Archive for the ‘Partner topics’ Category

Wednesday, September 15th, 2021

A Jerk Free Firm

“In my opinion, we don’t devote nearly enough scientific research to finding a cure for jerks.” – Bill Watterson

Recently, a comment from Allan Koltin caused me to give some thought to what a jerk-free firm might be. Koltin noted that if you had a jerk-free firm, the firm would be more likely to have appeal as a merger candidate.

I have observed that most CPA firms have at least one jerk at the leadership level. It could be a partner, a manager, a male, or a female but their jerkdom is well-known and dreaded. Sometimes they are even ridiculed among the team members. Usually, interns can identify the jerk within a week or so and can often do a great job of doing a comic imitation of that person.

Here is a link to where you can read about jerks in the workplace. But how do you define a jerk personality in an accounting firm?

Someone who:

  • Talks excessively but never listens.
  • Takes credit for other people’s ideas.
  • Is always last minute causing chaos close to due dates.
  • Doesn’t respect other people’s time.
  • Leaves a mess in the lunch room for admin to clean up.
  • Ignores the FIFO method for processing work and puts their jobs first.
  • Seems to have no understanding that you have a personal life.
  • Rarely express appreciation of gives recognition for a job well done.
  • Openly makes fun of other people (staff/clients) and gets involved in the grapevine.
  • Dodges client calls when they know there is a problem and delegates it to someone else.

I could go on but you can add to this list if you want.

I suggest you strive to develop a jerk-free culture by establishing some guidelines and goals. Be sure you have identified the firm’s core values and expect all partners to live by them and set a good example

Here is an example of some values that help make a jerk-free workplace;

  • Client focused – Always sriving to provide awesome client service
  • Focused on excellence pertainig to hiring, establishing processes and working environment.
  • Keeping our word – I always think of something Sam Allred said at a retreat many years ago as it applies to partners: “I will do what I say I will do, on time, without reminders.”
  • Team oriented – Everyone at all levels are expected to give and receive feedback to help themselves and the entire team to continually improve.
  • Self-sufficient – I will be a problem solver; not one who creates problems for others to solve.

Be able to say without hesitation, “We are a jerk-free firm!”

  • Of the billionaires I have known, money just brings out the basic traits in them. If they were jerks before they had money, they are simply jerks with a billion dollars.
  • Warren Buffett

Friday, September 10th, 2021

Flashback Friday – Essential Questions

“It is not the answer that enlightens, but the question. – Eugene Ionesco

Many of you are planning a Fall partner retreat. I know you will work diligently to establish a well-thought-out strategic plan.

When you are all finished, answer some important questions posed by David Maister.

Read this Flashback post from 2018.

  • Judge a man by his questions rather than his answers.
  • Voltaire

Tuesday, September 7th, 2021

Subscription Pricing

“You’re going to have to define the kind of customers you want, which is much easier if you’re niched.” – Ron Baker

Ron Baker has been talking about value pricing since 1994. You have read his books and heard him speak many times.

In a recent article, he makes the case for subscription pricing. We are keenly aware of subscription pricing. Many things from Netflix to shaving supplies can be bought via subscription.

Baker says, “It’s what I’m calling Value Pricing 2.0 – the subscription business model.”

Read Baker’s article via Thomson Reuters, titled: “Subscription pricing for tax and accounting services? I know this is a great idea because it scares the hell out of people.

Baker thoroughly explains the pricing model. He also covers how it is better for an accounting firm than traditional pricing models.

As with most things from Baker, I think you will find this very interesting.

  • It always amazes me that some firms have $100,000 clients and yet they have a bunch of $500 clients — that’s insane.
  • Ron Baker

Friday, September 3rd, 2021

Check-Ins – Flashback Friday

“If you aim at nothing, you will hit it every time.” –Zig Ziglar

Now that you don’t actually see many of your employees every day, it is more important than ever to have frequent check-ins to find how they are doing and how they are progressing on their goals.

Read more in this Friday flashback post.

I HOPE you will enjoy this 3-day holiday weekend although I know that probably isn’t the case for many of you with the September due date just around the corner.

  • Never quit. It is the easiest cop-out in the world. Set a goal and don’t quit until you attain it. When you do attain it, set another goal, and don’t quit until you reach it. Never quit.
  • Bear Bryant

Wednesday, September 1st, 2021

Build A Marketing Culture

“Doubt is a killer. You just have to know who you are and what you stand for.” -Jennifer Lopez

As baby boomers retire and many of them have already, the firm is usually faced with a shortage of rainmakers. Of course, their knowledge and experience with technical work are also missed.

