Friday, February 28th, 2020

Set Clear Expectations For Your Clients

“If you expect nothing from somebody you are never disappointed.” – Sylvia Plath, The Bell Jar

I admire firms that are proactive with their clients. So many CPAs just wait on the client to call if there is an issue they need help with. Surveys have told us over and over again that clients want their CPA to be more proactive.

Be more proactive when it comes to obtaining the client’s tax information. For most firms, it is an annual, painful drama. Here’s a message one firm has sent out (in late February) to their clients. It went out in an email. It is a simple thing to do and guess what? It might help!

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Have We Received Your Personal Tax Information?

April 15th will be here before you know it! Have you turned in your personal tax information? Remember, in order to ensure a timely filing of your tax return (to avoid an extension), we must have your information by March 11, 2020. All tax organizers were sent to clients in December of 2019. If you need another copy, please let us know. Please be sure to bring us your information so we are able to get started. If you are waiting for a few items, not a problem! Bring us what you have, we will get started, and then bring in the additional information as it arrives.
 
If you have any questions regarding your personal tax return, please contact our office. Thank you for your help.

  • "Treat a man as he is and he will remain as he is. Treat a man as he can and should be and he will become as he can and should be."
  • Stephen R. Covey

Thursday, February 27th, 2020

Don’t Be Afraid of Feedback

“Nobody’s perfect. We all have blind spots and perspective gaps. We need negative feedback if we’re going to grow.” – Justin Bariso

Are you afraid of feedback? I hear stories from many CPA firms about the lack of support for upward feedback surveys and client feedback surveys. Once a firm leader told me that her partners were afraid of upward feedback – afraid it would be negative and hurtful. Another leader stated, “Our partners don’t want to do an upward feedback survey. They said they don’t care what our people think.” Oh, my.

Elon Musk recently made the following statement (tweeted) relating to his solar tile product. “Please let us know what improvements we can make to any aspect of Tesla SolarGlass roof! Critical feedback is much appreciated.”

The key statement here is the last sentence: Critical feedback is much appreciated.

Are you, as a firm leader, appreciative of critical feedback?

Tell us what we can do better. – – That should be the statement you are continually making to your clients and to your people. Then, listen and take action.

Read this informative article by Justin Bariso (via Inc.).

  • "When the feedback comes, don't view it as an attack. Rather, see it as a gift--a chance to learn."
  • Justin Bariso

Wednesday, February 26th, 2020

I Call It the Bad Apple

“To keep poor performers in place is to risk the future of the firm.” – Ron Baker

Recently, I read a great article by Ron Baker (you all know Ron Baker!).

His title for the article is Negative human capital and how it affects your firm. I simply call it The Bad Apple and have blogged about it several times. That being said, you MUST read Baker’s article.

Here’s an excerpt:

We do people no favors when we let them languish in a job they are not capable of performing well, or for which they have no heart. The philosophy, “hire slow and fire quick,” is sound advice. How do you know when it is time to let someone go? Ask yourself if you would hire this person again. Think how you would feel if this person came to you and said he or she was leaving to pursue another opportunity.

It is simply unacceptable to other team members to keep people in the firm who are not meeting expectations. The negative morale effects are significant, and will ripple throughout the company. Poor performers are not good role models, do not make good mentors, and may even be damaging customer relations. If the leaders don’t make these tough decisions regarding the most important form of intellectual capital in their firms, who will?

In my consulting work, I have observed that partners make excuses upon excuses for why they can’t let some go even when the entire staff would breathe a sigh of relief. Even when the person has caused repeated turnover because people cannot put up with their bullying.

It only takes 7 minutes to read the entire article.

  • "We do people no favors when we let them languish in a job they are not capable of performing well, or for which they have no heart. "
  • Ron Baker

Tuesday, February 25th, 2020

Pay Attention to Collections

“Debt is normal. Be weird.” – Dave Ramsey

During my consulting and advisory work with firms, the collection policy topic comes up on a regular basis. I have posted about this before but I think it might be time to revisit this topic.

Collections are one of those things inside a CPA firm that is fairly simple but that seems to become complicated when you are dealing with multiple partners. My message to CPAs: You are running a business and effective collections is a basic business activity.

Here are my thoughts on CPA firm collections.

A documented, widely published Collection Policy is the foundation for good cash flow.

