The biggest threats to your firm’s productivity are often the ones you don’t see. They are the small, repetitive, and inefficient tasks that have become so ingrained in your daily routine that no one questions them anymore. Manually creating reports that could be automated, searching through chaotic folder structures, or using multiple disconnected apps to manage a single client—these are the hidden leaks sinking your billable hours. To fix them, you first have to find them. This guide will help you diagnose your firm’s operational health, identify those costly inefficiencies, and provide actionable steps for maximizing capacity by streamlining your core workflows.
[vc_row type=”in_container” full_screen_row_position=”middle” column_margin=”default” column_direction=”default” column_direction_tablet=”default” column_direction_phone=”default” scene_position=”center” text_color=”dark” text_align=”left” row_border_radius=”none” row_border_radius_applies=”bg” overflow=”visible” overlay_strength=”0.3″ gradient_direction=”left_to_right” shape_divider_position=”bottom” bg_image_animation=”none”][vc_column column_padding=”no-extra-padding” column_padding_tablet=”inherit” column_padding_phone=”inherit” column_padding_position=”all” column_element_spacing=”default” background_color_opacity=”1″ background_hover_color_opacity=”1″ column_shadow=”none” column_border_radius=”none” column_link_target=”_self” column_position=”default” gradient_direction=”left_to_right” overlay_strength=”0.3″ width=”1/1″ tablet_width_inherit=”default” tablet_text_alignment=”default” phone_text_alignment=”default” animation_type=”default” bg_image_animation=”none” border_type=”simple” column_border_width=”none” column_border_style=”solid”][image_with_animation image_url=”96979″ image_size=”full” animation_type=”entrance” animation=”Fade In” hover_animation=”none” alignment=”center” border_radius=”none” box_shadow=”none” image_loading=”default” max_width=”50%” max_width_mobile=”default”][/vc_column][/vc_row][vc_row type=”in_container” full_screen_row_position=”middle” column_margin=”default” column_direction=”default” column_direction_tablet=”default” column_direction_phone=”default” scene_position=”center” text_color=”dark” text_align=”left” row_border_radius=”none” row_border_radius_applies=”bg” overflow=”visible” overlay_strength=”0.3″ gradient_direction=”left_to_right” shape_divider_position=”bottom” bg_image_animation=”none”][vc_column column_padding=”no-extra-padding” column_padding_tablet=”inherit” column_padding_phone=”inherit” column_padding_position=”all” column_element_spacing=”default” background_color_opacity=”1″ background_hover_color_opacity=”1″ column_shadow=”none” column_border_radius=”none” column_link_target=”_self” column_position=”default” gradient_direction=”left_to_right” overlay_strength=”0.3″ width=”1/1″ tablet_width_inherit=”default” tablet_text_alignment=”default” phone_text_alignment=”default” animation_type=”default” bg_image_animation=”none” border_type=”simple” column_border_width=”none” column_border_style=”solid”][vc_column_text]Are you ready for an age-old cliché? Well, here it is: Time is money.
For accountants this is especially true. In fact, the average accountant charges $37 USD per hour. But are all of an accountant’s potentially billable hours spent wisely?
According to Intuit Quickbook’s Firm of the Future, accountants spend up to 1.5 hours daily on activities they shouldn’t be doing. This includes collecting client information, scheduling work, answering non-technical queries, and importing data. The end result is a loss of $55 daily, $275 weekly and $14,300 a year — and that’s just for a single accountant.
Reclaiming this lost time means supporting your team by making sure they can go straight to productive jobs without getting held up by admin that’s taking up their time with little to show for it.
So, where to begin? A good way to determine whether your staff are maximizing their billable hours is to invest in capacity planning.
Capacity planning 101
A simple formula will tell you whether or not your practice is operating at its maximum earning potential and help you scale your practice.
All it comes down to is identifying how many billable hours are available amongst your staff and comparing that against the amount you’re currently charging out.
