Practical ideas, lessons learned and shared experiences for those in the world of CPA firm management, human resources, administration, marketing and technology.
Last week I received my copy of the Crosley + Company newsletter. If you are not on Crosley’s mailing list, I hope you sign-up.
The article talks about how much time and energy is wasted by CPAs seeking “unqualified leads.” Without discipline around lead qualification, firms jump into an unstructured process based more on wishing than on solid facts. I always stress with clients to use Crosley’s pipeline process because too many CPAs simply have what I call “Wish Lists.” Many CPAs have potential clients on these “wish lists” for years and years and generally nothing ever really happens.
What’s involved in qualifying a lead? You must ask questions and dig, dig, dig like Columbo, the TV detective uniquely played by Peter Falk, did. Here’s advice from Crosley:
Interview your buyer early in the process, iterview multiple decision-makers if necessary, and don’t hesitate to ask the tough questions. Leads need to be qualified early and hard. Listen to the answers very, very carefully. Once you’ve asked the question, based upon the answer, then dig, dig, dig further. Think Colombo, the popular TV detective. The qualification questions are:
I meet and get to know some pretty great people associated with the CPA profession. That’s the case with Dustin Hostetler. I met and talked with Dustin at several CPA management conferences over the last few years, we’ve met for lunch (he lives in Ohio, too) and keep in touch digitally.
Hostetler is the founder of Flowtivity and the practice leader and lead consultant for LeanCPA. As a Lean Six Sigma Master Black Belt with extensive experience working inside a large regional CPA firm, he has taken proven Lean techniques from the manufacturing floor and tailored them to bring ground-breaking value to public accounting firms. His innovation and passion has brought true efficiency to accounting — helping accounting firms unleash the potential of their professionals.
I’m sharing all this with you because of an article Hostetler wrote in his recent newsletter. How far does a plane go without pilots and how does that relate to CPA firms? He’s right on target with this engaging story.
I recently read a blog post by Dustin Hostetler of Flowtivitytitled, How Often Do You Slow Down To Just Enjoy The Journey? Loved it and wanted to share it with all of you.
Here’s an excerpt:
Every once in a while slow down to think. Have your client service teams do the same. Enjoy the journey – you shouldn’t just be putting in hours. That leads to burn out, which is not productive. Those hours should mean something, they should equate to value. It’s up to each person individually to find their right place in the professional environment - the balance between a great career, a great family and service back to your community. Help others to find that place as well – your firm should be receptive to it. The more you find yourself in that right place when you’re at the office, watch how much more productive you can be.
I keep thinking of the Mazda commercial that stressed, “Enjoy the Ride.” Growing your CPA firm can be as exciting and fun as riding a roller coaster. Just remember, through all the ups and downs to enjoy the ride.
Today I’m not talking about your well-thought-out succession plan – - for the firm, for all the owners and all that jazz. Today I am talking about your immediate succession plan in case you need to replace your managing partner.
I was contemplating this because of a line in Steve Jobs’ letter of resignation. Did you read it? If not, here it is:
To the Apple Board of Directors and the Apple Community:
I have always said if there ever came a day when I could no longer meet my duties and expectations as Apple’s CEO, I would be the first to let you know. Unfortunately, that day has come.
I hereby resign as CEO of Apple. I would like to serve, if the Board sees fit, as Chairman of the Board, director and Apple employee.
As far as my successor goes, I strongly recommend that we execute our succession plan and name Tim Cook as CEO of Apple.
I believe Apple’s brightest and most innovative days are ahead of it. And I look forward to watching and contributing to its success in a new role.
I have made some of the best friends of my life at Apple, and I thank you all for the many years of being able to work alongside you.
Steve
I want you to focus on the 3rd paragraph….”I strongly recommend that we execute our succession plan…”
Do you have enough of a succession plan that would clearly and quickly name the next CEO of your firm if your MP (you) became unable to serve?
Stats and studies tell us that most CPA firms do not have a formal succession plan. Sure, I want you to work on that one. But more importantly, I urge you to have a short, concise CEO succession plan in case of emergency.
If you are the MP/CEO, much of the detail of what you do everyday is a mystery to your partners. Perhaps you are in very preliminary discussions with a merger candidate. Perhaps you are deeply involved in helping a client sell their business. Perhaps you are one of those partners I hear managers talk about all the time…. “Joe keeps so much in his head and never documents his client conversations. I sometimes call the client and feel like an idiot because Joe has already covered the topic with them.”
It’s easy these days to keep notes. If you are the MP/CEO simply create a digital folder and quickly make notes everyday regarding the status of current projects and activities. Or, use the “notes” section of various software tools.
You could call the folder the ICIGHBAB folder (in case I get hit by a bus).
Okay, I’ll get real – you probably won’t keep notes daily on what you are doing. However, please do go through a process with your partners to designate who will immediately step-in as MP/CEO if you do get hit by a bus or something similar.
Be a yardstick of quality. Some people aren't used to an environment where excellence is expected.
Have you met Dustin Hostetler, the Principal at Flowtivity and Lean Six Sigma Master Black Belt? He’s been visible at many CPA management conferences the last few years and was formerly with Lean CPA.
Hostetler is a pioneer in helping CPA firms apply Lean concepts to their unique functions such as tax return and payroll preparation, pension administration, bookkeeping and auditing.
I had the pleasure of having lunch with Hostetler a couple of weeks ago and learned first-hand about his new company, Flowtivity, and about a great new opportunity for CPA firms to have their own in-house, certified Green Belt.
