IPA Spotlight On … Rob Nixon

Name: Rob Nixon
Title: Founder, PANALITIX
Accomplishments:

Rob Nixon

Rob Nixon

  • Educated in excess of 170,000 accountants over 23 years.
  • Coached 800 accountants to success. Average profit increase in year one is 93%.
  • Authored three best-selling books on the accounting profession.
  • Built four successful businesses that serve the accounting profession.

Your new book is called, The Perfect Firm, Your Playbook for Building A Perfect Accounting Business. Is “perfection” even achievable?

There is no perfect firm. I’ve met 170,000 accountants and not one of them is perfect. There is no one-size-fits-all for the perfect firm. It has to be your version of your perfect firm. I wrote the book as a blueprint or playbook on what a perfect firm would look like if the reader did everything in the book. The book is full of strategies that have worked for thousands of firms around the world.

What’s the one area MPs should focus on to get started on the path to the perfect firm?

There are five sequential steps to creating your version of your perfect firm. It starts with a belief system that it is the owner’s business and no one else’s and should be designed your way. This is business by design, not by default. Step 1: What business life do the partners want to live? Step 2: What numbers do you want to achieve? Step 3: What services do you want to deliver? Step 4: What culture do you want to have? Step 5: Who are the ideal clients to fit steps 1-4? Business by design follows steps 1 to 5 in order. Business by default follows steps 5 to 1 in order.

How can accountants best get ahead of digital disruption to the profession?

Accountants need to brace digital disruption – not fear it. It is inevitable that machine learning, artificial intelligence, robotics and blockchain will fundamentally change the business model of accountants. It is an amazing opportunity to embrace the technology. The first step is to migrate all clients to cloud accounting. Then with real-time data they can offer predictive analytical services and proper numbers-based advice. Helping clients improve their systems dramatically reduces the time at the accountant’s office to do the client work.

You are an advocate for value pricing. Why?

The traditional model of time-based billing in arrears does not value the intellectual property (experience) of an accountant. Not only that, but it is highly unethical to bill in arrears. If you are adding value to the client’s condition then you should be rewarded based on your contribution, not on how much time it took to do the work. Accountants do not sell time – they sell what they know. What you know should be priced accordingly.  

Accountants like numbers, but you say some numbers are more important than others. Which numbers are firm leaders paying too much attention to?

There is a crazy culture of more billable time in the profession. I’ll give you more billable time says Johnny – I’ll just go slower and make mistakes – you’ve got your billable time. What a stupid focus. The focus on utilization hours promotes the wrong behavior. The other number accountants seem obsessed with is realization margin – we realized 88%, for example. Actually, no, you wrote off 12% and wasted $50,000 last month. When you price up front and drive time down by being more efficient you get positive realization and your average hourly rate increases dramatically. The magic number of an accounting firm is average hourly rate.

Final thoughts?

Accountants can change the world for the better if they are proactive and add value. Nearly every business in the world is connected to an accountant. Accountants can make a massive difference if they leverage off their trusted advisor status and help their clients with numbers-based advice.

Do you know someone else who would make a good Spotlight? Contact Christina Camara.

IPA Spotlight On … Henry Koziol, Freed Maxick CPAs

Name: Henry Koziol

Firm: Buffalo, N.Y.-based Freed Maxick CPAs (FY16 net revenue of $45.2 million)

Title: Managing Director, Chairman, Board of Directors

Accomplishments:

Henry Koziol Jr.

Henry Koziol Jr.

  • Joined Freed Maxick in 1983 and elected managing director this year, responsible for directing the strategic growth of the firm.
  • Develops and institutes firm’s technology plan, and has served as a member of the peer review team and the development, construction and executive committees.
  • Past chairman, board of the Western New York Chapter of the American Diabetes Association; board of directors, Buffalo Niagara Partnership.

How are you preparing now to step into the top job at Freed Maxick July 1?

I have been on our executive committee for a number of years, and have been involved in most of the firm’s significant decisions. Therefore, the amount of time to get up to speed should not be too considerable. Lately, I have been spending a lot of time meeting with my partners and our clients – trying to listen more and talk less.

You’ve said that what differentiates Freed Maxick is its people and depth of knowledge. How do you hope to enhance both as managing director?

