Bill padding row reaches accountants

Bill padding row reaches accountants

The controversy surrounding bill padding threatened to reach the Big Four this week after the country's biggest accountancy firm admitted it set tough 'utilisation targets' for client facing staff.

Link: Fee padding is rampant, say FDs

The news comes after firms were warned to be wary of bill padding following the publication of a memo from lawyers at City law firm Clifford Chance complaining of ‘dehumanising conditions’ that ‘promote padding of hours’ by staff.

Last week, an Accountancy Age survey of UK FDs revealed 80% believed bills from accountants and auditors had been padded. The admission by PricewaterhouseCoopers that staff in the UK have to meet demanding utilisation targets will heighten concern among many observers that pressure on staff could lead to padding.

A source at PwC told Accountancy Age that within the firm’s UK global risk management services group, utilisation targets (time spent on client work) for client-facing staff ranged from 70% of time spent working on client affairs for a junior executive to 55% for a senior manager.

Some staff inside the firm are clearly concerned about the pressures created by dealing with the targets – understood to be analysed on a fortnightly basis and a contributory factor in the calculation of bonuses.

It is also believed the targets played a role in a recent round of redundancies within the risk management group.

A PwC spokesman said: ‘PwC does manage its business in part by using hourly summaries of its people in work, but although we monitor utilisation rates, we do not seek to impose across the board hourly targets.’

The spokesman did admit that targets could be set within divisions and that these may be used as a measure of the employee’s performance. But he denied the company has ever engaged in bill padding and said this issue and utilisation rates were not connected.

Among the rest of the Big Four, KPMG denied it set employees utilisation targets. Ernst & Young and Deloitte & Touche were unavailable for comment.

Share

Subscribe to get your daily business insights

Resources & Whitepapers

Why Professional Services Firms Should Ditch Folders and Embrace Metadata
Professional Services

Why Professional Services Firms Should Ditch Folders and Embrace Metadata

3y

Why Professional Services Firms Should Ditch Folde...

In the past decade, the professional services industry has transformed significantly. Digital disruptions, increased competition, and changing market ...

View resource
2 Vital keys to Remaining Competitive for Professional Services Firms

2 Vital keys to Remaining Competitive for Professional Services Firms

3y

2 Vital keys to Remaining Competitive for Professi...

In recent months, professional services firms are facing more pressure than ever to deliver value to clients. Often, clients look at the firms own inf...

View resource
Turn Accounts Payable into a value-engine
Accounting Firms

Turn Accounts Payable into a value-engine

3y

Turn Accounts Payable into a value-engine

In a world of instant results and automated workloads, the potential for AP to drive insights and transform results is enormous. But, if you’re still ...

View resource
Digital Links: A guide to MTD in 2021
Making Tax Digital

Digital Links: A guide to MTD in 2021

3y

Digital Links: A guide to MTD in 2021

The first phase of Making Tax Digital (MTD) saw the requirement for the digital submission of the VAT Return using compliant software. That’s now behi...

View resource