Here’s a quick break down of what that looks like:
Calculate the available hours of each team member:
(52 weeks – annual/ sick/ training leave)
x the chargeable time for their role:
(e.g. how many hours are realistically billable if admin was automated)
x the hourly charge out rate for their time.
Learn more about capacity planning and structuring your team in this article.
What is Capacity Maximization?
Capacity maximization is about making the best use of all the resources your business has available. This goes beyond just your team’s time. It includes your technology, software subscriptions, and even your physical office space. The goal is to get the most value out of these resources without creating waste or burning out your team.
For a professional services firm, this means looking at the entire operational picture. It’s not just about how many hours your team can bill, but also how efficiently they can perform their work. Are they spending valuable time searching for documents in a messy folder system or manually creating reports that could be automated? These small inefficiencies add up, chipping away at your firm’s total capacity.
Effectively maximizing capacity is about creating streamlined workflows that allow your team to focus on high-value, skilled work. When your documents, emails, and client communications are all in one place, you eliminate the administrative friction that consumes billable hours. It’s a strategic approach to ensure that every part of your business—from your people to your processes—is contributing to its full potential.
Understanding Capacity Utilization
Capacity utilization is the metric you use to measure how much of your total potential capacity you’re actually using. It’s usually expressed as a percentage. For example, if your team has a total of 1,000 available work hours in a month and they complete 800 hours of billable work, your capacity utilization is 80%.
Tracking this number is crucial. It gives you a clear, data-driven view of your firm’s operational health. A low utilization rate might indicate that you don’t have enough client work or that your processes are inefficient. A consistently high rate, on the other hand, might signal that your team is overworked and you need to hire more staff. It’s a key performance indicator that helps you make informed decisions about staffing, resource allocation, and growth.
The Risks of Pushing for 100% Capacity
While it might seem logical to aim for 100% capacity utilization, pushing your team to their absolute limit is often counterproductive. Operating at full capacity leaves no room for error, unexpected events, or simple human needs. When every minute of the day is scheduled, there’s no flexibility to handle an urgent client request or fix an unforeseen problem without causing delays elsewhere.
This constant pressure can lead to significant problems. The most immediate risk is employee burnout. When people are consistently overworked, their morale, engagement, and quality of work suffer. This can lead to higher employee turnover, which comes with its own significant costs in recruitment and training. For professional services firms where expertise is your main asset, losing skilled team members is a major blow.
Furthermore, when your team is rushed, the quality of their work inevitably declines. Small mistakes can slip through, potentially damaging client relationships and your firm’s reputation. Reworking these mistakes also consumes time that could have been spent on other productive tasks, creating a cycle of inefficiency. A sustainable and healthy business builds in a buffer, typically aiming for a utilization rate around 80-85% to allow for flexibility and maintain high standards.
Why Maximizing Capacity Can Stifle Innovation
One of the biggest hidden costs of running at 100% capacity is the loss of innovation. You can’t expect your team to be completely focused on execution and simultaneously come up with creative solutions or process improvements. Innovation requires mental space—time to think, experiment, and collaborate on better ways of working.
When your team is just trying to get through a mountain of tasks, they don’t have the bandwidth to step back and ask, “Could we do this more efficiently?” This is a huge waste of talent. You hired smart, capable professionals, not just task-doers. By keeping them constantly busy, you prevent them from using their expertise to improve the business itself. That “downtime” is often where the best ideas for saving time and improving client service are born.
How to Diagnose Your Firm’s Capacity
At this stage, you’ll have the total billable hours you can charge at your firm and a means of measuring whether you’re operating over or under capacity.
From there you’ll have a couple of strategic decisions to make. If you’re operating over capacity, you may need to expand your team or consider reducing the workload so that you’re not risking staff burnout. If you’re under, it may be time to think about how you can support staff and free up their time.
What to Do When You’re Under Capacity
1) Review your staff’s workload
- Begin by looking at the workload of your staff. It’s possible that they may be taking on too many jobs and require some kind of delegation to open up more time in their day.
