Source: Inside Public Accounting

Not many CPA firms reveal their financial performance to staff. However, those that do find staff take more ownership of jobs and are more inspired to work toward partnership.

Whitlock, Selim & Keehn (25 people), in Springfield, Missouri, provides the entire financial statement (including compensation by group, but not by specific individual). The firm says staff take greater ownership of jobs, making decisions that reveal greater understanding of the firm’s business. If everyone in the firm knows where it is and where it wants to go, they work harder to make it happen.

WSK lets staff design the bonus plan (to then be approved by partners). The current plan is based on revenue. Sixty percent ($60,000) of the pool is distributed among administrative staff, professional staff, and managers, with equal distribution within each group. The remaining 40 percent is distributed based on individual performance. Decisions on amounts are made by the group above, e.g., managers decide on bonus amounts for professional staff.

Johnson Jacobson & Wilcox (27 people) in Las Vegas, gives staff the same information it gives to partners, except individual salaries. Staff is usually surprised that average partner compensation is as high as it is. This is a great motivator. Another plus is that entrepreneurs among the staff are easy to identify, as they come into the managing partner’s office to discuss earnings or how various events affect earnings.

The bonus pool at JJW is 6.5 percent of income before partner salaries. This amount is shown as a separate accrual item on the monthly financial statements, so staff are aware of the amount. Distribution, expected to be $125,000 this year, is in December and averages more than $6,500 per person. Criteria for awards (determined by partners) include training, training others, community activities, improvement in technical proficiency, relationship skills, and production.

From Inside Public Accounting, November 2006, p. 6. Hudson Sawyer Professional Services Marketing Inc. www.hudsonsawyer.com. Subscription $369 per year; back issues—nonsubscribers $40. 404-264-9977. orders@hudsonsawyer.com.