  • It must come from the top – all owners.
  • They need to meet, discuss all of the options and arguments then come to agreement on what they can truly live with, for the good of the firm.
  • Management drafts the document and all owners review and approve.
  • The written policy is communicated to all team members and is posted on the firm’s Intranet.
  • Everyone involved – managers, staff, controller, administrative assistants, firm administrator thoroughly understands and monitors compliance with the policy
  • AR statements should be mailed monthly to ALL unpaid accounts, with no exceptions.
  • Your collection administrator should routinely write notes/requests on the AR statements when a client is slow to pay.
  • A service fee should be applied for balances over 30 days.
  • I recommend that collection activities should be performed by a part-time administrative person (collection administrator) who is skilled in client communication and has no other priorities. This person’s role is also defined in writing and they operate within certain parameters.
  • They begin calling (not emailing) at 31 days. Some say 45 days but it is better to do it sooner. Often the client has just misplaced your invoice.
  • When the collection administrator exhausts all avenues with a particular, difficult client or when it ages beyond 90 days, it goes back to the partner in charge of the client account for collection, along with Managing Partner involvement. Work stops at the 90-day point.

Also, consider having your firm administrator send a welcome letter to every new client that includes a copy of your collection policy.

The bottom line – all partners must agree to follow the published procedures, if they cannot, they must keep working on the policy until they CAN all agree.

  • "If you think nobody cares if you're alive, try missing a couple of car payments."
  • Earl Wilson

Monday, February 24th, 2020

The Real Problem

From my experience, CPAs ignore the real problem. This came to mind when I read the following quote by Stephen R Covey:

“All the well-meaning advice in the world won’t amount to a hill of beans if we’re not even addressing the real problem.”

It also often comes to mind as I advise my valued clients. They hire me to get them on track, investigate and uncover troubling issues within the firm, make recommendations on how they can become future-ready, etc.

Very often, I give them advice that they don’t really want to hear. It is advice about once and for all addressing the real problem within their firm.

Many of them tell me that there is always “an elephant in the room” when they have their firm retreat and no one addresses it. Others are aware of a very troublesome employee or even a partner that no one wants to deal with. They are unwilling to outplace disruptive people. In other cases, their young people are sending them strong messages about a software, a procedure or a process that needs to be changed but the older partners simply will not listen.

To me, building a team of engaged, enlightened, energetic and passionate people who are willing to work as a team for the good of the firm is a foundational piece of the puzzle. This year, why don’t you finally address THE REAL PROBLEM.

  • "Happiness is not the absence of problems, but the ability to deal with them."
  • Charles DeMontesquieu

Friday, February 21st, 2020

Your Future Will Be Limited

I follow John C. Maxwell on Twitter. Yesterday, he posted the following tweet:

If you’re not identifying the leaders of tomorrow whom you will train up, your potential and your future will always be limited. 

It a simple, short message that speaks volumes to CPAs working in public accounting.  Owners of firms should have heeded this advice many years ago.

Here’s another recent tweet from Maxwell that hits home with CPAs:

No matter what it costs you, the return you receive will eclipse the price. Developing leaders is the most impacting and rewarding thing you can do as a leader.

Baby Boomer CPAs, nearing retirement, have been warned over and over again but few have acted upon the advice and now, their futures are limited. For some, it is merge-up or close-up.

  • "Don't let what's uncertain be what defeats you. Instead, let it be what motivates you to keep reaching toward what's possible."
  • John C. Maxwell

Thursday, February 20th, 2020

Lack of Self-Confidence

“Great salespeople are relationship builders who provide value and help their customers win.” – Jeffrey Gitomer

I bet you have heard the classic line: “I didn’t major in accounting so that I could become a salesperson.”

If you are working in public accounting, you must embrace marketing and sales. It is the lifeblood of a growing and successful firm.

Many accountants actually have a fear of attempting to “sell” services to a potential client. I always claim that you can land new clients if you simply like people. It is about connecting to others and building relationships.

Begin by building your own self-confidence. You have SO MUCH valuable knowledge – you are worth every penny a client pays you. You have helped so many clients in the past. Take that air of success with you as you approach potential clients. Tell success stories.

Jeffrey Gitomer (famous sales guru) recommends that you keep the story of “The Little Engine That Could” in mind – “I think I can. I think I can.” He says that thinking you can is 50% of the outcome. Never show doubt or uncertainty – you are a winner and can be such an asset to that potential client’s future success.

