Why CPA Firms Disdain Managing, and Why They Shouldn’t

Source: CPA Practice Management Forum

CPAs want to serve clients. That’s why they became accountants. Trying to run a business detracts from that. It also detracts from cultivating the source of their security—client service. Furthermore, it is difficult to evaluate the effects of management, so firms don’t reward for that. Then why should CPAs be interested in managing? Here are some reasons:

• CPA firms are increasingly impacted by outside forces: staff shortages, rapid technological change, regulations, commoditization of services, fee pressure, and changing needs of clients. Neglect of these management issues will reduce rather than cultivate client service.
• The impending retirement of baby boomers requires development of new leaders in the firm.

Management by committee is not effective. It is easy to see why. Trying to achieve consensus is time-consuming and can result in wrong decisions. The committee can set the strategic vision, and the managing partner uses committee members as a sounding board. The managing partner guides the firm, and other partners lead niches and take responsibility for risk management and quality control.

Firm leaders must attend conferences and read current literature to keep up-to-date on current management practices. To be successful, firms must:

• Have the right management structure.
• Place a high value on vision, planning, and firm culture.
• Analyze performance indicators.
• Create the conditions for staff to realize their career objectives.
• Develop new services.
• Foster accountability by tying compensation to achievement.
• Implement succession plans.
• Adopt partner agreements that address employment, admission, and retirement.
• Manage risk.

Partners are amenable to becoming involved in managing. They just need to be given the opportunity.

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From CPA Practice Management Forum, CCH Incorporated, 800-449-8114, February 2009, p. 5, “Why Successful CPA Firms Value Management.”