BEST PRACTICE SUGGESTIONS ARCHIVE
Every month for over three years we have selected the best ideas for practice improvement from the accounting literature. Here is the complete list together with hyperlinks to the source articles:
BEST PRACTICE
LINK TO ARTICLE RESOURCE IN CPA LEADERSHIP REPORT
DATE OF ARTICLE
Strategy and Profitability
"Until you start hearing complaints that your rates are too high, they may be too low and you should reexamine them."
May 2009
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.
April 2009
Define the roles and responsibilities of:
- Partner group. They should have responsibility for strategy and policy.
- Managing partner. Implements strategy and policy and holds partners accountable for their responsibilities. He or she should be selected on the basis of leadership skills, not seniority.
- Individual partners. They report to the managing partner. Compensation should be based on their contributions to firm strategy.
April 2009
Limit your goals to a realistic number (if everything is important, nothing is important)
December 2005
Your firm's growth depends on the growth of your clients, and you must be selective about the clients you serve.
April 2005
Your billing system should take into account the investment in technology, which may have reduced the number of hours required to complete an engagement.
July 2005
Consider appointing non-partners to be niche leaders
May 2005
December 2007
Contact liability insurance carriers for suggested wording for many types of engagements
January 2007
Management/People/Culture
Value Pricing: Continue to track hours to control costs. Offer hourly bookkeeping services plus value pricing for some clients.
November 2010
Accountability: To achieve accountability, concentrate on behavior and the way things are done rather than checklists and production measures.
November 2010
Internal Competition: Stop measuring yourself against your teammates and begin to measure yourself against your external peers.
November 2010
How to Make Your People Better: Stop obsessing with your own talents and start helping your people develop theirs.
November 2010
Partner Selection: Among other things partners should demonstrate A willingness to put the firm above his or her own goals
October 2010
Determine if You Have Partner Unity: Do they Agree on the mission, vision, and core value?
Are they open with one another? Are they willing to engage in passionate debate of ideas? Do they hold each other accountable?
Are they open with one another? Are they willing to engage in passionate debate of ideas? Do they hold each other accountable?
October 2010
When to Fire Clients:
- Client is never satisfied.
- Client is a slow or reluctant payer.
- Client does not seem to value what you do.
- You don't look forward to seeing this client.
- You receive complaints from staff members who work with the client.
September 2010
Checklist for Retreats: Succession, Partner Accountability, Marketing Strategy, Profitability, Training, Technology Planning
July 2010
Checklist for Managing Partners: Organization, Culture, Dissemination of Information, Work Assignments, Decision-Making, Practice Development
July 2010
Lower Partner Chargeable Hours: Correlates with growth, better retention, and thoroughly engaged managers.
July 2010
Benchmarking Can Lead to Mediocrity: It encourages sameness. To be an outstanding firm you have to be different.
July 2010
Perfect Partner Attributes: Respectful of other partners, entrepreneurial, networker, trusted, role model, decision-maker, visionary, good delegator, accountable, resolver of conflicts.
June 2010
Avoid Risk of Strategic Alliances: Attorney review, beware of preprinted agreements, assure compatibility of cultures, check professional liability insurance, maintain quality control.
June 2010
Debrief Lost Clients: See Lost Client Analysis Questionnaire
June 2010
Profits on Clients: Improve by higher prices, better allocation of resources, lower cost resources, better productivity, or ceasing services.
May 2010
Staff Competency: Competent professionals are perceived as technical expert, need little oversight, and know when to ask for help.
May 2010
Training Your Leader: Invest in CEO training. Association meetings and MAP conferences are not enough.
May 2010
Leaders' Behavior: Effective leaders use a combination of transformational, transactional, and servant behaviors tailored to particular situations or people.
April 2010
Teaching Managers to Manage: The number one cause of employee dissatisfaction: It is the quality of the first-line supervisor.
April 2010
Break the Mold: Modeling a firm on the strengths of a technology company, e.g.: flexible telework policies, Web and cloud based solutions, aggressive social media participation, dedication to change based on client criticism.
April 2010
Tips for dealing with problem partners: Face-to-face confrontation/reduce influence.
April 2010
Partner Compensation: Base compensation may be tied to gross revenue and, generally, should not be more than 60 to 70 percent of total compensation.
