Introduction to Project Management in Accounting

Many individuals and organizations have needs that only accountants can address. Tax planning and preparation, bookkeeping and financial statement preparation, audits for public and privately held companies, forensic accounting, management consulting, due diligence for mergers and acquisitions — these are just some of the numerous engagements that accounting firms may be called upon to execute.

The complexity of some of these engagements, and sometimes the sheer volume of work on a relatively simple portfolio of business, can quickly overwhelm even the most skilled and highly-organized professional. That’s where project management comes in.

What Is Project Management for Accountants?

Project management in the context of accounting firms is the systematic planning, execution, and oversight of accounting engagements and initiatives. This involves coordinating team members, allocating resources, setting timelines, managing client expectations, and ensuring deliverables meet quality standards — all while staying within budget constraints.

The Importance of Project Management for CPA Firms

It probably goes without saying, but to state an important underlying assumption, let’s acknowledge that if you want to succeed in any project, in anything really, you must be organized, manage your time, and communicate well with others. When it comes to accounting, it becomes all the more vital.

Some of the engagements noted above could take weeks months, or even a few years to complete. And some are incredibly complex. For these projects to succeed, accountants and operational staff need strong project management skills — a core competency for any modern professional firm — and accounting practice management software to support them.

We’ll explore practice management software in depth in a moment, but first let’s explore the specific benefits that successful project management can bring to accounting firms.

7 Benefits of Successful Project Management in Accounting

Benefit #1: Better Resource Allocation

Better administer your resources with the help of project management. Determine which projects you should address first, then determine how many resources you need to complete the project. This approach allows your accounting firm to feel more in control as you schedule the resources required for each project, eliminating unknown surprises.

Benefit #2: Cost Reduction Through Efficiency and Productivity Improvements

Everyone loves saving money. Implementing effective project management practices can significantly reduce costs for accounting firms by boosting both efficiency and productivity. By streamlining workflows and optimizing resource allocation, project management enables your firm to accomplish more with less. For instance, you can strategically assign your most skilled professionals to complex tasks, ensuring they're completed accurately and swiftly.

Benefit #3: Increased Profitability

Project management can help your accounting firm achieve better financial results because it allows your accounting professionals to make the most out of their resources and gain a competitive advantage over other firms. With more productive and efficient processes, you can accelerate project timelines, allowing your firm to handle a higher volume of work without increasing overhead. Ultimately, the enhanced efficiency and productivity derived from robust project management translate directly into improved financial performance for your accounting practice.

Benefit #4: Data to Improve Marketing Strategy

Project management allows your CPA firm to develop a more effective marketing strategy. This is because project management increases the data available to help you determine which projects are most important so they can be prioritized accordingly. With an improved marketing strategy, your accounting firm will generate better and more consistent leads, leading to more sales and sign-ups.

Benefit #5: Increased Client and Staff Satisfaction

Want to achieve a higher level of client and staff satisfaction? Of course, you do. With project management, you empower your accounting firm to produce higher quality work that meets the client's requirements. In addition, your accounting firm staff will be able to finish their projects on time, keeping them happy and productive.

Benefit #6: Improved Employee and Team Competencies

Implementing successful project management in accounting firms serves as a catalyst for enhancing individual and collective competencies. By providing a structured framework for task allocation, progress tracking, and collaboration, you foster enhanced communication, accountability, and team bonding. Moreover, as employees become more adept at project and task management, they develop critical soft skills such as time management and prioritization.

Benefit #7: Improved Organizational Performance

The cumulative effect of successful project management in accounting firms is significantly improved organizational performance. By optimizing resource allocation, enhancing efficiency, and reducing costs, firms can boost their profitability and competitive edge.

The improved marketing strategies derived from project data result in better lead generation and client acquisition. Meanwhile, increased client and staff satisfaction fosters loyalty and reduces turnover. As employees develop stronger competencies and collaboration skills, the overall quality of work improves.

