Case Study

With more than 1400 tax returns to file each year, find out how McKerley & Noonan’s progressive approach to full service accounting has enabled the firm to go completely paperless, using LeanKit to track and manage its work.

Customer Profile

McKerley & Noonan is a Nashville accounting firm that caters to small businesses and individuals that need tax advice/preparation, bookkeeping, audits/compilations, succession planning and general business advice.

Accounting firm that provides tax, audit, advisory, merger, and acquisition services

Clients include local small businesses, churches, other non-profit organizations and individuals

Founded in 1999 by 2 partners, the firm comprises a team of 12 accountants

We interviewed Michael McKerley, Partner, and Justin Schellenberg, CPA, to understand how the firm is using LeanKit.

Tell us about your firm.

Back in 1999, Spike Noonan and I were bitten by the entrepreneurial bug and ventured out to build our own accounting firm. Today, that entrepreneurial spirit still defines our approach. Our top priority is ensuring that clients receive the best service we can provide, leading to a very progressive outlook in the way we manage our work. An example of this is our decision to go completely paperless and manage everything we do in the cloud. In the accounting world, we’re ahead of the curve – most firms are still relying on whiteboards and paper trails to manage their work.

What does full service accounting entail?

The services we provide vary with each client from full bookkeeping to audits and tax returns. Tax returns make up a large part of our business; we file about 800 individual and 600 business returns each year. From mid-February through mid-April, busy season takes over - it’s such a hectic time of year preparing so many returns.

What’s involved in preparing and filing a tax return?

It’s a process that consists of many steps and involves many people. When a client requests that we prepare their taxes, the first step is to schedule the work. The assigned CPA then works on the return, which often requires a number of back and forths with the client to get additional information and clarifications.

Once the preparation phase is complete, the CPA passes the file to one of the Partners for review. We always like to have two sets of eyes look over a return to make sure we haven’t missed anything. We address any outstanding issues, and once we’re satisfied with the return, we assemble it for one of the Partners to sign before notifying the client. It then goes to billing before being mailed to the client for authorization and signature. Once the client returns it back to us, the final step of the process is to e-file the return.

With the number of tax returns you manage each year, how do you keep track of them all?

Before using LeanKit

That’s exactly why we implemented LeanKit! Preparing all those tax returns used to be a very manual process; it was extremely difficult to monitor the status of them all at any given time. Each time a tax return request was received, we created a physical folder to keep all of the client’s paperwork together. The folder would then get shuffled around the office to whoever was working on it during that step of the process.

Individually we might be working on 20 tax returns at one time, so it was hard enough to keep track of our own work let alone the entire team’s work. Some of us used spreadsheets, but there was no clear picture of who was working on what, or the status at any given time.

Did this cause any issues?

When the firm was smaller it wasn’t such a problem. I had 50 clients when we first started out, so it was easy to remember the details about each one. As our business grew it became harder to rely on memory. Things started to fall between the cracks and it impacted the level of customer service we were able to provide.

If a client called in to request a status update, most of the time we’d have to say that we’d call back later. We had no means of quickly knowing what stage it was at or who was working on it. We’d then have to yell across the office to see if anyone knew about it. Once we’d tracked it down we’d call the customer back. It wasn’t an effective or efficient way to manage our work and didn’t give a good impression to our clients.

Can you recall any specific examples?

I remember one time we had a client who submitted his tax return request in January. When April 15th came around I called him and said we’d have to request an extension as we were still waiting for him to provide us with some information. He was extremely upset with us. He had provided the information we needed back in January. Somehow we’d lost track of his return and didn’t realize it until it was too late.

In hindsight, it was embarrassing. But at the time, our management practices were consistent with how every other accounting firm was doing it. We were doing the best we could.

What brought you to LeanKit?

No other tools offer the same level of visualization AND flexibility.

We wanted to find a better way of doing things – but initially we didn’t know how. For a while we tried using the project management capabilities that are part of the Time & Billing application we use. But that wasn’t an effective solution; it was more like a beefed up spreadsheet that was hard to use. We’d have to scroll through a list of 700 items just to find the return we were looking for, and when we found it there wasn’t much information to go on.

