If someone was to ask me what is the most valuable asset within an accounting practice, my answer would be that it’s a combination of our expertise, our systems and our processes. These things make us different from our competitors. How often have you heard firms say it’s their people or their processes that make them stand out from the opposition?

Many practices go to great length to ensure their data is backed up and managed. Efficient disaster recovery plans are in place, but what are we doing to protect our knowledge.

What does your firm do when you lose an employee who has years of specialist product knowledge? Do you simply let these people walk out the door? We use insurance to protect physical assets, but what about some of the other assets we value most?

What if one of the key long-time staff members decided to move on or retire?  The new employee has to then pick up the pieces; it can take years to build up that same level of knowledge as the person that has left.

Many firms have implemented a document management system and are taking steps towards paperless processes. However, what we were clearly lacking is a system to manage the knowledge in our accounting practice – our most important asset.

How much time do you spend waiting to talk to the expert in the firm, or finding out who to talk to? How many times have you not been able to find the answer, or looked in multiple places – how much time does that take?

Knowledge for an employee can be a double edge sword. The more skilled an employee is, the more they will be called upon and interrupted to answer questions from other employees, which continually detracts from their productivity. The way to overcome this is to document the questions and answers so they can be searched and reused.

Practices need to get more serious about knowledge and protect it like we protect our physical assets; they need to have a knowledge culture.

To protect a practice, knowledge must be stored, be searchable, and be accessed remotely which is particularly important for many practitioners who spend so much time out of the office. Employees must be the core of any repository so they can ask questions, the subject experts must able to answer questions and distribute key information that they discover that other employees can use.

The saleability of the practice will be enhanced if long-term knowledge can be transferred let alone the benefits of searching a database, questioning the system and uploading critical documents for future use. This would naturally lead to improvement in efficiency and practice management.

Developing and managing a knowledge culture is a smart way to “future proof” the firm and protect this most valuable asset.

Join David Smith and Mark Holton On Tour this September in Brisbane, Sydney and Melbourne discussing the big issues facing accounting firms. Details here.