This synergy of benefits — from financial gains to enhanced human capital — propels the accounting firm towards excellence, enabling it to handle more complex projects, attract high-value clients, and establish itself as a leader in the industry. Ultimately, effective project management transforms not just individual processes, but the entire organizational ecosystem, driving sustainable growth and success.

While the benefits of project management in accounting are clear, implementing it effectively isn't without its challenges. Let's examine some common hurdles and how to overcome them.

5 Common Challenges in Accounting Project Management — And How to Overcome Them

Project managers have the pressure of staying on top of everything. From juggling multiple tasks at the same time, managing everyone's expectations to solving various problems, and staying on top of their own schedule, a project manager's life isn't the easiest. The same can be said for your firm’s accountants, who may at times struggle to stay above water and remain positive as new projects flow through.

Whether you're the office manager of your CPA firm or the accountant implementing the manager's directives, it's crucial to identify and solve challenges together.

Challenge #1: Uncertainty with Project Progress

One of the main challenges in project management is progress uncertainty. If you are unable to quickly get a real-time picture of the project status, it's going to be difficult to gauge what actions are necessary to keep the project on track, or to know when a minor issue has arisen that needs to be prevented from turning into a major problem. How in the world do you deliver a project on-time when you have no idea of the current status?

Solution: Find the right project management solution and software to help you and your team manage tasks and track the progress of any project productively.

Challenge #2: Scheduling Conflicts

Working with different team members can boost team morale and bonding, but having to meet up with each one of them to compile their tasks and put them in the schedule is a significant challenge. In addition, it's hard to give clarity to members on the project's plan of what needs to be done in order to ensure the project is on track.

Solution: The best way to overcome this obstacle is to find workflow management routing software to help your accounting firm in project scheduling. This tool will not only help you and our team manage your resources more effectively, but it will also help put everyone on the same page when it comes to scheduling the project.

Challenge #3: Team Communication Issues

Effective communication is one of the most critical aspects of project management. It can also be one of the most difficult parts to manage.

Solution: The first thing you should do is make sure your team members share the same project goal, are well aware of client and management expectations, and are familiar with their personal assigned tasks. Another tip is to make sure that your firm is following best practices for proactively preventing communication problems.

Challenge #4: Scope Creep

This is one of the most common challenges faced within project management. As accounting projects progress, scope creep may occur due to numerous reasons. Unclear initial requirements, poor communication between stakeholders, changing regulations, client requests for additional deliverables, lack of formal change control processes, underestimation of project complexity, and the pressure to maintain good client relationships — any of these factors can lead to gradual, and sometimes unnoticed expansions of the project scope. The end result is increased workload, extended timelines, and potential budget overruns.

Solution: Define clear project boundaries, implement change control processes, educate clients on scope implications, use project management software, document all communications, include contingencies in plans, learn to decline unreasonable requests, conduct thorough initial assessments, and use phased approaches for complex projects.

Challenge #5: Unclear Expectations

Blurred expectations can come from a variety of places, such as your client, your team, or even you. A major challenge with blurred expectations comes from the fact that your client may not want to acknowledge that their expectations are different. And even if you recognize the issue and try to fix the problem, you may not be able to do so effectively or on time.

Solution: The best way to resolve blurred expectations is to confirm the expectations, clarify any assumptions and simplify the requirements of all parties involved before jumping into any project. Not only will this clarification help you manage expectations and simplify the team's task management process, but it will also help improve the firm's overall communication.

Now that we've discussed the benefits and challenges of project management in accounting, let's explore a powerful tool that can help address these issues: accounting practice management software.

What Is Accounting Practice Management Software?

You may recall that I promised earlier to explain the role of accounting practice management software. Before I do, it’s important to understand what it is, and how it differs from general project management software.

At its core, accounting practice management software is a specialized software solution designed to streamline and optimize the operations of accounting firms.