Firms have spent many years and a lot of money developing technical experts. But, have they spent many years and lots of money developing rainmakers? The answer is no.

It is so important to instill the responsibility and expertise for bringing in new business in everyone working at the firm, especially the younger accountants. I have observed that firm leaders don’t begin early enough to develop future rainmakers. Here are some suggestions on how to build enthusiasm for marketing.

Marketing Education From Day One – As part of orientation, be sure your new hire spends some time with your marketing director (or firm administrator) to learn about firm marketing efforts. One marketing director gives the newbies a “tour” of the marketing closet, showing them the firm marketing collateral and giving them their business cards on the first day. Set a goal for them to distribute their business card to twenty people their first week at the firm. Assure them that they can give it to friends and even relatives, just for the practice. The marketing director has a lot to teach new hires.

Provide Opportunities to Practice – Organize a marketing skills lunch and learn for staff. At my firm, we even talked about the proper way to shake hands and had them practice with each other. Have them develop their elevator speech (how they quickly describe what they do and who they work for in an informative and brief way).

Establish Accountability – A simple, easy-to-use marketing activity report is an important tool for new staff. Sometimes, even managers need marketing education. The marketing activity report is submitted to the marketing director every month.

Leaders Setting The Example – Young people learn from observing others. Do all your partners frequently attend community and business events? Are your partners writing articles for the firm newsletter? Do you have some partners who blog, tweet, or do podcasts?

Always Have A Shadow – Partners and more experienced accountants should always offer to take a beginner along on a prospect meeting. When you have a lunch meeting with a current client, invite a beginner. You can flatter your important client by saying, “Today I have asked Ned Newbie to join us for lunch. He is new to the firm and just learning how CPAs work. I thought he could learn benefit from attending a lunch meeting with an important client like you.”

Building the enthusiasm for marketing doesn’t happen naturally for accountants. Don’t wait until a manager is being considered for partnership before they know that bringing in business is an expectation.

  • Your attitude, not your aptitude, will determine your altitude.
  • Zig Ziglar

Thursday, August 26th, 2021

“THE” Exam

“Students are struggling to afford that fifth year of school.” – Daniel Hood 

There are a lot of discussions recently about the difficulty of passing the CPA Exam and requiring five years of education (the 150-hour rule) to become a CPA. These are the reasons college accounting majors are giving for not going into public accounting.

Accounting Today editor-in-chief, Dan Hood puts this dilemma in question form to all of you out there. He asks, “Is it too hard to become a CPA?” He notes that CPA profession leaders/consultants say that the number of students in accounting dropped from 2% in 1990 to 1% in 2000. The 90s is when the 150-hour rule became prominent in many states. The Exam itself is widely known to be very grueling. What could be the answer?

Read the article and give him your personal feedback.

In my personal opinion (and please note, I am not a CPA but have worked with them for over 40 years), the extra year of education is a waste of money and effort. I have never been able to see how that extra year made incoming recruits any better prepared than those that came before them. The CPA Exam should be on the “grueling” side. Clients rely on CPAs for their amazing expertise and advice. If they want to remain “the most trusted advisor” they not only have to prove their current knowledge, they have to commit to LIFE LONG learning to add to that knowledge.

  • The CPA profession is facing serious staffing challenges and long-term threats around its ability to attract future professionals.
  • Daniel Hood

Thursday, August 19th, 2021

You Are Already A Consultant

“Every great move forward in your life begins with a leap of faith, a step into the unknown.” – Brian Tracy

All the talk these days is about CPAs becoming consultants to their clients and not just compliance service providers.

There are even various training programs to help CPAs make the large leap (I say that sarcastically!).

It is not a “leap” for you. You are already performing consulting services and have done it for years. Partners and managers in public accounting firms have been advising, coaching, and consulting with clients as part of their normal activities.

I see the problem being how you code your time. You record time to Tax when it is actually consulting. Why do CPAs do this when most firms already have service codes specifically for Consulting.

There are two reasons. One, they just code it to tax out of habit, and without thinking that they are really not doing tax work, they are performing “Advisory Services.” Some firms have codes titled, MAS – Management Accounting Services that many partners rarely use. Two, they do not use the MAS codes because they have a higher billing rate associated with those codes and they do not want to charge their clients more for that type of work.

