Using AI to Illuminate the True Cost—and Value—of Service Delivery

In the world of professional services—and accounting in particular—understanding the true cost of service delivery can feel like chasing a ghost. Billable hours can slip through the cracks, and a lack of reliable data makes it nearly impossible to accurately charge clients or pinpoint inefficiencies. We recently spoke with Chris Gallo, a partner at a top 50 accounting firm, and he shared how embracing AI-driven timekeeping transformed his firm’s ability to get paid for the value they actually deliver. And his journey underscores a key truth: we can’t optimize what we can’t measure.

The Starting Point: A Culture Ripe for Change

Chris joined his firm when it was on the cusp of rapid growth. Over the years, multiple service lines (Accounting, Payroll, Technology, VCFO, Intelligence and Analytics) were merged under one umbrella. While the firm was known for being forward-thinking, one area remained stubbornly out of date: time and billing.

“We’d grown so much that we had no idea which clients were profitable—or how much time we actually spent servicing them. Our staff, meanwhile, hated the old-school, manual approach to timesheets,” Gallo says.

With a slew of cutting-edge tools for other functions, Chris saw the next big opportunity: AI for timekeeping.

The AI Revelation: Data Has No Agenda

When the firm trialed Laurel’s AI Time platform with a small group of employees, the reaction was split:

• Half the team—the meticulous timekeepers—questioned the need for yet another tool
• The other half—those who struggled with timesheets—loved the automation and accuracy

As Chris described it, “Those who hated timekeeping found the AI invaluable because it captured everything in real time. The people who were already good at timekeeping wondered if it was just more work. But the results spoke for themselves.”

Within weeks, the firm discovered a glaring truth: some engagements used hundreds more hours than initially scoped—yet they still charged only for the assumed workload. For the first time, the firm could see data across multiple service lines and pull it into one snapshot. That information became vital for capacity planning, billing conversations, and resource allocation.

Getting Paid for Real Value

Professional services sometimes shy away from tough billing conversations. But as Chris put it, “We strive to provide our clients with more value than they pay for so we need to truly understand what is being charged vs what we are doing and how much it costs.  Understanding time allows us to understand true cost.  If time and cost is way out of line in the other direction then we need to have a conversation with our clients, and they respect that as well.”

Armed with irrefutable data—captured automatically by the AI Time platform—the firm’s professionals could now approach clients confidently to renegotiate fees or expand the scope. They often uncovered changes in the client’s business that had quietly increased workloads. The conversation shifted from guesswork to facts:

• Before: We suspect we’re spending too many hours on your work.
• After: Here’s concrete proof of how many hours our team puts in on your behalf each week. Let’s talk about adjusting the fee.

Unsurprisingly, many clients responded positively. When shown hard numbers, they understood the need for higher compensation or a more clearly defined scope.

Embracing the Good and the Bad

AI shines a spotlight on both profitable engagements and internal inefficiencies. It’s never fun to see wasted hours or flawed processes, but now the firm knows exactly where it’s leaking resources. “Sometimes the data showed we were simply doing the job poorly—too many review cycles, unclear internal communication," Gallo said. "We couldn’t bill the client for our own inefficiencies. But the data made it clear where we needed to improve.”

This understanding of the good and the bad—uncovering under-billing and revealing operational blind spots—has led to a culture of continuous improvement. The team can apply data to effectively optimize processes, streamline tasks, and reduce overhead, ultimately boosting both margins and morale.

Capacity Planning: Putting the Right People on the Right Tasks

One of the biggest wins for Chris was capacity planning. With AI-driven digital work collection, leadership finally saw who was doing what for each client. Patterns emerged:

• Some professionals thrived on complex technical tasks (like specialized tax work)
• Others excelled at routine tasks or client-facing roles

By reassigning tasks to the individuals most skilled in them, the firm quickly improved productivity and job satisfaction. Team members appreciated the chance to focus on work they enjoy and do well, rather than spreading themselves thin across the wrong engagements.

The Road Ahead: Total Client View

Chris’s ultimate goal: a 360° view of client profitability across multiple service lines: “We want to know what it really costs—time-wise and resource-wise—to deliver wealth management, tax, payroll, and audit services to a single client. When we see the full picture, we can price our services strategically and avoid guessing about profitability.”

By extending Laurel’s AI Time platform across the entire organization, the firm can continue to refine how they package services and ensure that economics match the true workload.

Chris's Key Takeaways

1. Data Is the Key to Fair and Effective Billing We can’t have accurate billing discussions without objective, real-time data about hours worked and tasks performed.
2. AI Helps Overcome Manual Limitations Automating time capture reduces guesswork, alleviates staff burden, and prevents leaving revenue on the table.
3. Cultural Buy-In Matters Some team members will resist new technology, especially if they’re already adept at manual timekeeping. We needed to show them the bigger picture—firm profitability, reduced write-offs, and improved client relationships.
4. Capacity Planning Improves Service Quality With better data, we can match the right people to the right tasks, boosting both efficiency and employee satisfaction.
5. Scalable Across All Lines of Business Whether we’re providing tax, audit, consulting, or wealth management services, accurate time data sheds light on the complete client picture.

Conclusion

Using AI to illuminate the true cost—and value—of your firm’s services is transformative. It not only enables fair and profitable billing, but also reveals where processes need improvement. As professional services continue grappling with commoditization and tight margins, the difference between thriving and merely surviving often boils down to knowing your real costs—and confidently getting paid for the real value you deliver. Laurel’s AI Time platform puts the power back in your hands.

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