Key Components Typically Include:

• Client management and CRM functionality
• Time and billing tracking specific to accounting services
• Document management for tax returns, audit papers, etc.
• Workflow tracking for tax seasons, audit cycles, etc.
• Integration with tax and accounting software
• Deadline tracking for tax filings and regulatory submissions
• Performance analytics relevant to accounting firm metrics

Accounting Practice Management Software Offers Unique Advantages

While both project management and practice management software aim to improve efficiency and organization, accounting practice management software is a more comprehensive solution for the specific needs of accounting firms, incorporating elements of project management alongside industry-specific features.

Key Advantages of Accounting Practice Management Solutions

• Specialization: Accounting practice management software is highly specialized for accounting firm operations, while general project management software is flexible for any industry.

• Client focus: Practice management solutions typically include robust client management features, which may be absent or less developed in other project management tools.

• Regulatory compliance: Practice management software often includes features to ensure compliance with accounting professional standards and regulations, which most project management software lacks.

• Billing and time tracking: Accounting practice software usually has sophisticated time tracking and billing features specific to the profession, while general project management software may have more basic or no billing capabilities.

• Workflow templates: Accounting practice management solutions often include pre-built templates for common accounting workflows (e.g., tax preparation, audit processes), whereas project management solutions only include basic accounting templates (if any), or require highly customized setup.

• Integration: Practice management software typically integrates with tax and accounting software, while general project management tools tend to integrate with a broader range of business tools.

• Reporting: Accounting practice management software provides reports tailored to firm management (e.g., client realization, staff utilization), while project management software usually only provides generic project performance metrics.

In summary, accounting practice management software is a type of project management software that is purpose-built for accounting firms, while project management software is meant to be applicable to a wider range of industries and disciplines. That important distinction is why certain features are essential when researching project management solutions for accountants.

What To Consider When Choosing a Project Management Software for Accountants

When researching project management software for accounting engagements, you’ll quickly discover there are long lists of features to sort through. How do you know which ones are the most critical? As with many questions, the best initial response is “it depends.”

What mix of tax, audit, and consulting engagements are you juggling? What volume of projects is your firm managing? What are your staffing levels? These are just a few of the factors that will influence the choice of what’s best for your firm.

Essential Features of Project Management Software for Accountants

Regardless of the unique circumstances for your firm, there are table stakes to consider when it comes to project management tools. Make sure any software solutions you’re considering include — at minimum — the following:

• Basic task/project management features: These are fundamental to organizing and tracking the progress of accounting engagements. They allow firms to break down complex projects like audits or tax preparations into manageable tasks, assign responsibilities, and monitor deadlines.

• Time tracking and billing capabilities: Accurate time tracking is critical in accounting firms where billable hours are often the basis for revenue. This feature ensures that all work is properly accounted for and billed, improving the firm's profitability and providing transparency to clients.
• ‍Document management: Accounting engagements involve handling numerous sensitive documents. A robust document management system helps maintain organization, ensures version control, and facilitates easy retrieval of information when needed, all while maintaining security and confidentiality.

• Client portal with client engagement tools: This feature enhances client communication and collaboration. It provides a secure platform for sharing documents, obtaining approvals, and keeping clients informed about the progress of their engagements, which is crucial for maintaining strong client relationships.

• Reporting and analytics: These tools help firms gain insights into their operations, such as staff utilization rates, project profitability, and overall firm performance. This data is essential for making informed business decisions and identifying areas for improvement.

• Integration with other business solutions: Accounting firms typically use various specialized software for different functions (e.g., tax preparation, audit tools). Integration capabilities ensure smooth data flow between systems, reducing manual data entry and the potential for errors.

With these essential features in mind, let's compare some of the top project management tools available for accounting firms.

Best Project Management Software for Accounting Firms

When it comes to choosing the best project management tool for your accounting firm, the options can seem overwhelming. Each solution offers a unique set of features, pricing structures, and specializations that cater to different needs within the accounting industry.

In this section, we'll compare some of the top contenders in the market, highlighting key features, pros, cons, and pricing. This comparison will help you make an informed decision based on your firm's specific requirements, size, and budget.

