The following practical action steps for CPA partners with leadership roles were recommended by Steve Ericson (505-331-9100) at the Association for Accounting Administration national conference in Indianapolis:

• Resolve relationship issues among partners and employees. Do this by conducting a survey to discover obstacles to harmony. Accountability is dependent on this. Real planning can’t begin without unity and accountability.
• Then prepare plans—a profit plan, budgets, and a compensation plan. Plans should not rely on last year’s results plus a percentage. They must deal specifically with factors that produce results.
• Develop a service plan for each client engagement. Again, specifics are important. The plan should be based on understanding what the client wants. A recommended book is Strategic Management of Professional Service Firms, by Bente Lowendahl (3rd edition, Copenhagen Business School Press 2005). This book recommends high leverage in client service teams.
• Develop an effective scheduling system, modified weekly, to properly allocate firm resources.
• Make sure clients are prepared for the engagement. Engagement letters should specify clients’ roles in engagements and include time deadlines.
• Fire clients:
  • Whom you don’t like.
  • In industries you don’t like.
  • Who don’t pay.
• Move away from realization as performance indicator. Focus on revenue vis-à-vis costs.
• Develop standardized systems and procedures, and incorporate current technology solutions.
• Delegate. Partners frequently admit that half their work could be performed by less experienced people—people who can be taught specialized skills and don’t have to be CPAs. This implies a need for fewer people to manage relationships and more to do the work.
• The firm’s highest priorities should be retention and recruiting.

From Partner’s Report—the Monthly Update for CPA Firm Owners, September 2006, p. 1. For subscription information contact Institute of Management & Administration, Inc., 3 Park Avenue, 30th Floor, New York, NY 10016-5902. One-year subscription $349. 212-244-0360, [email protected].