We are constantly looking for individuals with unique talents and skills, in anticipation of the rapid changes in the industry and to deliver the type of services we provide. However, that’s not all we look for in potential candidates. We recently created our purpose statement, which highlights our beliefs in making a difference in people’s lives through our passion for helping others and inspiring those around us. It’s important to us that our people and processes live this every day.

The firm now has four offices in New York. Do you plan to expand beyond the state? Are you looking to merge in smaller firms?

Our strategic plan includes expansion in two areas – our geographic footprint and services offered. Conversely, many of our services such as asset-based lending have a national scope, so the physical office is not necessarily a factor. We are constantly evaluating merger candidates both in and outside of our current markets, but our requirements are very high. The candidate must have a similar culture in addition to fitting into our strategic plan. We won’t do a merger just to increase the top line.

Looking ahead, how do you see AI and automation changing the way Freed Maxick does business?

We have already invested in business intelligence as a client service, and will continue to do so. We know there will be rapid changes in how accounting firms service clients, and we remain committed to providing world-class service.

Final thoughts?

It is an exciting time to be in the industry. I have been heavily involved in our firm’s technology platform, which gives me a unique perspective of the rapid technological changes that continue to happen. I believe that there will be wonderful opportunities ahead for our firm, our clients and our people as we utilize these technologies to deliver highly valued and desired services.

Do you know someone else who would make a good Spotlight? Contact Christina Camara.

IPA INSIDER: June 2017 News

Listed below are the Top 10 most-read stories on the INSIDE Public Accounting blog for the month of June.

  1. Settlement Reached in Andersen Tax Trademark Dispute in California
  2. Kucera Named AAM’s 2017 Marketer of the Year
  3. CLA Merges in Southern California Firm
  4. IPA Vendor Spotlight On … Chandra Bhansali, AccountantsWorld
  5. Sikich Names Murphy PIC of Manufacturing and Distribution Practice
  6. Dempsey and Team Join CLA in Idaho
  7. Platt’s Perspective: Classifying Clients – It’s Good For The Top And Bottom Line (And Everything In Between)
  8. Canada’s MNP Announces Two Mergers
  9. AAFCPAs Hires New CFO
  10. Weiner Named Chair and CEO of Marcum, Bukzin Named Vice Chair

IPA Vendor Spotlight On … Chandra Bhansali, AccountantsWorld

Name: Chandra Bhansali
Company: AccountantsWorld
Title: Co-founder (with wife Sharada) and CEO

Accomplishments:

Chandra Bhansali

Chandra Bhansali

  • Introduced the first Windows-based based professional tax system in the 1990s.
  • Created the first payroll processing solution exclusively for accountants.
  • Used cloud technology to create Accounting Power for firms to offer client accounting services, countering the impact of do-it-yourself accounting systems on accounting practices.
  • Named one of the “100 Most influential People in Accounting” by Accounting Today for over 10 years.

You’ve been “in the cloud” for much longer than most and seem to have a knack for identifying emerging technologies. Can you offer any practical advice on how accounting firms can be more ‘future-ready’?

I’d tell them, “You are your clients’ most trusted advisor. What makes you their most trusted advisor? Your ability to analyze all the facts and help your clients make informed decisions based on those facts. To be future-ready, you need to use this important trait. It’s a fact that migration to the cloud is inevitable. Given that fact, when will you benefit the most from the migration? Should you wait until you are pushed to the wall, or move to the cloud sooner, in a more strategic way, to make the most of the migration?” It’s ironic that many of the same accountants who are their clients’ best advisors falter when making some of the most important decisions about their own practices.

Client accounting services seems to be a growing niche. Are accountants taking better advantage of the power of technology to help their clients?

Very few accountants are taking full advantage of technology to help their clients. Part of the problem is that most accountants don’t realize the capabilities of professional cloud solutions like Accounting Power. Given the choice, a large percentage of small businesses would not want to do their accounting in-house. They consider accounting to be a hassle and would love to offload it to their accountants, but most accountants don’t offer client accounting services (CAS), because functions like bill payment have traditionally been low-margin services. But with programs like Accounting Power, an accountant’s staff can now do everything their client’s staff did, only much faster and more accurately – all without leaving the office. Because of advances like this, many accountants are currently offering highly profitable CAS, which will ultimately become a major growth area.

What’s the biggest mistake firms typically make when making the move to the cloud?

