October Leadership Forum
Vol. 3 No. 10, October 2011
The Leadership Forum is a panel of the most prominent thought leaders in the profession. Each month we ask them to respond to a question dealing with CPA firm management and leadership.
This month's question is: What is your opinion on using benchmarking as a management tool in a CPA practice? What, if any, are the important areas to benchmark?
Consultants and Other Prominent Observers
| August Aquila | Aquila Global Advisor Group, LLC | www.aquilaadvisors.com [email protected] |
| ...it can highlight where a firm is above or below the average. Unfortunately, firms should not feel good that they are average...More | ||
| Ron Baker | VeraSage Institute | www.verasage.com [email protected] |
| ...major problem with benchmarking studies and best practice reports is that one is studying the results of a process, but not the process itself...More | ||
| Larry Bildstein | The Whetstone Group | www.thewhetstonegroup.com [email protected] |
| As it relates to the firm's investment in business development efforts, it might be good for a firm to benchmark against itself tracking results year over year...More | ||
| L. Gary Boomer | Boomer Consulting, Inc. | www.boomer.com [email protected] |
| ...agree in advance with regard to their important benchmarks: associates with client satisfaction, standard processes, talent development and financial...More | ||
| Rex P. Gatto Ph.D. | Gatto Associates, LLC | www.rexgatto.com [email protected] |
| ...People within the firm need to be led through the change process and be willing to accept the benchmarking process of being compared with the performance metrics...More | ||
| Angie Grissom | The Rainmaker Consulting Group | www.therainmakeracademy.com [email protected] |
| ...Take a firm who fits within the average range in some area (like realization or billing rate) so they are unmotivated to improve in that area, but in reality, some improvement is actually needed...More | ||
| Bob Lewis | Visionary Marketing | www.thinkvisionary.com [email protected] |
| ...A method of telling you when a problem appears to be present or coming your way. They are not absolutes though...More | ||
| Patrick Pruett | The Alliance of Professional Associations and Enterprise Network Worldwide | http://enterprisenetworkworldwide.com [email protected] |
| ...set targets for where your CPA firm needs to be in relation to competition. Obviously the better the survey the greater comparison you will have. The best surveys allow you to:...More | ||
| Paul Rich | Rothstein, Kass and Company | www.rkco.com [email protected] |
| ...we should think very strongly as consultants about offering this to our clients, as they will not only benefit from benchmarking but they can then look upon us as people who offer this service , which can become another profit center for us...More | ||
| Marc Rosenberg | The Rosenberg Associates | www.rosenbergassoc.com [email protected] |
| ...Benchmarking is useful to all forms of organizations because it's a great way (though not the only way) to measure progress and success...More | ||
| Bryan Shelton | The Rainmaker Consulting Group | www.therainmakeracademy.com [email protected] |
| ...benchmarking can provide a firm's leadership with confidence in discussing firm metrics by having the ability to rely on hard data and use that information in the decision making process...More | ||
| Joel Sinkin & Terrence Putney | Accounting Transition Advisors | www.transitionadvisors.com [email protected] [email protected] |
| ...Be careful to consider variances between firms due to geography and firms size. For instance, billing rates...More | ||
| Sandra Wiley | Boomer Consulting, Inc. | www.boomer.com [email protected] |
| ...firms try to watch too many factors and end up falling into the analysis paralysis trap. Great leaders will use fewer benchmarks...More | ||
| Jennifer Wilson | ConvergenceCoaching LLC | www.convergencecoaching.com [email protected] |
| I think all CPA firm leaders should know how their firm "stacks up" compared to others. Benchmarking is one form of comparative -- exchanging best practices is another...More | ||
Firm Leaders
| Richard A. Berkowitz | Berkowitz Dick Pollack and Brant | |
| Benchmarking is a useful tool to outline the parameters of performance. It identifies a range of possibilities and may provide management with a warning if your Firm is outside the range. However, every firm operates in a unique culture. Whether the benchmark informatiion is relevant or not is dependent on the custom features and people in that firm. Important areas to benchmark include firm policies and procedures; LUBRM; personnel statistics(customized to a region); firm services. | ||
| Ed Fahey | RINA Accountancy Corporation | |
We absolutely want to know how we compare to other firms. It is difficult to get perfect matches given geographic and practice mix differences but it is useful to understand the areas creating differences and the drivers of comparative performance. Some obvious areas are:
2.) Realization 3.) Utilization 4.) Facilities, marketing, training and technology expenses |
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| Bob Knight | Lane Gorman Trubitt, PLLC | |
| It is a helpful tool for strategic purposes. However since the data is often based on last year's numbers, benchmarking statistics are not as helpful when making real time tactical decisions. | ||