Is Your Firm Facing Reality?

Source: RedZone, Play of the Month

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

The CPA profession has changed significantly (continuous consolidation, lack of quality CPAs, baby boomer partners retiring at a rapid pace, increased competition, etc.) and many firms are having difficulty adjusting to this change and to the related new reality – they are falling into deep denial.

The following are common symptoms of CPA firms in denial:

• Believing they can be successful in the long-term without strong leadership at the managing partner level.
• Avoiding merging into a larger firm (despite having no succession plan in place) because some partners don't have “the stomach” for a merger or because of the remote possibility that a firm of young successful partners will merge in and provide an exit strategy for the firm's partners.
• Not investing in quality professional marketing and human resource directors or consultants because the partners feel it's not a necessary element of succession planning.
• Running the practice day to day as a preferential strategy over developing a strategic plan for two- to five-year intervals, with partner accountability for implementing the plans.
• Promoting managers, who will never be equity partners and who don't bring in new business, to non-equity-partner status as a retention strategy.
• Thinking that a compensation system based on collections rather than on partner performance will motivate partners to build a firm of the future.
• Believing it's acceptable to fail to implement action items from annual retreats because the partners are too busy and the tasks at hand will eventually be accomplished.
• Assuming that past success guarantees future success.

For the complete article, read “The Denial Syndrome in the CPA Profession.”

From RedZone, Play of the Month, Accountants Advisory Group, http://www.AccountantsAdvisory.com, January 2012.