The biggest mistake firms typically make when migrating to the cloud is to make a lateral move in which they move from desktop to cloud, yet their practices realize only marginal gains. That happens primarily for two reasons. First, these accountants don’t do their homework and learn about all the available solutions. Second, they are stuck in their current processes. To take full advantage of the cloud, you need to change your processes. If you keep an open mind and align your processes for optimal performance, then you will be able to take your practice to new heights that were never before possible.

There’s been lots of talk about the potential impact of Artificial Intelligence on the accounting profession. What’s your view?

My view about Artificial Intelligence is very simple – accountants with “Predictive Intelligence” will actually benefit a lot from AI. I’ll give you a simple example. AI will certainly minimize mundane tasks like data entry. If you let your clients offload their accounting work to you today, your fees will be based on what they currently spend on their bookkeeper or in-house accountant. When some of the capabilities of AI kick in to virtually eliminate data entry, that will greatly reduce your staff’s work and you will reap the benefits of that productivity gain. That’s “Predictive Intelligence.”

Final thoughts?

You know you have tremendous influence with your clients. Until now, accounting software vendors and payroll service providers have used your client relationships to make themselves billions of dollars. Would you like to continue doing that, or would you rather use your client relationships do what is in your, and your clients’, best interest? If you prefer the latter option, then download and read my whitepaper, “Forget Value Billing. Think Value Building.”  It will show you how you can use the cloud to greatly raise your bottom line, better serve your clients and feel the pride of being an accountant. Please visit www.AccountantsWorld.com/value to download the whitepaper.

Do you know someone else who would make a good Spotlight? Contact Christina Camara.

Platt’s Perspective: Classifying Clients – It’s Good For The Top And Bottom Line (And Everything In Between)

By: Michael Platt

Have you ever noticed that after you a buy a new car – let’s say it’s a 2017 silver Mercedes-Benz – you start seeing the same make, model and color every time you look around?

In similar fashion, firm professionals can begin to home in on their ideal clients and recognize them instantly. To help accomplish this, they need to go through two exercises that the majority of firms neglect: Define the firm’s best to worst clients, ranking them A through C or D, then outline a plan to improve their grades so they become better clients.

IPA’s most recent survey data, from more than 540 firms, show that only 30% are formally classifying their clients in this way. The other 70% are missing an opportunity to sharpen their focus, make more money and limit unnecessary headaches.

Mike Platt

Mike Platt

Many firm partners have their own ideas on who their A, B, C and D clients are, but it’s rarely agreed upon firmwide, and lower-level professionals may hold vastly different views on the attributes of a “perfect” client. The more clearly this is defined up front, the easier it is to target that group.

Every firm over the years has collected all kinds of clients – some are ideal fits for the services the firm provides; some were ideal at one time and are now legacy clients; and some are no longer appropriate.

So, how would a firm decide which clients are As and which are Cs or Ds? That’s up to every firm to define, but typically A clients are ones with growth potential, who are cooperative, pay premium fees for premium services, come to you before making major decisions, rely on your advice and refer other clients to the firm.

B clients, for example, may not access a full range of services or actively refer your firm, but they are owners of up-and-coming companies who could likely become A clients someday. C clients may be your 1040 tax return customers, and D clients could be those who are late providing information, argumentative with staff, late paying bills and constantly complaining about fees. Some D clients are unavoidable (think your brother-in-law, or the grandson of your best A client), but all should be reviewed and culled on a regular basis.

I believe so strongly in classifying clients that I suggest identifying them by letter grade in a firmwide database that is accessible to all professionals and reviewed every few years. Obviously, keep this information confidential – no client wants to hear that they’re a C client.

Once clients are classified, the firm should define a plan to move clients up. Can your firm guide tax return clients on ways to streamline operations of their businesses, grow and become more profitable? If so, those B clients may become more reliant on the firm’s expertise and opt to take advantage of more firm services, becoming A clients in short order.

Classifying clients moves the right metrics. When a firm focuses its energy on providing great service to A and B clients, realization goes up, fees go up and profitability goes up. At the same time, clients are fulfilling their dreams for their businesses, and they’re more successful and happier as well.

Classifying clients helps with business development. When you’re out looking for new clients, you don’t want to just grab whatever’s out there. Zero in on the kind of client the firm wants to pursue. That’s because not all revenue dollars are the same. Generating a dollar’s worth of revenue from an A client often costs far less than generating a dollar’s worth of revenue from a C or D client.

Don’t limit your thinking to believe that classifying clients is just a marketing activity. It is, but it’s much more than that. This exercise can focus the firm in a clear, targeted way on key metrics related to profitability, realization, revenue per charge hour and contribute to business development opportunities, growing the top line as well.

