Your Cancer Is Called a Timesheet

Dividing cancer cells
Timesheets: the cancer of the professions

I stood silently among a group of a dozen managing partners of regional firms as I hooked up my MacBook to the projector to begin my talk about becoming a firm of the future.

They had just been presented a state-of-the-profession address by an MP of a Top 100 firm. I have heard much of the content of the presentation before at other gatherings of professional accountants.

The litany of “challenges” repeated the narrative that has been well documented and continues to grow for over the last decade:

  • While there are more people graduating with degrees in accounting, fewer of them are sitting for the CPA exam. This is leading to fewer new hires for firms.
  • The new hires they do have are “millennials” who desire a challenge and think they should be made partner sooner rather than later.
  • Attrition, especially at the mid-career level, is over 10 percent and is mostly initiated by the professional, not the firm.
  • The loss of people in the middle and bottom of the pyramid is eroding the traditional economic model. Non-equity partners are increasing and funding for partner buyouts is disappearing.
  • Cries of “We must become more efficient,” and/or, “We must embrace new technology,” and/or “We must hold people more accountable,” reverberate in meetings.
  • Compliance work continues to flat line and while new offerings are growing revenue, they are not growing fast enough. Worse still those that do this work are often not even CPAs!

After my presentation was successfully displaying on the projector – the modern equivalent of the campfire in this narrative. I paused to get their full attention.

“Here is what I heard,” I began.

“Our profession is sick, even dying. We might have cancer. We really don’t know, but it is bad.”

After another pause and with no one disputing my summary, I continued, “I think you are right. I think you do have cancer. The good news is, I believe I know the cause and it is curable.”

They all looked at me in hopeful, but suspect anticipation.

“Your cancer is called ‘a timesheet’ and you must cut it out completely before it kills you.”

There were a few barely perceptible nods and even some smiles and hushed chuckles from the two “younger” people in the room. The chuckles quickly morphed into coughs as they remembered their MP was seated among them.

I proceeded to dismantle all the arguments (there are only four) in favor of the timesheet before anyone else could say anything. I even went so far as to do something I rarely do in a public live event. In fact, I call it the nuclear option.

The brief exercise is so stinging, so devastating to the timesheet argument that I fear that it could cause emotional damage to everyone in the room. Because of this I usually reserve it for online anonymous events so that folks have some time to themselves to recover.

“How many of you have ever filled out a timesheet?” I boomed as I raised my hand in the air. All hands joined mine in pointing heavenward.

raised hands“How many of you have put down on your timesheet the incorrect number of hours you worked on something, be that too many hours or too few hours with full knowledge that it was incorrect?” As is the case everywhere I have done this exercise, all hands remained with mine in the air. One participant, I do not know who, meekly mumbled, “Every week,” under his breath but audible to all.

I paused again, then quipped softly, my hand still in the air, “The ethics session begins later today,” trying to make a bit of joke to relieve their inner guilt.

Why is this? Why, in one of the most ethical and honored of professions, is this not only the norm, but ubiquitous? Why are these good people, moral and upright members of the community, whose commission is, in part, to identify, correct, and in some cases, prosecute financial wrongdoing (aka, getting the numbers right) sitting before me all guilty of that same crime?

The answer, again, is the timesheet.

In my session on Trashing the Timesheet, I speak mostly of how the timesheet is suboptimal as a pricing mechanism. There is no doubt about this, it is beyond dispute. However, my argument goes beyond this mere deficiency in pricing. The timesheet, not the people who fill them out, is immoral and unethical.

Why? Because it – the idea of a timesheet – is based on a falsified idea known as the labor theory of value which was developed in part by Karl Marx. Time/value equivalency is a false notion that causes bad things to happen. As explained by my “nuclear” exercise, it is the timesheet causes otherwise moral people to do immoral things; it is the timesheet causes people in a highly ethical profession to do unethical things.

I realize this is a dramatic statement, but it is nonetheless true. Think about it no one has ever said they have behaved completely honestly. In addition to this reason, my distain for the timesheet and belief it is immoral expands when it is applied inside the organization to judge individuals.