Hostetler is partnering with Ohio State University’s Business Training & Educational Services to offer a Green Belt Certification Course that is CPA-focused. The number of participants is limited because after the training is over, participants will receive remote coaching from Hostetler with their own process improvement project. The course will be November 1-4, 2011 in Columbus, Ohio. Learn more here.
Check out the Flowtivity website to learn more about productivity inside CPA firms. For an overview, watch the short video below. It’s all about getting more done with the resources you have.
The way a team plays as a whole determines its success. You may have the greatest bunch of individual stars in the world, but if they don't play together, the club won't be worth a dime.
Be patient with me this morning, I’m going to reflect back on the old days like so many old people do…..
I grew up in public accounting under the stewardship of a highly-professional, disciplined, intelligent, dictator-style managing partner, Luke Ware. Luke “grew-up” in a Big 8 firm and I am just assuming that many of this actions/procedures were developed there. The firm was small then. It ranged from 11 to about 22 people while I was at the firm under his reign.
Client service was the focus, yet the clients were trained. They were trained to be ready when our CPAs arrived for an audit or review. All of the business owners were 1040 clients. They knew when their appointment was each year (yes, they came into the office to meet with the partner/manager) and they brought their organizer and all their documents with them (well, most of their documents).
Notice I said “trained.” We trained our clients via communicating their responsibilities as part of our relationship.
It is the manager’s duty (or the partner) to be sure the client is ready for the auditors when they arrive on the appointed day. It is their duty to be sure the client understands their commitments to the beneficial relationship.
In our firm, we sent an appointment card with the organizer (the kind they could stick on their refrigerator). These days you can send an appointment invitation via email. We called each 1040 client the day before the 1040 appointment to remind them of the appointment (much like your dentist or eye doctor does now). If they didn’t have “all their stuff,” we told them to come anyway and bring what they did have so we could get started on the return.
As our firm grew, we got away from some of this because of the “time” involved in meeting with the client and the convenience of just having them drop-off or send-in their information. We often use “client service” to hide the fact that we really want less time in the job. Meeting with a client, even just a 1040, face-to-face once a year often opened the door to additional services – that was part of the plan.
What’s your plan? Do you permit clients to sabatogue your schedule?
I have always believed that clients are impressed by a CPA firm that appears very professional, has defined procedures, communicates effectively and is an example of how you run a highly-successful business.
I hated every minute of training, but I said, 'Don't quit. Suffer now and live the rest of your life as a champion.'
During these times of enhanced M&A activity in the CPA profession, firm leaders ask a lot of questions about the value of their firm. There is certainly not one answer to this question and not the point to this blog post.
What I want to stress today is the fact that IF you want your firm to be acquired “someday” you better get busy “today.” The acquiring firms want firms that have sound leadership and are well-managed.
Easy for me to type these. Easy for all of us to say these. Not as easy to implement and be successful at all of these. There is a lot behind each one.
I encourage you to take each one and have a meaningful conversation among your partner group. How are you doing? What can you do better? How can you actually make progress?
If you need assistance, let me know.
Strive not to be a success, but rather to be of value.
CPA Technology Advisor offers a Productivity Survey to assist you in determining where your firm stands in relation to productivity, performance and profitability.
Here are a couple of interesting stats they have discovered:
Regarding scanning of tax support documents: Only 12% claim to scan all supporting documents before preparation begins, and nearly 40% indicate they “don’t scan supporting documents.”
Regarding the creation of a client return image for electronic storage: Over 80% of the firms report doing so, but interestingly enough, that percentage falls to less than 70% among the largest firms.
A busy time with intense focus on your clients is behind you. Sure, you should always have an intense focus on your clients but you know what I mean…. a couple of those famous 15th deadlines have passed.
It’s fall. Time for change. If you are lucky, you live in one of those parts of the world where Nature has one last fling before settling down into winter. For deciduous trees, summer green turns to fall red, orange, gold, and brown.
There are a multitude of factors that lead to the change and the brilliance of the color (the change). A succession of warm, sunny days and cool, crisp but not freezing nights seems to bring about spectacular color displays. Moisture also plays a part. A wet or dry, early or late spring affects autumn colors as does a summer drought.
It’s fall and time for change inside your firm. What factors set the stage for change in your firm? Have you influenced the ideal conditions for change (enough light, moisture, no droughts)?
You have several valuable weeks to identify and act upon changes that will make your firm glow with vibrant color once 2011 rolls around. Re-read this post from July, you still have time to make changes. It takes persistence.
I took the picture last week (with my iPhone) of Aspen trees high in the Utah mountains. What a glorious change!
Autumn is a second spring when every leaf is a flower.
A post by Seth Godin, got me to thinking. He talks about Jackson Browne’s advice on exploring rather than rehearsing. Exploring helps you figure out what you can do and rehearsing means you know exactly what you will do so you can protect against the unpredictable. An explorer seeks the hitches because they are the chasms that help us leap forward.
Think about your firm processes. You know that I am a huge proponent of documented processes to help efficiency and profitability. But do your processes allow people room to THINK, explore and learn from their mistakes?
You certainly don’t want mass confusion and mixed messages from firm leaders, but you don’t want to be so structured that new ways are not explored.
One of my good friends is an audit partner. He often faces the challenge with experienced audit managers who want everyone to use the exact same wording in every footnote that you could ever imagine. Thus, the words are exactly what the audit manager would write. Just check a box and get the footnote. This particular audit partner encouraged his mentees to ponder, think, consider before writing – - explore. Maybe we need more exploring in CPA firms.
Note: On a recent vacation, I explored Arches National Park.
I am prepared to go anywhere, provided it be forward.
Last week I received my copy of the Crosley + Company newsletter. If you are not on Crosley’s mailing list, I hope you sign-up.