2) Examine their workflows
- Look at the processes/workflows staff use in their day-to-day. Are the processes in place efficient or are they slowing down the pace of work and limiting the capacity of your staff?
- Take for example the process of collecting client information. Do staff have to go back and forth via email to request documents or save files into your folders from another source? If so, you should be looking for a cleaner workflow. In SuiteFiles, accountants can request files from their clients which automatically save in to their folder structure.
- How about document approvals? Do they have visibility of everything in review and are they able to edit without making copies? If not, evaluate your document approval workflows.
3) Provide training
- Additional training can go a long way in helping your team work more efficiently. This could involve training in a piece of software you’re using, improving communication skills, or putting some time management strategies in place.
Remember that capacity planning isn’t a set and forget type formula. You’ll need to reexamine as your capacity changes so you can get a clear idea of how your business is operating and where to invest resources or make adjustments.[/vc_column_text][divider line_type=”No Line”][/vc_column][/vc_row][vc_row type=”full_width_background” full_screen_row_position=”middle” column_margin=”default” column_direction=”default” column_direction_tablet=”default” column_direction_phone=”default” bg_color=”#001333″ scene_position=”center” text_color=”light” text_align=”left” row_border_radius=”none” row_border_radius_applies=”bg” overflow=”visible” advanced_gradient_angle=”0″ overlay_strength=”0.3″ gradient_direction=”left_to_right” shape_divider_position=”bottom” bg_image_animation=”none” gradient_type=”default” shape_type=””][vc_column column_padding=”no-extra-padding” column_padding_tablet=”inherit” column_padding_phone=”inherit” column_padding_position=”all” column_element_spacing=”default” background_color_opacity=”1″ background_hover_color_opacity=”1″ column_shadow=”none” column_border_radius=”none” column_link_target=”_self” column_position=”default” gradient_direction=”left_to_right” overlay_strength=”0.3″ width=”1/1″ tablet_width_inherit=”default” tablet_text_alignment=”default” phone_text_alignment=”default” animation_type=”default” bg_image_animation=”none” border_type=”simple” column_border_width=”none” column_border_style=”solid”][divider line_type=”No Line”][vc_column_text]
How to Increase Average Billable Hours
When working in flow, executives found that they were 500% more productive. In this 6-page guide we’ll show you how you can consistently reach flow state and get the most out of your workday. [/vc_column_text][vc_row_inner column_margin=”default” column_direction=”default” column_direction_tablet=”default” column_direction_phone=”default” text_align=”left” row_position=”default” row_position_tablet=”inherit” row_position_phone=”inherit” overflow=”visible” pointer_events=”all”][vc_column_inner column_padding=”no-extra-padding” column_padding_tablet=”inherit” column_padding_phone=”inherit” column_padding_position=”all” column_element_spacing=”default” background_color_opacity=”1″ background_hover_color_opacity=”1″ column_shadow=”none” column_border_radius=”none” column_link_target=”_self” gradient_direction=”left_to_right” overlay_strength=”0.3″ width=”1/1″ tablet_width_inherit=”default” animation_type=”default” bg_image_animation=”none” border_type=”simple” column_border_width=”none” column_border_style=”solid”][divider line_type=”No Line”][nectar_btn size=”medium” open_new_tab=”true” button_style=”regular” button_color_2=”Extra-Color-1″ icon_family=”default_arrow” text=”Get the guide” url=”https://www.suitefiles.com/landing/accountants-guide-to-flow-state/”][/vc_column_inner][/vc_row_inner][divider line_type=”No Line”][divider line_type=”No Line”][/vc_column][/vc_row]
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Strategies for Maximizing Capacity Across Industries
Once you have a clear picture of your current capacity, you can start looking for ways to improve it. The right approach depends heavily on your industry. A manufacturing plant measures capacity in units produced, while a law firm measures it in billable hours. Though the metrics differ, the goal is the same: getting the most value out of your available resources without overwhelming your team.