People come to believe that their worth is actually in their hours they “bill.” They start to believe their hours have a specific “worth” not only to the firm but to them as if hours “spent” with children or aging parents must be evaluated against the hours “spent” at work.

Country singer Jamey Johnson recorded a great song a few years back entitled The Dollar. In the video for the song, scenes cut back and forth between a little boy and his father. When the boy asks his mother, “Why does Daddy go to work?” the mom replies, “Your Daddy’s got a job, and when he goes to work they pay him for his time.” The child then goes to his piggy bank and returns to his mom and in the chorus of the song asks:

How much time with this buy me?

Is it enough to take me camping in a tent down by the stream?

If I’m a little short, then how much more does Daddy need,

To spend some time with me?

Cue weeping.

It is my contention that this song illustrates what happens to people who record their time. Over years indeed decades it affects their internal belief system about who they are in essence as people. It robs them of their humanity. This is evil and it must be destroyed.

It is time the profession rid itself of this meddlesome method of malevolence.

Today Is Value-Pricing Sunday

OK, not exactly, but if there were such a designation, today would be the day.

This is the Gospel read in all Roman Catholic Churches throughout the world.

Matthew 20

The Parable of the Workers in the Vineyard

1 "For the kingdom of heaven is like a landowner who went out early in the morning to hire workers for his vineyard. 2 He agreed to pay them a denarius for the day and sent them into his vineyard.

3 "About nine in the morning he went out and saw others standing in the marketplace doing nothing. 4 He told them, ‘You also go and work in my vineyard, and I will pay you whatever is right.’ 5 So they went.

"He went out again about noon and about three in the afternoon and did the same thing.6 About five in the afternoon he went out and found still others standing around. He asked them, ‘Why have you been standing here all day long doing nothing?’

7 “’Because no one has hired us,’ they answered. "He said to them, ‘You also go and work in my vineyard.’

8 "When evening came, the owner of the vineyard said to his foreman, ‘Call the workers and pay them their wages, beginning with the last ones hired and going on to the first.’

9 "The workers who were hired about five in the afternoon came and each received a denarius. 10 So when those came who were hired first, they expected to receive more. But each one of them also received a denarius. 11 When they received it, they began to grumble against the landowner. 12 ‘These who were hired last worked only one hour,’ they said, ‘and you have made them equal to us who have borne the burden of the work and the heat of the day.’

13 "But he answered one of them, ‘I am not being unfair to you, friend. Didn’t you agree to work for a denarius? 14 Take your pay and go. I want to give the one who was hired last the same as I gave you. 15 Don’t I have the right to do what I want with my own money? Or are you envious because I am generous?’

16 "So the last will be first, and the first will be last."

Most interpret this as demonstrating the generous nature of God (which it certainly is), but adding an assumption (which is clearly NOT in the text) offers a more economic exegesis.

Perhaps the owner of the vineyard believed there to be a frost coming that evening which would destroy the unharvested grapes. This would make the grapes gathered later in the day of much greater value to him. Value is subjective!

What I find fascinating is that it is one of the few economics lessons in the Christian Bible – only appearing in the Gospel of Matthew. It is clearly a refutation of Marx’ Labor Theory of Value written 18 centuries early. Lastly, it is certainly classically liberal in that the owner is free to do with his money as he sees fit.

ET HORA LIBELLUM DELENDA EST

Your Vote Needed – Best Timesheet Video

Below is a list of videos I found on youtube that are related to the timesheet with a link to a playlist I created if you want to view them consecutively. Please view them and let me know which is your favorite.