The challenge facing CPA firm leaders is teaching younger accountants and involving them in consulting/advisory services earlier in their careers.

  • It always feels too soon to leap. But you have to. Because that's the moment between you and remarkable.
  • Seth Godin

Tuesday, August 17th, 2021

SALY

“Tomorrow is the first blank page of a 365-page book. Write a good one.” – Brady Paisley

This term has been used by CPA firms for decades. SALY – Same As Last Year.

Do you remember when a new team member was assigned a routine individual tax return and the partner or manager would send the client’s file with a note simply stating SALY? Everyone knew what that meant. You just had to follow what notes were in the file and draft this year’s return similarly to last year’s return. Simple.

SALY became a way to train new recruits and I’m sure it was very boring for those newbies.

The point of this is that you can no longer sidestep your responsibility for training by simply indicating SALY. The workforce has evolved and young people are more curious and demanding.

Besides that, you are still working through a pandemic. It seems it just won’t go away. You are also constantly dealing with new technology. Going forward nothing will ever be the “same as last year” again.

  • We are not the same persons this year as last; nor are those we love. It is a happy chance if we, changing, continue to love a changed person.
  • W. Somerset Maugham

Thursday, August 12th, 2021

The Overwhelmed Managing Partner

“The best executive is the one who has sense enough to pick good men to do what he wants done, and self-restraint to keep from meddling with them while they do it.” – Theodore Roosevelt

Not too long ago, I heard a managing partner in a mid-size firm lament that he was overwhelmed with what he had to do as a managing partner. His firm wasn’t big enough for an HR department or a full-time Controller, so much of the administrative management work fell on his shoulders.

This brought to mind the fact that even very small firms need a true firm administrator. I know firms that have under ten people and have a firm administrator in place. One very successful firm (a former client) had one administrative person and her title was Firm Administrator. She did it all! This sole proprietor was freed up to do what he loved to do and what made the firm successful – he consulted with clients in a special niche (what a concept!).

Even in small firms, a firm administrator can take on much of the work surrounding recruiting and hiring. They can handle the renewal of various insurance policies including professional liability. In many small to mid-size firms (headcount 50 or under), the firm administrator (practice manager is now the preferred title), is also the marketing person, the HR person, and the billing person. I refer to these multi-talented practice managers as “working” practice managers because they also process tax returns and financial statements. Obviously, these tasks are mostly handled by an administrative assistant but during peak times the practice manager must pitch in.

Does it make financial sense? Yes. If a professional practice manager can save an MP even 20 hours per month and he/she uses those twenty hours to consult with clients, that would amount to almost $70,000 per year (if your equity partner billing rate is $290 as noted in the Rosenberg Survey). I believe a practice manager can save you a lot more than 20 hours per month.

So, if you are a managing partner that is feeling overwhelmed with admin work, hire a talented, professional practice manager. The CPA Firm Management Association can be a great resource for learning more about hiring a practice manager and managing a CPA firm.

  • Surround yourself with the best people you can find, delegate authority, and don’t interfere as long as the policy you’ve decided upon is being carried out.
  • Ronald Reagan

Wednesday, August 11th, 2021

Starting Salaries

“When it comes to landing a good job, many people focus on the role. Although finding the right title, position, and salary is important, there’s another consideration that matters just as much: culture.” – Adam Grant

In my local newspaper today, I read a brief article that should make you think about raising starting salaries and not forgetting about the other perks.

An excerpt:

“Hardly a day goes by without a big bank announcing a significant rise in starting salaries for its youngest employees. JPMorgan Chase Citigroup, UBS, and Morgan Stanley are now paying first-year bankers $100,000, while Evercore, Jefferies, and Goldman Sachs will pay $110,000. In most cases, first-year salaries were $85,000-$95,000.”

I have observed that many accounting firms have not significantly increased their starting salaries over the last ten years! Of course, it depends on the size of your firm and on your location. But, boundaryless recruiting is changing all of that. Big firms are “raiding” the midwest and offering big city salaries without the person living in a big city.

What are you going to do about starting salaries? The old dilemma then arises. You have three-year staff making less than beginning staff. Other perks are also very important.

Here’s a link to the NYT article. Your partner group needs to discuss and identify how to address this challenge.

  • If you want to be a generous giver, you have to watch out for selfish takers.
  • Adam Grant