Keep in mind that the supporting data behind this comparison can change at any time as providers release new features and make changes to pricing structures.

Firm360

Firm360 is an accounting practice management software built by and for accountants. It’s best suited for firms that need accounting-specific features alongside predictable pricing and an established track record of efficiency gains.

Key Features:

• Document management
• Client management and secure client portal
• Time and billing
• Basic and advanced reporting options
• Payment collections via credit card and ACH
• Dedicated customer support
• Automated billing features
• E-signature
• Project management*
• Advanced integrations such as Zapier and Open API**
• Dedicated customer success manager**

*Available beginning with the Standard plan

**Available with the Premium plan

Pros:

• Automation capabilities
• Customization options
• E-signature integration
• Robust set of accounting-specific features
• Bi-weekly feature updates
• Transparent pricing
• Strong customer service reputation
• Built by and for accountants

Cons:

• No advanced IRS integration tools
• May have a steeper learning curve for some of the advanced features

Pricing:

• Basic Plan: $49/month per user (annual billing)
• Standard Plan: $79/month per user with a 3 user minimum (annual billing)
• Premium Plan: $99/month with a 3 user minimum (annual billing)

Canopy

Canopy is an accounting practice management tool that is best suited for tax-focused firms that need a feature-rich, customizable platform with options to add specific modules as their needs grow.

Key Features:

• Tax-specific features such as IRS transcript retrieval
• Client portal
• Document management
• Workflow management
• Time and billing
• AI insights

Pros:

• IRS-integrated transcript access
• Modular pricing and flexibility

Cons:

• Pricing can get expensive
• Complex setup for small firms

Pricing:

• Client Engagement Platform: $150/month for unlimited users, covering basic client management and engagement features.
• Document Management: $36/user per month.
• Workflow Management: $31/user per month.
• Time and Billing: $22/user per month

Canopy prices by module as opposed to plan levels, so the pricing scenario is not as straightforward as some other solutions. The pricing starts at a steep $150/month for the client engagement platform, plus an incremental cost of $89/user per month for the remainder of the full suite. So, for the first user the all-in price is $239 per month.

Asana

Asana is a project management tool best suited for small firms just getting started; however, it may be quickly outgrown.

Key Features:

• Workflow and project management
• Workflow automation
• Task dashboards
• Mobile app
• Comments, @mentions and notifications
• Reporting
• Team management
• Extensive template library (non-accounting specific)

Pros:

• Simple to set up new accounts and workflows
• Collaboration with commenting, proofing and file sharing
• Robust integrations with tools like Slack, Gmail, Google Docs, and Dropbox
• Free version available for small teams

Cons:

• Notifications are easy to lose in inbox
• Not specifically designed for accounting firms
• No two-way email sync integration
• Lack of CRM capabilities
• No direct time tracking or time budgeting
• No direct integration with accounting software
• No client portal

Pricing:

• Basic: $0/month per user
• Premium: $10.99/month per user (annual billing)
• Advanced: $24.99/month per user (annual billing)
• Enterprise: Pricing not listed publicly

Basecamp

Basecamp is a project management platform best suited for smaller teams of entrepreneurs, freelancers, small businesses, and departments within large organizations.

Key Features:

• One-page 'Home' dashboard
• Task management
• Project timelines
• Document hub
• Chat and messaging
• Scheduling
• Reporting

Pros:

• 'Home' dashboard offers a centralized view for tasks, schedule, lists, and assignments
• Auto-reminders for tasks and messages
• Cloud-based
• Offers a free trial

Cons:

• Not specifically designed for accounting firms
• Limited project views
• No budgeting features

Pricing:

• Basic: $15/month per user (annual billing)
• Pro: $299/month with unlimited users (annual billing)

ClickUp

ClickUp is a project management software that’s best suited for teams that need highly-customizable workflows and reports. However, it may not easily meet accounting firm needs.