April 2010
Be A Real MP: Limit simultaneous changes. Do a personal development plan. Get training in leadership skills. Measure goal achievement. Don't cede control to loud voices.
March 2010
What Soft Skills Do You Need?: How to supervise, manage time, motivate, delegate, network,
use social media, communicate under difficult circumstances, manage engagements, and make presentations.
use social media, communicate under difficult circumstances, manage engagements, and make presentations.
March 2010
Planning: Every partner writes a plan for 2010 -- fees per month, hours managed, time budget. Total of all plans is the firm's plan.
February 2010
Lean Six Sigma: Eliminates non-value-added steps and inefficiencies in client service processes.
February 2010
Culture: Culture often develops on its own. Intentional culture change--lock doors so everyone passes through central area to build community.
February 2010
Performance: People perform best when they believe they can. Read this case study for an example.
February 2010
Staff Mistakes: The bosses in the firm take the heat for their people.
January 2010
Outsourcing: DO NOT outsource tax returns as an opportunity to do more returns at a lower price.
January 2010
Knowledge Management: Knowledge shouldn't just reside with individuals, but should be documented and easily accessible by all.
January 2010
Partner Compensation: A subjective compensation system is more effective than a system driven by book of business, etc., in getting partners to think long-term.
December 2009
Performance Review: Immediate feedback, especially if something needs improvement, is much more important than any formal, sit-down, go-thru-the-forms process.
December 2009
Unique Abilities: It's easier to get more leverage from your strengths than your weaknesses. Don't ignore your weaknesses but don't give them more than 5-10% of your attention.
December 2009
Client Relationships: Client focus should not be about winning competitive battles, but increasing the collaborative relationship with clients themselves.
December 2009
Internal Succession - How to determine whether your firm is able to do an internal succession plan--poll the partner group to get an idea of how many will retire or cut their hours in the next five years. If you have high-level professionals ready to fill their shoes, an internal succession plan may work.
November 2009
Developing Employees' Leadership Skills - Provide constant feedback; offer mentors; explore social networking; give everyone the opportunity to develop leadership skills; take staff to client meetings; let them take risks.
November 2009
How much Technology - Every firm should increase its technology investment by one percent of revenues, focusing that investment on workflow, processes, and, in particular, training.
November 2009
Prepare a questionnaire prior to your retreat:
- What is the greatest threat to the firm? How do we change to overcome it?
- Which processes should we improve?
- How can we be a learning organization?
- How can we change our work product to improve client satisfaction?
- What are the primary concerns of senior partners? Junior partners?
October 2009
Lean Six Sigma helps firms manage the workflow in such a way that staff members can accomplish more work in less time. We are not talking about making staff members work faster. It is just the opposite. By speeding up the process we slow down the frantic work pace.
October 2009
Most meetings are boring because they lack conflict. Meetings should give people something to care about, and create anxiety if they don't engage. Raise these issues at the beginning of meetings, before the audience checks out.
October 2009
CPA firm management mistakes:
- Viewing the CEO function as monitoring and reporting rather than creating accountability for achieving strategic goals.
- Dumping work rather than delegating.
September 2009
People should not be designated as either leaders or followers--one person can be a leader in one situation and a follower in another.
September 2009
Partners need to push back the routine review they do in busy season (something that has needed to happen for years for some partners), and actually use their more expensive "consulting service codes" to mentor, counsel, and focus their clients on the issues of business survival.
August 2009
A clear, defined scope of engagement can protect you in a third-party lawsuit. Some auditors include in the bound audited financial statements a separate page that makes third-party users subject to the terms of the engagement letter.
July 2009
Sticker shock is healthy. Failure to induce sticker shock means you are probably under-pricing services.
July 2009
Unless specifically addressed in a contract or a statute, each party to a lawsuit pays its own attorneys' fees. It is, therefore, often advisable to include a fee-shifting provision in your engagement letters.
July 2009
Tell the firm what you do. Managing Partners and Firm Administrators should create detailed position descriptions and share them with the other partners. Use that act to open the lines of communication so you are sure you are doing what they value and that they value what you do. Does Your Firm Know What You Do?
June 2009
Consider the alternatives before you let go of people you'd rather retain. Options include:
- Reducing workweek.
