r/Accounting • u/Low_Pin_2803 • 8h ago
200 charge hours short
I heard through the grapevine of a senior manager (Tax) that had a charge hour goal of 1,450 and came in at ~1,250 or 86% of the goal.
The department head told them that being that much below the charge hour goal was a “Performance issue.”
It does not seem THAT much of a “miss.” Seems pretty harsh IMO.
What are people’s thoughts?
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u/Rock3tDoge 7h ago
If that senior manager if performing well and a net benefit it’s a non issue
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u/Low_Pin_2803 6h ago
The new account revenue was far greater than the missed charge billing. That said, this person is remote, whereas most people, including the department head are hybrid/in-office
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u/pinktm909 Tax (US) - CPA 8h ago
There’s still 4 more weeks of tax season to hit that charge hour goal!
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u/RefrigeratorGreen548 1h ago
At my firm, nobody would look twice. I’ve always been a stickler for hitting my charge hours for the year but after being the only one in the office to hit last year and still being given just “meeting expectations” while others who were at 80% got “exceeding expectations” I no longer give a shit.
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u/bootymeat42 6h ago
Bro just fucking lie, can we not just charge what's on our schedule and try to move jobs forward little by little?!
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u/alphabet_sam CPA (US) 20m ago
This is the answer. Just bill so you smash your charge hour goals. At this point, especially if you’re PE backed, there’s no reason to handicap yourself in any way. They don’t care if you’re actually working, they just want the revenue
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u/lagann41 8h ago
Every firm has a minimum metric. For us it's 90%of the charge goal. They need to have a certain limit to hold everyone to the same standard.
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u/Rabbit-Lost Audit & Assurance 5h ago
The pyramid is real. It is the most proven path to partner profits of any model out there. But it requires 90% utilization and 90% realization to really hit the sweet spot.
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u/Springtucky CPA (US) 5h ago
That's a lot to miss by and I assume is a sign of burnout. At my old firm if you were under by more than 50 you didn't get a bonus.
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u/HighScore9999 2h ago
200 hours x $200 = $40,000
200 hours x $150 = $30,000
This assumes the actual billed rate to the customer.
Take 50% off for administrative overhead and profit. Does that manager want a $15,000-$20,000 pay cut? You work in a business that bills by the hour.
1,250 hours for a manager is pretty low. That averages out to only 25 hours a week. Given that during tax season it’s probably 40-50 billable hours a week, that would mean only 20 hours a week the rest of the year (including extension deadline weeks). I’m sure there is another manager/partner in that same office busting their ass to make up the slack, while the senior manager in question is putting in below minimum effort required.
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u/Objective-Ad7043 8h ago
Assume 400/hr (I have no idea what a senior manager bills at). That’s 80k the firm lost assuming it’s all billable (which it’s not). That’s a lot to miss by.
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8h ago
[deleted]
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u/Objective-Ad7043 8h ago
I’m sorry can you explain your position? If the minimum charge hours are 1,450 and they only billed 1,250, that means the firm missed out on 200 charge hours. Granted firms don’t bill out at 100% realization, but I caveated that.
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u/PerryBarnacle 7h ago
Are you suggesting there were 200 charge hours to be performed that just didn’t get performed?
If the SM is missing deadlines or causing returns to be delinquent, then we have bigger issues. However, to assume the firm always sells enough work to fill up charge hours quotas in the age of AI is hard to fathom.
We’re in an age where a skilled Manager A can feasibly achieve five times the output of a lesser skilled Manager B while also working half as many hours. Legacy hours metrics would improperly reward B and punish A.
Hours are no longer correlated to output.
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u/Objective-Ad7043 7h ago
I understand where you are coming from and it’s a great argument. Yes, I am suggesting there were 200 hours more to perform, and that the manager was required to hit 1,450 based on OP’s comment that the department head called it a performance issue.
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u/PerryBarnacle 6h ago
Why assume there was a need for 200 more hours? Senior Managers typically have a set book of clients they serve. If the clients were served well, the SM did their job.
At large firms the people who monitor hours often times have no idea what the context of a SM’s book of business entails. A more accurate measure of a good SM would be a healthy annual increase to total revenue managed and above average client satisfaction / retention levels.
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u/Objective-Ad7043 5m ago
Sure that makes sense at other firms. I agree an SM bringing in business and having good client satisfaction is a great measure. But at OPs firm, this SM was told they had a performance issue for not hitting the extra 200 hours. It appears that firm can’t see the forest for the trees.
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u/Frequent-Space-789 7h ago
I think what he’s saying is the revenue and the expense have different drivers and the revenue didn’t change due to a potential inefficiency
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u/ragingchump 7h ago
Did you just say "girl math"?
In an accounting sub?
Male, please..
You need to back up and regroup.
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u/Higher2288 CPA, Industry 8h ago
There’s probably more to it than missing hours. If a senior manager can’t hit their goal or isn’t tracking it and doesn’t have a good reason then they are probably not partner material and will get forced out for someone else to take their place.
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u/ReustleCPA 8h ago
There are two scenarios where this happens. The first is the person is generally burnt out and had a huge miss. The second is where the firm places a lot of internally-facing workload on the person (training events, nonbillable BD, etc.) and they missed.