  • "Attitude drives actions. Actions drives results. Results drive lifestyles."
  • Jim Rohn

Wednesday, February 19th, 2020

Thoughts on Committees

“A committee is a thing which takes a week to do what one good man can do in an hour.” – Elbert Hubbard

“To get something done a committee should consist of no more than three people, two of whom are absent.” – Robert Copeland

If you are working in the CPA profession, I am sure you have been involved in committees. There are various firm committees and you also donate your time and talent to civic and charitable committees and boards.

This is just my opinion, so be forewarned. I don’t like to see TOO MANY committees inside a CPA firm and I do not like to see partners/owners on many, if any, committees.

Having a Tax Committee and an A&A Committee makes sense to me. It is a long-standing activity and I see the value. A partner is the chair of the committee – he or she is responsible for the well-being of the firm in these areas. They involve staff at all levels. It is a good way to give younger team members experience and a voice.

As firms grow, there will come a time when they need an executive committee and a partner compensation committee. Both of these are for larger firms where it is unproductive to have all partners involved in these issues. The membership of these committees rotate and are chaired by the managing partner.

Various committees to focus on the management of the firm are unnecessary. The managing partner and the firm administrator (COO, Practice Manager, etc.) are charged with efficient and effective firm management. You do not need other partners involved. Yes, informed, but not involved. This management team reports to the Board of Directors (the partner group, as a whole).

I have observed that some firms have an HR committee, a technology committee, a marketing committee and so on. They have partners serving on all these committees and it usually becomes a huge waste of time. Let the people charged with firm management, manage. The leaders of HR, technology and marketing report to the management team. Client service partners should be maintaining client relationships, bringing in business and mentoring younger, less experienced staff.

Do you ever become restless in a long-winded committee meeting because it goes on and on and no decisions actually get made? Don’t let this happen inside your firm.

 

  • "If you want to kill any idea in the world, get a committee working on it."
  • Charles F. Kettering

Tuesday, February 18th, 2020

Teaching Staff the Secrets of Marketing & Sales

“I recently went to a new doctor and noticed he was located in something called a Professional Building. I felt better right away.” – George Carlin

Are you teaching your young accountants how to become successful as rainmakers? If they want to be on the ownership track, they need to be able to bring in new business to the firm. That’s an overwhelming assignment for new hires.

The journey begins in their first week by having new recruits meet with your marketing director as part of orientation. The MD will simply explain how it all works and share all the tools the firm has available to help them succeed.

No expectations are set (that happens later down the road) except that the beginner CPA needs to be visible and attend business, civic and charitable events along with a more experienced CPA.

A helpful exercise is to host a lunch and learn where two or three of the firm’s best business developer partners participate in a panel discussion about how they became successful at attracting new clients to the firm. Each partner will have a slightly different success story and the entire staff is invited to the lunch and learn to listen and ask questions.

Never let marketing/sales be a surprise to your team members. Make it part of your culture and provide the tools necessary to help them succeed.

  • "Nine tenths of education is encouragement."
  • Anatole France

Monday, February 17th, 2020

Frustration

“If change is happening on the outside faster than on the inside, the end is in sight.” – Jack Welch

We all like to tell our recruits and potential new-hires that “our firm is different”  – – I find that in the hundreds of firms that I have interacted with, nearly all of them have many of the same issues and frustrations.

Are you often frustrated? – “The firm” isn’t changing fast enough. New initiatives often get delayed. Leaders are not setting a good example. People leave messes in the kitchen!

All this reminds me of a story. Stories and quotations inspire me and hopefully, they do the same for you. When I was actively working inside an accounting firm, a friend of mine gave me some good advice. When something really frustrates you just substitute the word fascinated for frustrated.  When you go to get coffee, the pot has about 1/25th of an inch of coffee in it….. isn’t that fascinating?

I could elaborate more fully on the fascination of surviving in a CPA firm. But, the purpose of this blog is to communicate what you can do to make things run smoother, better, faster and more efficient.

I hope you also follow me on twitter:  @cpamanagement.

  • "Laughter and tears are both responses to frustration and exhaustion. I myself prefer to laugh, since there is less cleaning up to do afterward."
  • Kurt Vonnegut