capacity client planning relationships

How to use capacity planning to your advantage

March 10th, 2019

Having a good relationship with clients is an important element to the success of any organisation. It plays a particularly important role during the busy season for accounting firms. When it comes to filing taxes, clients have numerous accounting firms to choose from. Because of this, it is important that your company offers great service so that it stands out from the rest. Two important characteristics that define great service is high-quality work and timely service. This often involves ensuring that your client’s demands match up to the capacity of the firm.

What is capacity planning?

Capacity planning is the process of forecasting the future capacity needs of the firm based on the current needs and trends in the industry. For an organisation, the capacity is the ability of a company to produce output within a specified period of time. For example, accounting firms need to plan for the total amount of resources they need to provide quality service to their clients during a busy season, such as the tax season. A firm can spend significant sums of money on the resources required for capacity planning, such as hiring extra employees, but the benefits of capacity planning help justify the costs. A few ways companies can use capacity planning to their advantage include:

  1. Reduce costs

Capacity planning allows companies to identify less expensive ways to meet upcoming business needs. For example, an accounting company might need to complete certain bookkeeping tasks and they know that all of their employees will be able to complete the job. However, it may be more expensive for the firm to assign the bookkeeping task to more experienced employees. Capacity planning allows companies to identify how to allocate tasks to employees so they are able to use their time productively. You can make changes to the upcoming projects based on the skills of the team and the availability of resources.

  1. Identify any shortage of skills

While capacity planning allows you to identify efficient ways to allocate tasks to the employees, it also discovers any shortage of skills required to complete the tasks for certain projects. Instead of identifying a shortage of skills when the project comes in, capacity planning allows you to see this issue early on. If you plan your work in advance with capacity planning, it will help you make important decisions on how to decrease the shortages. Firms can either:

  • Revise the project using the skills the team has
  • Recruit employees externally (either on a permanent or temporary basis) to fill in the skill gaps
  • Have training programs to train existing employees on new skills

With capacity planning, you can forecast your needs and also determine what type of projects you will be working on in the upcoming year.

  1. How many part-time and full-time employees are required

During the tax season, the workload for accounting firms increases on a larger scale in comparison to other parts of the year. Therefore, the number of resources required also increases (extra labour). For instance, if a company has fewer than 1000 returns to complete but has enough employees to file over a 1000 returns, they are paying for capacity that they don’t need during the off-season. Using the data on how many returns to file in the coming year, the company can make a calculative decision on how many employees they need to hire full-time and part-time.  

  1. It can be beneficial to the growth of the organisation

As your firm grows, you may need to take on additional resources for the new facilities. Using the data from capacity planning from existing locations, you can anticipate the needs of the other locations and develop more accurate projections. Capacity planning is especially useful when putting together a business plan and deciding on budgets for the company. By identifying future needs, it makes it easier to make higher level decisions when opening up a new location. You can also understand any issues you may have had with the previous capacity planning strategies and make sure that the firm hires enough resources to meet the project needs.

  1. You can store the client’s sensitive information

While capacity planning is used to anticipate the future resources required by the company for upcoming projects, it can also be used by companies that collect digital information on a daily basis. For accounting firms, this is important because they store large amounts of client’s sensitive information on a daily basis. Capacity planning can help the business stay ahead of the digital storage needs and keep critical information secure.

  1. Improve relationships with clients

The process of identifying and hiring users to meet the anticipated workload will strengthen relationships with the client. Communication between the employees and the customers can nurture healthy professional long-lasting relationships while ensuring the firm is fully equipped to meet the client needs. When the firm goes the extra mile to ensure that the service is provided to the client in a timely and efficient manner, it helps strengthen relationships and results in profitability.   

  1. It promotes a healthy organisation culture

A comprehensive capacity plan involves numerous groups in the organisation collaborating to come up with a plan for the future. Different departments such as the operations, IT and admin play a major role in the development of the capacity plan. To create an effective plan, these groups need to collaborate and support each other. This creates a sense of cohesiveness within the organisation and motivates employees as they are involved in the future of the organisation. When creating a capacity plan, it is important for the company to focus on the departments that play an important role in the company. An ongoing capacity plan can help create a strategic planning culture in the organisation.

Capacity planning is a process-driven approach and is a useful tool to keep customers happy in the long run. When the company has visibility on its future, it reduces the risk of attrition and makes it easier to complete projects on time. It also helps companies find the perfect balance between work and the resources required to complete the work without losing out on skills or customer loyalty.

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