CPA Trendlines

Your Opinion Needed: How to Spot Top Talent

What’s partner material at your firm?
Click here to join the survey; get the results.

The CPA Trendlines Top Talent Survey 2012

by Rick Telberg
CPA Trendlines

Early returns from the new CPA Trendlines survey into identifying and managing high-potential professionals suggests that, beyond ability, firms are more intent than ever on finding well-rounded individuals capable of taking initiative and developing new business.

Above is a word picture of some of the verbatim responses we’re capturing. What are the traits you look for in new hires? Here are a few of the more interesting answers: READ MORE →

What’s Working, What’s Not in Accounting Marketing Today

Accountants pinpoint winning strategies and bottom-line results. Join the survey; get the topline results.

by Rick Telberg

New CPA Trendlines research conducted for The Seven Keys to Successful CPA Firm Management program isolates at least three defining characteristics of peak performing accounting firms.

The research results, to be unveiled in a two-hour workshop, show that so-called SevenKeys Leaders are:

• 19 times more likely than lagging firms to grow revenue faster than most competitors.
• 14 times more likely to be more profitable than most competitors, and
• 11 times more likely to be satisfied with their firm’s performance in marketing and business development.

Bill Wheeler

The new research findings also reveal the winning strategies and tactics deployed by the leading firms. At the top of the list for SevenKeys Leaders: Networking, social media and blogging,  public speaking, and website upgrades. Workshop attendees will get the full survey results, apply the new benchmarks to their own practices using self-assessment scoresheets, and use a specially designed workbook to lay out action plans.

Overall, the data seem to show that firms are narrowing their marketing efforts while generally increasing overall activity. And many accountants have been happy to share some of their secrets with CPA Trendlines.

Here are a few: READ MORE →

The Accounting Profession Promise that Could Change Everything

“30 minutes or it’s free;” “Absolutely, Positively Overnight;” “No Surprise Billing. Ever!”

Edi Osborne

by Edi Osborne
Mentor Plus

What do these three tag lines have in common? Predictability.

Dominoes and Fed Ex built their entire business model on making (and keeping) an uncomplicated predictability promise to the customer.  Dominoes and Fed Ex looked at their marketplace and asked one simple question, “What is your number-one  frustration in dealing with pizza and package delivery?” Those frustrations were dissected and turned into game-changing promises that rocked everyone else in their industry.

In the same way, accounting firms that adopt a “no surprise billing” promise could be game changers in their marketplace as well.

More from Edi Osborne for CPA Trendlines PRO Members (Go PRO here):

• Score Your Firm on Eight Critical Success Factors
• The Cloud Won’t Make You into a Superhero
• The Big Mistake CPAs Make in Client Service
• Can Your Clients Tell if You Are Faking It?
• Take the Passionate Accountant Quiz
• Client Service Ideas? It’s in the Doing.

Game changing innovations are not limited to big companies. In fact, even the smallest of accounting firms are in a position to be game changers.

READ MORE →

How Firms Unleash the Power of Diamonds, Cash Cows and Fat Cats

Gale Crosley

Dozens of accounting firms are turning a business cliche into new growth.

by Gale Crosley
Crosley & Co.

An Internet search for the term “predictable growth” yields millions of links to websites, videos, books, and consultants. There seems to be no doubt about the idea that growth can be planned and charted.

But for accounting professionals who are trying to grow their firms, it may seem that there’s nothing at all predictable about sources of opportunity and how to manage them. If that’s your situation, it may be because you haven’t yet unlocked the power of the product lifecycle. READ MORE →

Rx for Marketing Success: E-Blast Twice Monthly

A new study by an email marketing agency for accounting firms finds that “bi-weekly newsletter launches are the most common sending frequency.”

Some 44% of accounting firms launch email maketing blasts to clients, prospects and referral sources about every two weeks.

GET THE INSTANT DOWNLOAD: Click here for the complete report (19 pages, PDF)

READ MORE →

No Alignment? No Execution.

Seven steps to getting things done right.

August Aquila

Strategy, they say, is easy. Execution is hard.

Excellent execution beats excellent strategy most of the time. Unfortunately, at many accounting frims, good strategies die a slow death as intertia, obstinacy or simple disinterest take hold.

The roadmap to success may seem easy to follow. But, as management consultant August Aquila says, “it takes real commitment from the firm’s leaders to do it and follow through.”

Aquila is CEO of AQUILA Global Advisors, specializing in succession planning, mergers and acquisitions, and compensation plan consulting. Here’s his seven-step formula for translating good intentions into real results. “If you follow this process you will improve performance and ultimately profits,” Aquila says.

Step 1. Firm Purpose – All accounting firms, even those that do primarily write-up work, are in the business of making business and financial sense of a changing and complex world. We exist to make our clients’ lives easier. While some would say the purpose of the practice is to make money that is not your primary purpose. Money is the result of being true to your firm’s purpose.

Step 2. Firm Values – Firms need to identify the common values under which they operate. The first step is to identify the values that are important to you and your partners. Next define the values and finally, ask everyone in the firm to provide some examples of how they see the values being lived in the firm. You see what is important in the firm through the accepted behaviors (both good and bad) of the partners and employees.

Step 3. Firm Vision – Vision is all about the future. Clients don’t care about what you want to become. For example, firm A wants to become the regional powerhouse in state and local taxes for mid-size manufacturing companies with revenues between $50M and $250M. That’s what they want to be in 5 or 10 years. Today, however, they are not that powerhouse. Hence a prospect who needs the powerhouse today would not consider firm A as a viable service provider.

Step 4. Firm Strategy – The strategy tells the firm how and what needs to be done to achieve its vision. For example, firm A above might have a strategy of acquiring the state and local tax expertise rather than developing it internally. Two different approaches to get to the same place.