  1. Do your timesheet by joebeegnish – This would be funny if it were not serious.
  2. Time Sheet Song by liltam21 – There is even a song about this…
  3. Time After Timesheets – by PaulDesRosiers – …and a cover/parody of a real song…
  4. Time sheet drama by pumpkin1017 – …and a cartoon version…
  • timesheet by manuviora – …and even one en Española!?
  • May Timesheet Reminder by tracywald – Yes, Godfather parody…
  • June Timesheet Reminder by tracywald – …and a Matrix parody. This is a whole series from one person. I wonder what she puts on her timesheet when producing these.
  • Gordon filling out his Timesheet by 94WYSP – An absurdist drama…
  • Saw Timesheets by hordeman70 – …and a horror flick.
  • How to Create Stickies Timesheet Reminders by tsgvids – Funny for its unintentional earnestness.
  • Workamajig Creative Management: Angry Men by workamijig – Because “creatives” love filling out timesheets online.
  • Timesheets by BereaCollegium – Finally, the truth!!!

    So which one is your favorite?

    Bonus question: If you fill out a timesheet, what did you code watching these to?

    Ed Kless Is Wrong

    Once again, the self-proclaimed Defender of the Timesheet and Champion of the Dissenters, Greg Kyte, is at it again. This time he takes me on rather than Ron Baker of VeraSage.

    Dear Ron,

    Quite awhile ago, I sent the following letter to the Journal of Accountancy, but apparently they were too scared to print the truth. Enjoy as I expose the falsehood of your co-conspirator, Ed Kless.

    In April 2010 the Journal of Accountancy published the article, Project Management for Accountants by Ed Kless. Although the article contained a significant number of words, many of those words created lines, and if one reads between those fabricated lines, one may find the same offensive subtext that I found. The author is waging a guerilla war – not against gorillas, but against the accounting profession. Project management is for ignoble professions such as contractors, engineers, and doctorate-level pharmacology researchers. Project management may be good enough for those and other financial Cro-Magnons. We accountants, however, are the progeny of a dignified tradition, and our collective pecuniary prowess has led us as a community to a near-universal acceptance and usage of the financially sophisticated and elegantly simple concepts of the billable hour and the timesheet.

    Mr. Kless’ approach to project management is his attempt to rob our profession of the fringe benefits that accompany the billable hour and the timesheet. In his article, Fast Eddie lists eleven essential components of a scope statement. He advocates the use of a scope statement because it is designed to limit “scope creep”; however, he ignores that fact that under the billable hour paradigm, scope creep creates revenue. Ergo, Fast Eddie is trying to decrease your firm’s revenue, and if you consult your accountant, she’ll verify that revenue is a good thing.

    In his opinion, all assumptions between a firm and a client are to be clearly enumerated. Mr. Kless exhorts us to “answer the question, ‘What should we not leave unsaid?’” But since I bill by the hour, there is only one assumption that I can’t leave unsaid—the assumption that if I work on an engagement for an hour, the client is going to pay me for an hour.

    I actually liked his idea of maintaining a “future project list.” It’s a list of possible projects and major tasks that will be deferred until the future … like when I need more billable hours.

    He argues that constraints need to be brainstormed and specified. Constraints are limitations and restrictions that could hinder the efficiency of an engagement. The article states that constraints are “risks in waiting.” Don’t look at constraints as risks in waiting; look at them as semi-avoidable wellsprings of cash flow.

    Possibly the most offensive part of this article was the following assertion made while discussing how to calculate percentage of completion: “Measuring the completeness of your projects by hours billed is akin to listening for the smoke detector to determine when your cookies are done. The alarm only goes off when it’s too late.” This is blatantly invalid. The beauty of using billable hours is that we don’t need to measure completeness. Billable hours and timesheets are actually like cooking with the Ronco Rotisserie and BBQ Oven: “Just set it and forget it!”

    Once again, Greg demonstrates that he is quite deserving of his self-developed moniker.

    On Timesheets and Cost Allocation

    Earlier this week I received an email from friend of VeraSage, Kirk Bowman of Mighty Data, who, by the way, his given himself the great title of Visionary of Value in his email signature and on his business card. He writes:

    At the most recent meeting of our FileMaker Business Group this week, I got a question for which I did not have a good answer. The question is, if we are not tracking time, how do I know if a specific project is profitable? They were asking for a metric to measure financial success or failure on a project by project basis. I’m going to review the slides from August but I thought I would ask your input also.

