Don't Make These Practice Management Mistakes

Source: RedZone Play of the Month

The following includes excerpts, reproduced with permission, from an article by Accountants Advisory Group.

Here are common errors made by CPA firms:

• 10+ partner firms with no women partners and larger firms in which less than 15 percent of partners are women.
• No succession planning/transitioning and formal grooming of the next managing partner in large firms where the current managing partner is close to retirement age.
• Managing the firm by committee in smaller firms rather than electing a managing partner to lead the firm to the next level of success.
• Not updating engagement letters on fixed-fee jobs to be certain they clearly state which services are included and excluded, and then not immediately informing and invoicing clients for out-of-scope work when it's incurred.
• Having more permanent non-equity partners than equity partners and thinking that this is healthy for the firm in the long term.
• Not using M&A as a growth and niche development strategy.
• Determining fees for new engagement proposals based upon historical billable hours of previous jobs that were run inefficiently.
• Procrastination in making tough decisions relating to the strategic direction of the firm.
• Continuously hiring experienced staff from other firms rather than developing and promoting staff from within.
• Having a new business bonus policy for staff that's not producing new business while not providing practice development training and coaching to staff.
• Paying staff annual bonuses that aren't tied to achievement of performance goals and higher levels of technical competencies and soft skills.
• Blaming the economy for lack of new business when partners are not successfully implementing their personal marketing plans and are not held accountable.

For the complete article, read “C'mon Man!”

From RedZone Play of the Month, Accountants Advisory Group, January 2013, http://www.AccountantsAdvisory.com.