- Freezing salaries.
- Reducing or suspending firm matching contributions to retirement plans.
- Allowing some employees to work at home.
May 2009
When choosing a technology leader, technical skills have surprisingly little to do with it. Driving a firm's IT strategy is a lot like driving a car. It's more important to know where you're going than it is to understand the mechanics of how the car will get you there.
May 2009
Maintain a pipeline report by partner and manager on cross-serving opportunities. Focus on the pipeline reports at your monthly partner and manager meetings.
April 2009
Poor performance is usually about confidence, not competence-- probably related to something deeply personal. The only way to deal with it, is to talk about it.
March 2009
Listening--CPAs who are good listeners have a better understanding of client problems and more success in helping solve them.
March 2009
January 2008
The managing partner should conduct periodic, perhaps daily, rounds of the office.
February 2006
When considering the admission of a new partner, evaluate his/her ability to manage people as well as clients.
November 2005
The role of your managing partner is to provide leadership and vision, drive the firm toward the realization of its goals, and manage the other partners--not to be the chief administrative officer.
July 2005
Partners must be focused on leadership--including training, mentoring, marketing, and sales, rather than obsessing about their personal chargeable hours.
March 2005
Put one person in charge of pricing.
September 2005
Pay close attention to all client relationships that are significant to any partner's personal income
November 2005
Provide growth opportunities to the entire staff rather than to star performers only.
September 2005
Be skeptical about decisions based on consensus in group meetings.
April 2005
Before scheduling a meeting, determine if its purposes can be accomplished by communicating with a few people by phone or e-mail
July 2005
Before scheduling a meeting, determine if its purposes can be accomplished by communicating with a few people by phone or e-mail
July 2005
All your professionals should sign non-compete agreements
March 2005
July 2006
If you use staff pools centralize the selection function and bar selection by individual partners
September 2005
Prohibit partners from unloading their unwanted clients on new partners
Partners must be made aware they are role models for staff
April 2006
Partners
Accountability: Partners should be formally evaluated on several aspects of their performance--including how they contribute to firm goals.
January 2010
Client Service and Relationships
Client Conversations: Lower your threshold for a client meeting. Talk often to clients, and learn how to hold an engaging conversation.
September 2010
Prevent Fee Shopping: Provide clients with information on their industries, meet with their bankers, increase face- to-face meetings, help them cut costs, and do the unexpected.
March 2010
Value Pricing: Some clients will pay more if asked. Focus on them, NOT on those looking for lower prices.
January 2010
Cross-selling - As the person with the scarce resource -- the relationship -- you should attend the initial meeting between your colleague and your client.
November 2009
Just about every accounting firm claims to provide "a personal touch" and "24/7/365 attention." It takes a lot more to win new clients and to retain existing ones. Positioning yourself as your clients' primary business advisor is one way to differentiate yourself.
August 2009
Discover client concerns to help them—and generate engagements and revenue by using these questions (click on the link in the next column).
July 2009
| Decisions about the acceptance of clients and the assignment to partners should be made by the firm, not by the individual partners. | Choosing a Governance System | July 2005 |
| Contact liability insurance carriers for suggested wording for many types of engagements. | Trends in Engagement Letters | January 2007 |
| Conduct a client survey after each significant engagement | Client Surveys Should be Conducted After Each Significant Engagement | December 2005 |
| Review each client, at least, annually to determine if you are meeting all its unmet needs | The Process of Managing Clients | April 2006 |
| Beware of significant client accounts to which only one person is charging time, risking under-serving the client and having no succession plan | New Ideas | March 2005 |
| When a prospect mentions a problem, refrain from leaping at the opportunity to be a savior | Don't Frighten Your Prospects | June 2006 |
| Focus on the prospect's needs rather than on your own excellence | Which of These Marketing Mistakes are You | July 2006 |
| Don't let client problems distract you from the firm itself, and don't stay busy for the sake of staying busy. If a service is unprofitable, discontinue it or find the right skills (through hiring or training) to make it profitable. | Do You Have a Sense of Urgency? | January 2009 |
