Capacity planning for accounting firms, a practical method

Capacity planning sounds like something large firms do with dedicated resource managers. In a small or mid sized accounting firm it is usually a spreadsheet that gets maintained for a month and then abandoned. Here is a practical method that actually sticks.

Step one: know your available hours. For each person, take their working hours, subtract leave, public holidays and non client time, and you have their available client hours for the period. This is the denominator.

Step two: know your committed work. Every job that is in progress or scheduled, with an estimate of the hours it will take and the person it is assigned to. This is the numerator. If the numerator exceeds the denominator for a person, they are over capacity.

Step three: look forward, not just at today. Capacity is a function of time. Someone who has room this month may be fully committed next month. A capacity plan that only looks at the current week will always be reactive. Look at least two months ahead.

Step four: make it visible. A capacity plan that lives in one person's spreadsheet helps no one. It has to be visible to the people who assign work, so they can see the consequence of assigning a job before they assign it.

Step five: act on it. A capacity plan that is not used to make decisions is a waste of time. When someone is over capacity, stop loading them. When someone has room, load them. When the whole team is over capacity, hire. When the whole team has room, sell.

The reason most firms abandon capacity planning is that step two, knowing committed work, is too hard to maintain manually. The moment committed work lives in one system, the calculation becomes automatic. Firmhub forecasts committed work against available hours so the capacity plan maintains itself.