Key features:

• Workflow automation
• Real-time chat
• Project and task dashboards
• ClickUp AI for smart suggestions and email writing
• Templates
• Document hub
• Reporting, time-tracking, and analytics

Pros:

• Highly customizable
• Offers visualization tools for advanced project views
• Sends daily performance reports
• Integrates with tools like Slack, Harvest, Google Drive, and Outlook
• Cloud-based
• 24/7 live customer support
• Offers free trials

Cons:

• Doesn't directly integrate with accounting software
• No built-in client portal
• Limited accounting templates
• Not accounting-specific

Pricing:

• Free: $0/month per user
• Unlimited: $7/month per user (annual billing)
• Business: $12/month per user (annual billing)
• Enterprise: Custom pricing

SmartSheet

SmartSheet project management tool best suited for large teams or organizations that need a highly customizable solution. However, it may require significant time to set up and optimize for accounting-specific needs.

Key Features:

• Customizable project and task templates
• Resource management tools
• Automation features (alerts and reminders)
• Integration with various apps (Google Drive, Microsoft Office)
• Mobile app

Pros:

• Flexible platform that can be tailored to different organizational needs
• Robust reporting and analytics features
• Collaboration tools to promote team communication
• Reminiscent of spreadsheets, so may appeal to users transitioning from project management by Excel

Cons:

• Some users may find the interface overwhelming or difficult to navigate
• Pricing can be relatively expensive compared to other project management tools
• Not specifically designed for accounting firms

Pricing:

• Free trial available
• Pro: $7/month per user (annual billing)
• Business: $25/month per user (annual billing)
• Enterprise: Custom pricing

Trello

Trello is a general project management solution that can best be adapted for accounting practice management by solo practitioners or small bookkeeping startups.

Key Features:

• Workflow automation
• Workspace views (tables, calendars, etc.)
• Advanced checklists
• Templates available
• Custom fields
• Dashboard views

Pros:

• User-friendly
• Trello boards (similar to Kanban boards) help visualize work by status
• Integrates with common tools like Salesforce, Slack, and Google Drive
• Desktop and mobile apps
• Offers a free trial for Premium plans

Cons:

• Not accounting-specific
• No pre-built accounting templates
• Limited recurring work capabilities
• No automatic client reminders
• No direct email integration
• No CRM capabilities
• No native time tracking or time budgeting
• No direct accounting software integration
• No client portal

Pricing:

• Basic Free: $0/month per user
• Standard: $5/month per user (annual billing)
• Premium: $10/month per user (annual billing)
• Enterprise: Starts at $17.50/month per user (annual billing)

While understanding the features and benefits of the various software solutions is crucial, seeing real-world examples can provide valuable insights. Let's look at some case studies of accounting firms that have successfully implemented practice management software.

Case Studies: Successful Project Management in Accounting Firms

Accounting firms that are supported with the right practice management tool recognize significant advantages.

Banks, Gray & Crumpler, PLLC was able to grow average revenue generated per employee by over 25%, add 20% more employees, realize a 50% productivity improvement, and gain much better visibility into their team’s project workload.

Spivey & Morton, CPA, PA realized improvements in productivity, project visibility, client communication, and remote work effectiveness.

Millikan CPAs & Advisors grew its team size by 50% while also increasing productivity and output of each team member, on top of implementing a highly effective method for secure communication with clients.

As these real-world examples illustrate, the right tool can transform an accounting firm's operations and bottom line.

Conclusion: Elevating Your Accounting Practice with Effective Project Management

In conclusion, effective project management is not just a nice-to-have for accounting firms — it's a critical component of success.

From improving resource allocation and increasing profitability to enhancing client satisfaction and team competencies, the benefits of robust project management are clear and far-reaching. While challenges exist, they can be overcome with the right strategies and tools.

By carefully considering your firm's unique needs and choosing a project management solution that aligns with those needs, you can elevate your firm's performance, streamline operations, and ultimately deliver greater value to your clients.

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