For businesses that produce physical goods, maximizing capacity often involves optimizing machinery, materials, and physical space. In contrast, knowledge-based industries focus on optimizing their people’s time and intellectual output. Let’s look at some specific strategies for each of these environments.
In Manufacturing and Production
In a manufacturing setting, capacity is tangible. It’s the maximum number of products your facility can create within a specific timeframe. Increasing this number requires a close look at your entire production process, from the moment raw materials arrive to the second a finished product ships out. The key is to identify and eliminate anything that causes delays or waste, ensuring a smooth and continuous flow of work.
Implement Lean Principles
The core idea behind lean manufacturing is to do more with less. As TriVista explains, these principles “focus on giving customers the most value while getting rid of waste.” Waste isn’t just about leftover materials; it includes wasted time, unnecessary movement, and defects. By mapping out your production process, you can spot these areas of inefficiency and streamline your operations to focus only on activities that add real value for your customers.
Leverage Automation and Robotics
Introducing automation is a powerful way to get more out of your production line. According to Augury, you can “use automation and robotics to increase throughput and consistency.” Machines can handle repetitive tasks faster and more accurately than humans, and they don’t get tired. This not only increases your output but also frees up your skilled workers to focus on more complex problem-solving and quality control tasks where their expertise is truly needed.
Prioritize Equipment Maintenance
An unexpected equipment failure can bring your entire operation to a halt. That’s why proactive maintenance is so important. As the experts at Dozuki note, you should “regularly check, oil, and fix equipment. This prevents expensive breakdowns and keeps production running without stops.” Scheduling routine maintenance may cause small, planned pauses in production, but it prevents much longer, unplanned shutdowns that cost you time and money.
Identify and Address Bottlenecks
A bottleneck is any point in your process that slows everything else down. Dozuki advises leaders to “find and fix bottlenecks… Find these slowdowns and figure out their main cause to prevent bigger problems.” Your entire production line can only move as fast as its slowest part. Identifying these chokepoints—whether it’s a single machine, a specific station, or a manual process—and finding ways to speed them up can significantly increase your overall capacity.
In Knowledge-Based Work
For professional services like accounting, legal, or engineering firms, capacity is all about time and expertise. Your team’s collective hours are your inventory. Maximizing capacity in this context means ensuring those hours are spent on high-value, billable work. It involves creating efficient workflows, balancing assignments, and using technology to handle the administrative tasks that can consume a surprising amount of your team’s day.
Align Work with Business Goals
It’s not enough for your team to be busy; they need to be busy with the right things. Celoxis recommends you “ensure that the work being done aligns with overall business objectives and strategic goals.” This means prioritizing projects that directly contribute to the company’s growth and success. By automating low-value administrative work, like filing documents and chasing client information, you give your team more time to focus on strategic, billable activities that truly matter.
Balance Team Workloads
An uneven distribution of work is a recipe for problems. Some team members may be overwhelmed and heading for burnout, while others are underutilized and disengaged. The solution is to “use data to ensure that teams and individuals are neither overworked nor underutilized.” Having clear visibility into everyone’s projects and deadlines allows you to distribute tasks more effectively, keeping the entire team productive and motivated. Centralized platforms with clear document management features can provide the oversight needed to make these decisions.
Continuously Monitor and Adjust Plans
Capacity planning is not a one-and-done activity. Projects evolve, deadlines shift, and unexpected issues arise. That’s why it’s essential to “continuously monitor capacity and adjust plans as work evolves.” Regular check-ins and a flexible approach allow you to adapt to changing circumstances. This ensures you can reallocate resources as needed and keep projects on track without overloading your team.
Core Principles for Effective Capacity Planning
Whether you’re managing a factory floor or a team of accountants, a few core principles underpin any successful capacity planning strategy. These fundamentals help you create a realistic, flexible, and sustainable plan for growth. They ensure you’re not just reacting to today’s demands but are also preparing for tomorrow’s opportunities. By building your strategy on this foundation, you can make smarter decisions, use your resources more effectively, and keep your operations running smoothly.