We also knew that we wanted a tool that didn’t impose a process on us. Our process was fundamentally working fine, we just needed a better way to manage it. When we came across LeanKit, we realized it was a unique tool. It offers organizations a blank canvas to define your own process. We looked for other project management tools like it but couldn’t find anything that came close. No other tools offer the same level of visualization AND flexibility.

How did you go about implementing LeanKit?

The Partners immediately recognized the value of implementing LeanKit.

The first step was to create a demo board and use it to map out our existing process. We presented this to the Partners as a proof of concept. The Partners immediately recognized the value of implementing LeanKit and so we moved ahead with building out boards to manage our tax return and auditing processes.

The whole team got involved at this point, fine-tuning the board to make sure it accurately reflected the way we work. We then rolled it out in January 2013, just in time for the busy season.

How has LeanKit changed the way your firm works?

Things don’t fall between the cracks now – we have a lot more confidence in the way we manage our work.

Implementing LeanKit was the final step in our initiative to go paperless. We’d already started using an integrated suite of cloud-hosted accounting tools. This eliminated the paper trail as documents are scanned in and then managed electronically. But we still needed a way to track and manage our work electronically. Now, instead of creating a physical folder when someone brings in a tax return request, we create a new card on our LeanKit board.

This means that not only do we have a bigger picture view across all of our tax returns, we can also open up a card and instantly get the full story of what’s going on. I can honestly say that things don’t fall between the cracks now – we have a lot more confidence in the way we manage our work. Previously it felt like we weren’t really on top of things, often reacting to situations rather than seeing things coming.

After using LeanKit

Overall we’re much more proactive in the way we manage our work now. Everyone on the team is committed to keeping the cards updated with comments and information as each tax return moves from stage to stage. We get a great sense of accomplishment moving the cards across the board; it’s very satisfying moving them to ‘done’.

If you had to list 3 benefits that LeanKit provides what would they be?

At the top of my list would be the ability to see an accurate, up-to-date status of all the work we have in process. The visibility this provides is tremendous as it gives us the opportunity to step in, find out where the holdups are and move things along before they become a problem.

Second would have to be improved customer service. When a client calls in we can now provide them with a status update immediately. The client’s experience is much more personal and professional.

Third is the flexibility LeanKit gives us. I mentioned earlier that we manage everything in the cloud now. All of our associates can work anytime, anywhere and easily access the documents and information they need to be effective. This provides a much healthier work-life balance.

Is there any functionality in LeanKit that you particularly like?

The flexible board editor that lets you design your own process is unique to LeanKit. And the fact that we can tweak it and make improvements whenever we want to. We’ve been impressed by its overall ease of use – setting it up and getting everyone up to speed was very straightforward. It’s as simple as ‘click it and move it’.

It's as simple as 'click it and move it'.

The flexible board editor that lets you design your own process is unique to LeanKit. And the fact that we can tweak it and make improvements whenever we want to. We’ve been impressed by its overall ease of use – setting it up and getting everyone up to speed was very straightforward. It’s as simple as ‘click it and move it’.

I also like using the task boards – particularly for working on audits. There are so many sub-tasks to do for each step of the process, and the task boards are a great way to make sure nothing gets missed.

What are your future plans for LeanKit?

We’re planning to expand the way we use LeanKit in a number of ways. First, we want to create more boards. For now we’ve been managing all of our tax returns on one board, but as the amount of work we manage on a single board continues to increase we want to split it out – so a board for business returns and a separate one for personal returns. We also want to look at how we can use boards to manage some of our other services such as exit planning.

We also want to make better use of the reporting and metrics that LeanKit captures. For example, by looking at our ‘cycle time’ data we’ve discovered that if a client submits their tax return to us in January we can get it done in about two days. The closer it gets to April 15th the longer it takes due to the volume of work we’re dealing with. So if you bring your tax return to us in March you’ll need to allow 15 days for us to prepare it. We can make use business intelligence data like this to better set our clients’ expectations. It’s very insightful.

Would you recommend LeanKit to others?

Yes. In fact, we already do recommend LeanKit to our own clients. We work with a lot of small businesses who still rely on manual processes or list-based project management tools. Many of them are struggling from lack of visibility in the same way we were. These organizations don’t want to invest a lot in heavy project management tools. LeanKit is an ideal fit – it’s lightweight, versatile and helps organizations become so much more efficient.

Thanks McKerley & Noonan, for sharing your story with us!