    The short answer is, “If overall profit is up xx percent, who cares?”

    The more detailed answer: You allocate your costs ahead of time, like Toyota does as they do not have a traditional cost accounting system. They use what is called targeted costing.

    Say you plan to do 12 major projects a year and $1.2 million in overall cost. You would start by allocating $100,000 to each. Now some would argue that some projects are bigger than others. OK, fine. Let’s allocate $200,000 to two of them, $50,000 to four of them, and leave the remaining six at $100,000. Of course, you can adjust them based on your judgment, so long as the total remains $1.2 million.

    Project Straight Adjusted
    A 100,000 200,000
    B 100,000 200,000
    C 100,000 100,000
    D 100,000 100,000
    E 100,000 100,000
    F 100,000 100,000
    G 100,000 100,000
    H 100,000 100,000
    I 100,000 50,000
    J 100,000 50,000
    K 100,000 50,000
    L 100,000 50,000
    Total 1,200,000 1,200,000

    Is it perfect? No, but allocating costs based on a time unit is just as flawed as assigning value to the customer based on a time unit. It is the same false premise: value or cost does not equal rate times hours.

    Is an hour billed on a project a good thing or a bad thing? No one knows, some hours might be good others bad. It is a judgment and therefore there is no reason to measure it. Allocating costs as above will make you approximately correct, rather than precisely wrong!

    Tracking time might make you a better cost accountant, but cost accountants make lousy pricers. I would rather be a better pricer.

    Lastly, timesheets are the cancer of the professions. They cause us to focus on the wrong things, the inputs. Professionals should focus on the right things, the outputs to the customer: deliverables, objectives, overcoming risks, solving issues, etc.

    TIMESHEETS DELENDA EST!

    Here We Go Again!

    More drivel from WebCPA! In an article entitled In search of lost time: Five ways CPAs can increase their billable hours – and their profitability, Brett Owens (who I am sure is a very nice person) states:

    The numbers tell the story and it all boils down to time management. If you bill for your time directly or on an hourly basis, diligent timekeeping is something you must do in order to get paid for all of the work you perform for clients. If you bill on a fixed-fee basis, accurate time records help determine how profitable specific clients and projects really are – and if they’re unprofitable, time records help us realize the viability of a client for the long term.

    No, no, a thousand times no! Oh, when will this obsession with Marxism end!

    Value (or cost) does not equal rate times hours. It never has and it never will.

    Highlights from Issues List Management Session

    On May 12, 2009, I presented a session at Sage’s annual partner conference, Insights. The session was entitled Issue List Management (or how to replace your time sheets with something that actually matters to your customers).

    First up are the slides from the session.

    Next, here are the video highlights and the document for downloading.

     

    And finally, the big finale! This is only for those of you who are radicals (like me) – a song which I believe demonstrates the immorality of tracking your time.

    Peter Drucker and Time Sheets

    Recently, I have been plagued by people who claim Peter Drucker said, “If you can’t measure it, you can’t manage it.”

    First, let me say that I cannot find this as a direct quote of Drucker’s other than continuous and unsubstantiated citations in many articles, blog posts, and PowerPoint presentations all over the Internet. If anyone has the direct knowledge of the book or published article wherein Drucker says these exact words, please let me know. Until such time, please do not attribute this quote to Drucker.

    Second, in my research looking for this quote, I found the following:

    Reports and procedures should be the tool of the man who fills them out. They must never themselves become the measure of his performance. A man must never be judged by the quality of the production forms he fills out – unless he be the clerk in change of these forms. He must always be judged by his production performance. And the only way to make sure of this it by have him fill out no forms, make no reports, expect those he need himself to achieve performance. – Peter Ferdinand Drucker, The Practice of Management, 1954, page 135.

    All emphasis mine.

    Does anyone now want to say that Peter Drucker would be in favor of submitted time sheets to measure productivity? I rest my case.