Make Data-Driven Decisions
Guesswork has no place in capacity planning. To make effective choices, you need solid information. As Somengil points out, you should “make decisions based on accurate and up-to-date information on performance and demand.” This means tracking key metrics like project completion times, individual workloads, and client requests. With this data, you can accurately forecast future needs and allocate your resources with confidence, rather than relying on gut feelings.
Integrate Long-Range Planning
Your daily and weekly capacity plans should always serve your larger business goals. It’s crucial to “integrate capacity planning with long-range planning and product roadmaps to avoid misalignments.” If you know your firm plans to take on more clients in the next quarter, you need to start thinking about the required capacity now. Aligning your short-term resource allocation with your long-term vision ensures that you have the people and tools in place to achieve your future goals.
Actively Manage Downtime
Downtime is inevitable, but it doesn’t have to be disruptive. Whether it’s planned equipment maintenance in a factory or a team member’s vacation, you can minimize its impact. The key is to “track and minimize planned downtime… to increase output.” By scheduling these breaks strategically—for instance, during slower business periods—you can ensure that you maintain productivity and meet your deadlines without interruption. Proactive management turns potential disruptions into predictable parts of your workflow.
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Frequently Asked Questions
What’s the difference between maximizing capacity and just making my team work longer hours? Maximizing capacity is about working smarter, not harder. It’s not about adding more hours to the day, but about making the existing hours more productive. The goal is to remove the small, time-consuming administrative tasks that get in the way of high-value work. By streamlining your workflows, you free up your team to focus on the skilled, billable tasks they were hired to do.
You mentioned aiming for 100% capacity is a bad idea. What’s a more realistic target? Pushing for 100% utilization is a recipe for burnout and mistakes. A much healthier and more sustainable target is around 80-85%. This builds in a necessary buffer. It gives your team the flexibility to handle urgent client requests, fix unexpected problems, and collaborate on process improvements without falling behind. That space is essential for maintaining high-quality work and keeping your team engaged.
I’m not sure where to start. What’s the first step to diagnosing my firm’s capacity? The first step is to get a clear picture of where your team’s time is actually going. You can start by conducting a simple time audit for one week. Ask everyone to track their hours, making a specific note of time spent on non-billable administrative tasks like searching for files, manually entering data, or managing email chains. This will give you a concrete baseline and show you exactly where the biggest inefficiencies are.
How does better document management actually help increase my team’s capacity? Every minute your team spends searching for a document in a messy folder system is a minute they can’t bill to a client. A centralized document management system eliminates that wasted time. When everything from client files and emails to templates is in one organized place, workflows become much smoother. It automates the friction out of daily tasks, giving your skilled professionals more time to focus on their actual jobs.
My firm is under capacity. Does that just mean we need more clients? Not always. Before you focus on bringing in new business, take a close look at your internal processes. Being under capacity can be a symptom of inefficient workflows. If your team is spending a significant portion of their day on manual admin, they may have less time for billable work, making it seem like they have too much free time. By fixing those internal bottlenecks first, you might find you can handle more work for your existing clients.
Key Takeaways
- Audit your daily workflows to find hidden inefficiencies: Repetitive admin tasks like chasing client documents or manual report creation consume valuable billable hours. Systematizing these processes is the fastest way to reclaim your team’s time for more important work.
- Treat capacity as a strategic buffer, not a limit to be maxed out: Operating at 100% utilization stifles innovation and leads to burnout. Aiming for a sustainable 80-85% rate protects your team’s well-being and creates the space needed for creative problem-solving.
- Calculate your firm’s true capacity to make smarter decisions: Understanding your team’s available billable hours versus their current workload provides a clear picture of your operational health, showing you exactly where to adjust processes, delegate tasks, or invest in better tools.
