Archive for the ‘Process’ Category

Thursday, February 1st, 2018

Incentive For New Business – Keep It Simple

“If you look at history, innovation doesn’t come just from giving people incentives; it comes from creating environments where their ideas can connect.” – Steven Johnson

Many firms, in recent years, have adopted an incentive plan for bringing new business to the firm. It is usually a percentage of fees billed to the new client for the first year of service. Some firms pay a percentage for the first two or three years of service.

The most common ones that I am aware of are 10% of first-year fees or 5% of fees for the first one, two and/or three years.

Some firms require that a certain amount of fees must be billed and even that certain realization levels are accomplished. They also pay the incentive on a delayed schedule – after services are rendered and fees are billed (and collected, in some cases).

Why not be more generous? How motivational is it to make the effort to bring in new business when the reward comes way down the road with lots of stipulations.

At my firm, we paid 10% of first-year fees at the time the initial engagement letter was signed, based on the amount quoted in the engagement letter. We did not pay for individual income tax clients unless they were quoted a fee over $2,000.

The incentive was intended for business clients. If we quoted a range of fees, like many firms do, such as $3,000 – $4,000, we paid the team member 10% of the higher amount. If first-year fees ended up being more than the amount quoted in the engagement letter, we paid the make-up amount after the year-end. This policy did not apply to partners. All that was required is that the team member made the introduction and involved a partner.

Whatever your firm offers, keep it simple and provide more timely gratification to the team member.

Just FYI, we did not pay-out this incentive very often. It didn’t seem to motivate staff and admin very much.

  • You've got to change incentives for good behavior as opposed to just disincentivizing bad behavior.
  • Gavin Newsom

Monday, January 15th, 2018

Doing The Work

“Happiness is not in the mere possession of money, it lies in the joy of achievement, in the thrill of creative effort.” – Franklin D. Roosevelt

Have you examined how work is actually prepared, processed and completed inside your firm lately? You better put it on your list!

Lots of firms have embraced the Lean Six Sigma process and not only improved their workflow and efficiency but have also ignited more passion for the work in their team members.

So many people in CPA firms do things because “that’s the way Joe (partner) wants it” or “Rebecca wants it done this way.”

Today’s workforce wants to be challenged and not simply repeat the same work, the same way, year after year after year.

Managers, and sometimes even partners, cling to work that they have done for years because it’s easy for them and it helps them accumulate billable hours. Identify a less experienced team member and delegate that work. It might not be easy for them but it will help them grow in their career and that’s what builds a top performing team.

Read this great article via HBR – Why People Really Quit Their Jobs.

  • Who you are tomorrow begins with what you do today.
  • Tim Fargo

Monday, November 27th, 2017

Year-End Tax Checklist

“Life is simple, but we insist on making it complicated.” – Confucius

Well-managed CPA firms have, for a long time, supplied their individual income tax clients with some sort of year-end tax checklist. It is meant to be a helpful tool to encourage the clients to consider significant (and some insignificant) events that might affect their tax return.

At my firm, we used to include the tax checklist with the tax organizer. Many clients, as you can imagine, never bothered to look at their organizer, so they also missed the tax checklist. Then, we stopped providing tax organizers. Our default setting was “No organizer” unless a client specifically requested one. A few did.

Things are so much better now. You can simply send an email to your clients with a link to the annual tax checklist. They can quickly scan through the questions and provide you with information that affects their return.

Last week I received an email from one of my clients that included the year end tax checklist link (just because I am on their mailing list). It was quick to read, easy to review and made me think about pertinent information. That’s exactly how you want your clients to feel about how you provide services – quick, easy and pertinent!

Make 2018 a year when you become a proactive advisor to your clients and get away from always being in reactionary mode.

  • The ability to simplify means to eliminate the unnecessary so that the necessary may speak.
  • Hans Hofmann

Thursday, November 16th, 2017

Are You Using Technology To Do Things The Old Way?