Step 5. Objectives and Measures – Strategies don’t mean anything unless you set out initiatives with clear goals and measures. Many firms today will set goals in four areas of the practice ? financial, client, systems and employee growth/learning.

Step 6. Personal Objectives – This is a critical step in the alignment process. There is basically one question you need to ask ? “How does what I do help the firm to achieve its strategic objective(s) in one or more of the four areas?”

Step 7. Rewards and Recognition – Finally, the firm needs to reward its performers more than its non-performers. If you don’t tie goal attainment on the individual level to compensation and performance bonus you are missing the key ingredient of success.

More August Aquila on CPA Trendlines:

• 12 Steps to a Foolproof Merger
• Seven Steps to Building a Great Partnership
• 5 Success Tips for Tax Season
• Managing Partner Job #1: How to Get Buy-In
• The 10 Basic Ways to Boost Profits at an Accounting Firm
• The War for Clients: Aquila’s Top Three Strategies
• Can You Really Change a Partner?
• 11 Weekly Self-Assessment Questions for Professionals
• Seven Keys to a Successful Merger – Click here for the Pre-Merger Data Gathering Checklist for an Accounting Practice (PDF, 4 pages)
• Seven Steps to Enforcing Accountability among Your Firm’s Partners
• Five Steps to Achieving Partner Unity
• Eight Essentials for Measuring Client Service
• Partner Accountability: Seven Signs Your Firm May Be in Trouble
• Integration: Seven Keys to a Successful Merger
• 12 Things that Should NOT Be on Your Partner Retreat Agenda
• Five Ways How NOT to Implement a System of Partner Accountability
• Seven Reasons Why It’s Time to Start Holding the Partners Accountable
• 25 Ways to Grow Your Practice
• Are Bad Clients Driving You Crazy?
• Herding Cats: Change Management for CPA Firms

The Partner Compensation Checklist

Gary Adamson, Adamson Advisory

It’s a process.

by Gary L. Adamson
Adamson Advisory

There is a constant topic of conversation both inside firms and at almost every conference. It is the age-old question of partner compensation and “how do you do it”. As our firm grew, we evolved from everyone is equal, to the “slip of paper” approach, to a more goal driven, performance based system. Every firm is a little bit different but the issues surrounding how you split the pie are pretty consistent.

How you choose to solve the partner comp question in your firm depends on a number of things including size, number of partners and where you are on the firm age/evolution spectrum. There is a movement to more performance and goal driven systems even in smaller practices, and moving away from “we’re all the same.” We all know that the reality is that we’re not.

There is also a movement away from formula based systems. It is very difficult if not impossible to find the mathematical equation that will consistently result in a fair outcome. There are just too many variables that don’t fit well in a formula.

Regardless of the details of your plan, several rules or themes will hold true:

1. Judgment is always a critical part of the plan. Even in a formula based system, decisions are made on which criteria get measured and the relative weight of each one.
2. You are working with tangibles and intangibles. Tangibles are the things that we all measure like production, billings, business development, etc. Intangibles are the human factors and more difficult to measure such as leadership and team development.
3. No two partners are alike. You should consider different performance measures and goals based on the individual’s particular contributions to the firm.

The following checklist may provide a framework to get you thinking and to help you review your current process. It is not intended to be all inclusive or to fit you perfectly. Every firm truly is different.

• What target percentage of total comp is salary (draw) vs. bonus?
• How much is at risk to the performance criteria? Is total compensation at risk or just the bonus? Consider how much of a potential roller coaster ride that you want.
• Interest on capital, if relevant
• Partner goal setting and results as a part of the process.
• Tangible criteria vs. intangible. How much of both does your plan incorporate? Remember that a significant dose of judgment is involved in both.
• Firm goals for the year are integrated with the comp plan? Knowing what the firm goals are and how each partner makes a contribution is key.
• Is there a discretionary or non-assigned pool of money that can be used by the Managing Partner or partner group to reward exceptional performance or to make adjustments where needed? This really gets to the question of how much the tangible vs. the intangible criteria drive your system.

Some of the more common performance criteria are:

• New business development – new clients.
• New business development – up sells, cross sells to existing clients.
• Firm leadership and management.
• Staff mentoring and development.
• “Good of the firm” activities.
• Working capital consumption (WIP and A/R management).
• Job profitability and realization.
• Staff utilization.
• Book of business. Be careful putting too much weight here.
• Charge hours. Be careful putting too much weight here.
• Specific personal or firm goals.
• Successful transition of client responsibilities for a partner nearing retirement.
• Movement of client responsibilities from one partner to another. The comp plan should encourage and enable this to help keep the firm’s rainmakers free and to assure that the client is served by the best partner and team.

What is your process? This includes who is responsible and the timeline. An abbreviated example of a system in a firm with goal setting and a compensation committee might look like:

1. The firm establishes overall goals for the year.
2. The Managing Partner establishes goals with each partner, integrated with the firm goals and monitors performance with each partner during the year.
3. The MP and each partner meet at year end to review achievement of goals and summarize performance.
4. The MP makes a recommendation of the year end bonus allocation to the Compensation Committee based on each partner’s performance and the judgment of the MP.
5. The Compensation Committee reviews and adjusts, if necessary, the MP recommendation.
6. Salaries (draws) are set for the coming year by the MP and Compensation Committee.
7. The Compensation Committee or governing board is responsible for a similar process with the MP.

The ultimate goal is to find a fair allocation of firm profits among the partner group. One size clearly does not fit all firms or partners and, as your firm evolves, your partner compensation process needs to evolve along with it.

Gary Adamson is a former managing partner of Brady Ware CPAs, serving for 25 years and taking the firm from nine to 120 employees. Today he is the president of Adamson Advisory, specializing in practice management consulting for CPA firms.

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