were full of errors. He not only destroyed his own productivity, he destroyed mine as well. All-nighters don't work in the tax business.

Intensity is about concentration. I have been blessed with the ability to concentrate on a task to the exclusion of everything happening around me. Staff members see glazed eyes when they come to my office to ask questions. It sometimes takes me a long as a minute to shift mental gears and be able to answer their questions. Near April 15^th, sometimes I just babble incoherently and drool.

Interruptions are the enemy of intensity. After an interruption, coming back to the original task takes ten to fifteen minutes. The time wasted taking a random call on your cell phone isn't the only time wasted. The transition time back to your original task is also gone.

During the depths of tax season, I receive ten to fifteen non-junk e-mail messages an hour and ten to fifteen phone calls per day. That's a lot of interruptions and potentially a lot of wasted transition time. I combat the potential time drain by returning phone calls and e-mail message between tasks or when I am waiting for the computer to print or process something. Some of you have probably noticed that I might return a phone call as soon as five minutes after you leave a message. That means I reached a break point in my current task. You might find leaving a message for me instead of contacting me immediately inconvenient, but keep in mind that when I am preparing your tax return, I am concentrating solely on your tax return – not someone else's interruption of the moment. That is unless Jennifer Aniston calls. Then you aren't really a big priority.

If I had to pick the worst invention of the twentieth century, it would be the cell phone. All seven billion people on the planet have the ability to instantly interrupt any task for any bullshit reason. Being on a cell phone in public ten years ago was a sign of status. You were so important that the world would stop revolving if you weren't constantly available. In 2012, you're just a lackey. The boss says, “You better jump boy, when I call.” How many people have Warren Buffet's cell phone number? Probably not many, if he even has a cell phone.

I hate taking phone calls in my car even though I have bluetooth and can talk hands free. Yes – in my Kia. How about your Mercedes? Only if it's a new one. Driving time is my time to think. I have solved a lot of client problems driving around the beltway. Driving time is uninterrupted time to let my mind wonder, and my mind naturally wonders to client problems. That's a far better use of my time than answering more “Can I deduct my dog?” questions.

Interruptions don't just kill intensity, they kill efficiency as well. Efficiency is doing a task in the fewest steps possible. My wife is now working with an efficiency genius. He is a Six Sigma expert. He is so expert that he has determined that the most efficient way to get his job done is to do nothing at all. He makes everyone else do his work. That isn't exactly what I have in mind.

Efficiency is knowing your job. When I begin preparing a corporate tax return, my first step is reconciling retained earnings. I don't even think about how to start. I just go right to retained earnings. I know from experience that if I don't start there, I will end up back there after wasting a lot of time.

One of the interesting things about newbie tax preparers is where they start with a return. Their first step is to agonize. Rather than beginning with retained earnings and getting their hands moving doing something, they sit around worrying about how messy the records are. This, of course, accomplishes nothing. It just pisses away time. Messy records are a given in our business and may it forever be so. When that stops, so do our jobs.

Efficiency is matching the best tool to the task. Paul and I search year round for better software and utility programs to complete tax returns. Almost everything we do is automated. Tax preparers are expensive to hire. Saving ten minutes per tax return over a thousand tax returns is real money. We went paperless in the late nineties to save time. It worked spectacularly.

The new frontier in tax return preparation is workflow management. Our client center is our way of automating many of our routine communications with clients. For example, instead of spending a hundred hours a tax season calling or e-mailing clients that we are still waiting on answers to questions, the client center sends out automated reminders. We can then spend the time saved communicating important matters that can make a real difference in a client's tax situation. Automating mundane tasks gives us time to concentrate on more important tasks.

Another example from the client center is our questions list engine. Instead of typing out “how much did you pay in personal property taxes” a thousand times a year, we have a set of standard questions that a preparer can select with the click of a mouse. We have about thirty standard questions for each type of tax return. Not only do the standard questions save typing time, we know the wording gets us correct answers. It is quality control.

The geniuses, who run the CPA world, are fond of telling us that we aren't selling time. We are selling expertise. They are about half right. Our expertise is important, but we can use that over and over again. There is a finite supply of time. We are in fact renting out our expertise, and we have to find the most profitable use of that supply. You can be the most knowledgeable CPA on the planet, and still go broke if you piss away time.

Last year, I blogged about our great bathroom decorating contest during tax season. The women, or really one specific woman, decorated the ladies room in some strange french theme. She even put in a waiting bench. Yes, they had a waiting area in a one banger bathroom. Who was waiting in there? Are there women who enjoy smelling someone else's little brown offerings? No wonder men don't understand women. I'm not sure I want to.

The men decorated our thinking room in early American Jennifer Aniston. We have one authentic autographed picture and one poorly faked one. We even have a picture of me out on a date with my beloved Jen. I don't actually remember that date, but then sometimes I black out when I drink.

The point of the contest, from my standpoint, was that we could decorate the bathrooms, paint the walls, and sing drinking songs every day at noon. None of this would increase our productivity. Productivity is between your ears. The person, who decorated the ladies room, was gone shortly after tax season. She had a pot of potential as a tax preparer, but she would rather do it her way than do it better. She did everything she could to avoid our procedures, and in some cases, tried to subvert our proven methods.

When we totaled up the final billings for last tax season, we had one person equal her billings working a third less time. He used our methods. She didn't. What's the lesson here? If you can't figure that out, you are probably a Six Sigma working for the federal government.

Thanks for reading. For real tax and accounting advice, check out the authentic, not to be duplicated, and borderline genius S&K web site at www.skcpas.com.