“The manager accepts the status quo; the leader challenges it.” – Warren Bennis

I imagine that many of you have seen this quote from Bill Gates:

“The first rule of any technology used in a business is that automation applied to an efficient operation will magnify the efficiency. The second is that automation applied to an inefficient operation will magnify the inefficiency.” 

I believe that in many cases, inside CPA firms, you have simply taken the way that paper flowed through your office and replicated it into some wonderful, advanced software program.

For example, I was visiting with a firm recently that had simply taken the steps that they used for moving paper tax returns through the office and inserted the same exact steps into a software program that is capable of doing so much more, without even exploring all of the possible options and efficiencies now available to them.

I find this same scenario playing out in firms over and over again, year after year!

We all become comfortable with status quo, the familiar, the known. Take your firm to the next level – move out of the comfort zone – don’t be afraid! Stop settling for status quo because it is easy. As we get closer to wrapping up another year, look back, contemplate 2017. Has it been another year of just settling for status quo?

  • Creativity involves breaking out of established patterns in order to look at things in a different way.
  • Edward de Bono

Tuesday, October 31st, 2017

Make A Commitment

“If you do build a great experience, customers tell each other about that. Word of mouth is very powerful.” – Jeff Bezos

As I mentioned in yesterday’s blog post, here is an example of a Mutual Commitment Statement that I often share. Simply customize it to fit your firm.

Our Mutual Commitment Statement

I, Sally Partner, and the entire team at (name of firm) want your experience with us to be the best it can be.  We offer the following commitments to you:

  • You will be respected and never taken for granted.
  • We will act with integrity, honesty and openness in everything we do for you and with you.
  • We will absolutely respect the confidentiality of our working relationship with you.
  • We will return phone calls and answer email within 24 hours.
  • We will meet the deadlines we set. In the case of circumstances beyond our control, we will notify you and discuss with you immediately.
  • Our services will rarely, if ever, be the least expensive. They will, though, always be of exceptional quality and designed to help you obtain significant value.
  • You have the right to know our fee structure in advance of any engagement.
  • You are the sole judge of our performance. If anything we do falls short of your expectations, we – without question – will respect your right to simply pay for whatever you feel the service was worth.

To facilitate our efforts in providing the highest level of service, we ask the following of you.

  • You will be open, frank and honest with us at all times. You will let us know immediately of any concerns you have about our work together.
  • You will give us all the information we need to complete our assignments.
  • You will meet mutually agreed upon deadlines. In the case of circumstances beyond your control, you will notify us immediately of the situation.
  • You will pay our fees per our engagement letter. If you cannot pay, you will call and talk to us immediately.
  • You will give consideration to referring us to at least one other business that might benefit from our services.


  • If you take care of your people, your people will take care of your customers and your business will take care of itself.
  • JW Marriott

Friday, October 27th, 2017


“Correction does much, but encouragement does more.” – Goethe

When those young, accounting majors graduate and enter a CPA firm, they sometimes procrastinate on taking the CPA exam.

Often, firms let them procrastinate. Don’t do it!

Studies show that a huge factor in young people passing the CPA exam is encouragement. Tell them boldly, “We are a CPA firm. We need CPAs. We will help you.”

Then be sure you back-up your words with action. Revamp your CPA exam policy (if you have one). Be generous with monetary support. The firm pays for study aids and courses, all fees associated with the exam. Provide generous work time for study time.

When they actually pass the exam, celebrate! When they received their official certificate, have it professionally framed for them. Sometimes, little things make the biggest difference.

  • Nine tenths of education is encouragement.
  • Anatole France

Thursday, October 12th, 2017

Tax Return Ranking – A Consistency Issue

“Discipline is the bridge between goals and accomplishment.” – Jim Rohn

If you work in a CPA firm, you probably know what I mean by the title of this post – tax return ranking. It means the level of difficulty of a particular tax return.

It is one of those procedural type issues that I probably don’t cover as much as I used to. Yet, these little things can play havoc with consistency and efficiency at your firm.

Here’s the story:

Partners are asked to assign a level of difficulty to tax returns before they are selected (or assigned) for preparation. Some firms use grades like A, B, C and some firms use a numeric ranking like 1-5, with 5 being the most difficult.