| Small businesses are dependent on their CPAs to help them deal with a wide range of problems such as helping them anticipate the effects of, and prepare for, a decline in sales (including help with cost reduction). | Are You Providing These Services for Your Clients? | January 2009 |
| No client is perfect. Propose based on what they commit to but invoice them for what they actually do or don't do. Don't whine because they aren't perfect. Just implement a system that accommodates that imperfection without penalizing your firm or creating animosity with your client(s). You might want to try Client Service Agreements. | Too Much Griping About Clients | January 2009 |
| Staffing | ||
| Use technology to increase productivity and mitigate the need for more people (e.g. document management systems, which also help retain people) | Innovative Approaches to Staffing Problems | November 2005 |
| Hire smart, non-accountants to fill certain jobs including management role, IT, finance, service areas and firm administration. | Efficient Service Delivery Requires Leadership | March 2005 |
| Accent on Human Capital | March 2005 | |
| Reconfigure some jobs to create positions to be filled by non-accountants | Creative Recruiting | July 2005 |
| Look for recruits who have the characteristics of your most valuable current staff members with longevity | How to Reduce Staff Turnover | May 2005 |
| Maintain a network of ex-staff members--invite them to CPE events, social events, etc. | PCPS White Paper on Recruiting and Retention | January 2006 |
| Training/learning should include soft skills | Ten Ideas for Becoming a Better Managing Partner | June 2005 |
| The Growth of Learning in Accounting Firms | June 2005 | |
| Compensation | ||
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Compensation should be based on what creates value. In accounting firms, value is created by identifying and satisfying client needs in a profitable manner, and by developing processes and systems that improve work flow efficiencies. |
Using Technology to Cut Costs | August 2009 |
| Use performance measurement to help determine compensation--all compensation, not just bonuses. | Basing Compensation on Performance Management | April 2006 |
| Compensation Method Can Develop Internal Entrepreneurs |
January 2007 |
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| Compensation, How to Implement a Performance Based System | April 2007 | |
| Tie compensation to the strategic plan | How to Tie Compensation to Strategic Plans | September 2005 |
| Partner Compensation Systems are Changing | September 2005 | |
| The partner compensation system should promote collaboration among partners | Crystallize Your Thinking on Partner Compensation | July 2006 |
| Succession/M&A | ||
| Early Retirement: Partner/shareholder agreements that provide for early retirement benefits should condition those benefits on the partner giving at least two years' notice. |
Recession Affects CPA Retirement | September 2010 |
| Avoid an Upstream Merger: Dig in to a specialty and become the acknowledged go-to person for all technical questions. |
Is Your Firm on the Verge of Merging? | April 2010 |
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Obstacles to succession:
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Succession Planning Obstacles | September 2009 |
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Partners should list their top 10 clients and recommend back-up partners/senior managers. They should do this two years before expected retirement. |
Keeping the Client Annuity Alive | August 2009 |
| Inform clients about the merger before the news becomes public, but close enough to the announcement to minimize the time they have to make erroneous assumptions. Visit the most important clients. | Keeping a Merger From Falling Apart | May 2009 |
| In a multi-partner firm, if a senior partner's equity is distributed pro rata to the remaining partners, another senior partner can end up with 51% of the equity, giving him total control. This may be dangerous if that partner shifts to an "eat what you kill" system. | Common Pitfalls in Ownership Distribution | May 2009 |
| Don't rely solely on partners to make judgments about promotions. Sometimes they fear that promoting someone will leave a void. Obtain assessments from various sources. | Avoid These Mistakes in Succession Planning | March 2009 |
| Your succession plan should provide for the replacement of every significant leader in the firm | The Good and Bad News on Succession Planning | May 2005 |
| When the founding partner(s) retire(s), avoid the tendency to manage by committee | Succession Planning | March 2005 |
| Don't merge to solve problems that are better solved internally | Before You Merge, Consider These Issues, Can You Grow Without Merging Up? | April 2005 |
| Make sure the firm is not leaving too much voting power in the hands of the wrong people. Large voting blocks should be held by your best leaders. But often, without some thoughtful reallocation process, weaker partners will end up with these large voting blocks. | Continuing the Practice | January 2009 |
| Administration and Technology | ||
| Collections: Know clients' A/P procedures. If there is a 45 day turnaround policy, ask for a quicker one. Follow this and other tips in the article. |