Staff and interns then select (or are assigned) returns that are appropriate to their experience level. Beginners and interns might be given the “simple” returns and more experienced tax preparers get the more complex returns.

The issue is that some partners might think a certain return is a Level 2 and another partner thinks it’s really a Level 1. They have not established guidelines as to what actually constitutes a #1 from a #3 return. It is just assumed that a #3 is more difficult than a #1. Take the guess work out of this process by better defining what each level means.

Susan Flynn, Office Manager at Gallagher, Flintoff & Klein in Lansing, Michigan has kindly agreed to share their ranking system. I though it might help other firms better define their own ranking systems.

Tax Return Rankings

0 – Business/Trusts

1 – Simple: W-2, Sch. A, No Sch. C, E or K-1s.

2 – Average: Includes a Sch. C, E or simple K-1s.

3 – Complex: One or more of the following: Sch. C, D, E, K-1s, B w/large brokerage statement, multi-state.

4 – High Touch: High-level preparer required.

Before January 1 rolls around, review your system and determine if it needs to be better defined.


  • For every disciplined effort there is a multiple reward.
  • Jim Rohn

Friday, September 8th, 2017

Who Is At Fault?

“Nothing is easier than fault finding.” – Og Mandino

Who did it?

Something happens that should not have happened. A mistake was made.

At some firms, there is a hunt for the culprit, so that blame can be placed.

Forget about the hunt. It doesn’t matter exactly who did it. You don’t always have to blame some one particular person.

Rather than wasting time figuring out who caused it, figure out how to fix it and prevent it in the future.

If it was YOU who mailed something to the wrong address, don’t worry about it – fess-up and move on to figuring out how to prevent it in the future.

Adopt this message in your workplace: “We don’t care whose fault it was. Mistakes happen and we learn from them. How do we fix it and prevent it in the future?”

Now, if the offense relates to who made the big mess in the lunch room and didn’t clean it up, that’s another story! Have a great weekend!

  • Don't find fault, find a remedy.
  • Henry Ford

Wednesday, September 6th, 2017

Workflow Software

“Only two things are infinite, the universe and human stupidity, and I’m not sure about the former.” – Albert Einstein

There are still many of you out there, working in CPA firms, without the advantage of workflow software.

Sad but true, I continually interact with CPA firms who are just “sort of” paperless. One of the tools that makes becoming truly a digital firm a reality is workflow software. From your desktop, you know who has what and how projects are flowing through your office.

Last week, Accounting Today featured an article: Software Survey: Workflow solutions in 2017.

Simply put, workflow for tax preparation means tracking all of the paths and operations involved in producing a return and invoice, and making certain all of the tasks are performed on time by concrete due dates.

Workflow software gives you peace of mind. It helps you be sure that no client falls through the cracks when it comes to due dates. Missing a due date is one of a CPA’s biggest worries!

I know, when my firm adopted GoFileRoom for document management many years ago, the most attractive feature was the workflow portion.

If you are one of those firms still without a workflow tool, be sure to read the article – it is full of great insights from various sources/vendors.

  • When you forgive, you in no way change the past - but you sure do change the future.
  • Bernard Meltzer

Tuesday, August 29th, 2017

CPA Green Belt Certification

“Productivity is never an accident. It is always the result of a commitment to excellence, intelligent planning, and focused effort.” – Paul J. Meyer

It’s that time of year again. Maybe someone at your firm is ready to tackle the task of becoming your firm’s in-house efficiency guru.

HostetlerDustinLeanCPA-1023Boomer Consulting‘s Dustin Hostetler (and Ohio State University) will be offering the CPA Green Belt Certification on October 31 – November 3, 2017 in Wooster, Ohio.

Hear Dustin explain it here.

Read more about it here on the OSU site.

I know there are many ways in which your CPA firm can be more efficient. Invest in having your own guru, in house.


  • Amateurs sit and wait for inspiration, the rest of us just get up and go to work.
  • Stephen King