Stay on Top of Receivables |
October 2010 |
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Cut technology costs by:
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Using Technology to Cut Costs | September 2009 |
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Collections should be performed by a part-time administrative person who is skilled in client communication and has no other priorities. |
Collections--Don't Just Leave it to Partners | August 2009 |
| In a weak economy, pay attention to collections. One larger firm hired a full-time collections person. Small firms could assign an administration person to collections or the work could be outsourced. How the Strong Survive | How the Strong Survive | June 2009 |
| Prevent people from relying on paper after automating your document management system | Update on Document Management Experiences | June 2005 |
| Set up a system for archiving e-mails and incorporating them into the firm's policy manual | E-Mail Archiving | March 2005 |
| Invoices should be generated by non partners | Alleviate Your Collection Problems | December 2005 |
| Your billing system should take into account the investment in technology, which may have reduced the number of hours required to complete an engagement. | How Technology Affects Your Earnings | July 2005 |
| Marketing | ||
| Avoid Worst Practices in Proposals: Do not: be wordy, focus on the firm rather than on the prospect, share unnecessary information, fail to address the prospect's stated problems.. |
Are Your Proposal Letters Losing You Sales? | October 2010 |
| Becoming an Expert: Narrow the scope of your expertise. Focusing on your expertise allows you to command higher rates. |
10 Habits of Highly Effective Rainmakers | September 2010 |
| Do Not Sell: Clients don't care how wonderful you are. They only care about whether you can make them look like a hero. |
10 Habits of Highly Effective Rainmakers | September 2010 |
| Follow-Up: Spending marketing dollars without follow-up is a waste of money. |
Are Your Marketing Dollars Wasted? | July 2010 |
| Top Three Lead Generators: Networking, Mixers, Seminars |
Are You Doing the Right Things to Generate Leads? | June 2010 |
| Give Free Value: Some firms are educating clients and overcoming resistance with free valuable services. | Don't Sell -- Educate | February 2010 |
| Team Sport: Partners should view marketing as a team sport. And they should conduct penetrating analyses of needs, rather than emphasizing social events. | Making Practice Development a Team Effort | January 2010 |
| Websites: Don't put valuable content and tools in client-only sections of your Web sites. Put them "out front" where non-clients can see how brilliant and generous you are. | Your Clients Don't Care About Your Web Site | December 2009 |
| Many people think of value propositions as statements about their firms and what they do. Prospects don't care about your products and services, only about the results they will see. | Stop Talking About Yourself! | October 2009 |
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Marketing professionals should be aware of the expectation gap. Conduct a poll to determine:
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How Marketing Professionals Can Remain Viable | July 2009 |
| The conventional wisdom -- that the key to selling is a compelling value proposition -- is "demonstrably untrue." Follow your heart. Build the relationship. Tell the truth. Be transparent.. Do the right thing." Then the real "value proposition" becomes "the value the buyer gets from being able to have a trusting relationship with a seller." Selling: | What's Logic Got to Do With IT? | June 2009 |
| Your marketing plan should be one-page. | A One Page Marketing Plan--Emphasize the Doing | February 2006 |
| Partners and managers should prepare individual marketing plans that tie-in to (and maybe exceed in the aggregate) a firm-wide plan | A Potpourri of Ideas | May 2005 |
| Nine Sins | July 2005 | |
| Marketing plan should focus on niches | A Potpourri of Ideas | May 2005 |
| Avoid phrases like "quality service," "high integrity," "comprehensive services," etc., in expressing your brand identity? | Branding--What does it Really Mean? | February 2007 |
| Your brand message should express what you are as opposed to what you would like to be | So What is a CPA Firm's Brand? | September 2005 |
| Avoid group meetings in favor of one-to-one relationships with prospects and referral sources | Landing the Big Engagement | May 2005 |
| Beware of significant client accounts to which only one person is charging time, risking under-serving the client and having no succession plan | New Ideas | March 2005 |
| When a prospect mentions a problem, refrain from leaping at the opportunity to be a savior | Don't Frighten Your Prospects | June 2006 |
| Focus on the prospect's needs rather than on your own excellence | Which of These Marketing Mistakes are You | July 2006 |
| Risk Management | ||
| Social Media: Create guidelines, for staff who use social media tools. Then use them to "be the brand" by use of these tools. |
Risks of Social Media | March 2010 |