One other benefit to consider – once A clients are defined, future A clients are much easier to find, just like those 2017 silver Mercedes-Benzes you’re seeing everywhere.

2017 INSIDE Public Accounting Benchmarking Report Pre-Publication Offer

The 2017 Benchmarking Tools will be available in September.

IPA’s National Benchmarking Report is one of the most thorough, complete and insightful analyses of CPA firms in the U.S. The report is well-respected throughout the profession for being independent and accurate.  Benchmarking is one of the most effective processed firms can do to improve operations, increase profitability and productivity.

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Note: some associations have partnered with IPA to provide some of the benchmarking products to member firms. Please contact our office with any questions.

The Internal Operational Benchmarking Reports

The Firm Administration, Human Resources and Information Technology reports assist firm management uncover trends, areas of policy improvement, operational and procedural issues and to assist firms with planning, budgeting and implementing needed changes to move ahead in best practice style. Click on any one of the images below to find out more, and to view an excerpt from 2016.

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IPA INSIDER: May 2017 News

Listed below are the Top 10 most-read stories on the INSIDE Public Accounting blog for the month of May.

  1. Elliott Davis Decosimo Names New Chief HR Officer
  2. Grant Thornton Adds to Cybersecurity Services
  3. Settlement Reached in Andersen Tax Trademark Dispute in California
  4. The Bonadio Group Manhattan Office Moves, Hires
  5. Mowery & Schoenfeld Announces Newest Partner
  6. Marcum Adds Meyers Harrison & Pia
  7. IPA Vendor Spotlight On … Allan Fisher, Premier Financial Search
  8. LBMC Acquiring Intacct Practice
  9. Withum Adds IT Consulting Firm, Portal Solutions
  10. Gail Rosen Merging into Wilkin & Guttenplan

IPA Vendor Spotlight On … Allan Fisher, Premier Financial Search

Name: Allan Fisher

Allan Fisher

Allan Fisher

Company: Premier Financial Search

Title: President and Founder

Accomplishments:

  • 20 years of recruiting specifically for public accounting firms
  • Works with 25 of the IPA 100 firms, 42 of the IPA 200 firms and 64 of the IPA 300 firms.
  • Placed 1200+ candidates within CPA firms
  • Actively involved in CPAFMA
  • Acted as ‘matchmaker’ on multiple firm mergers

Many accounting firms have their own recruiters on staff, but what extra value can an outside recruiting service bring to the table?

Internal firm recruiters are a key part of the HR and talent acquisition process, and that is why we partner with them to fill their staffing needs. They do an outstanding job of promoting the benefits of their firm, and we do an outstanding job of identifying candidates they might not reach. Our team has created a strong national network. This enables us to target specific candidates by job, geography and industry specialization. We have built our success on relationships, and see this again and again in referrals. We see the big picture, and come at recruiting from a different vantage point. When combined with what CPA firms have in place for staffing, the value we add is tremendous.

What’s the biggest opportunity for CPA firms that Premier Financial Search can help them with?

Two of the biggest challenges facing CPA firms are staffing and succession planning. These are two of our largest areas of focus. As we work solely with public accounting firms, our entire inventory consists of candidates coming from local, regional and national firms. Our candidate interview process is in-depth and allows us to determine a candidate’s ultimate career goal. We can then make ideal matches based on the needs of the hiring firms.

How has the staffing industry changed with the rise of social media, specifically LinkedIn, in your years as an executive recruiter?

Much has changed in the industry since I started recruiting in 1998. LinkedIn has leveled the playing field when it comes to identifying talent. Recruiters and HR professionals alike can easily determine a talent pool at a particular level within a geographic area. Candidates tell me that they receive five to 10 emails via LinkedIn from recruiters and firms per week. This has created a Tinder-like atmosphere in which candidates feel they can be selective, swiping past opportunities until they find their perfect match. Recruiting is, and has always been, about relationships. For us, Monster, Indeed and LinkedIn open the doors to relationships. A positive for us is that LinkedIn allows us to reach more candidates on a national level. Interestingly, 30% of the candidates we place are relocating from one geographic area to another.

What makes Premier Financial Search different than other staffing companies?

We recruit and place nationally. We have placed candidates from almost every state into Top 100, 200 and 300 firms. We know what differentiates one firm from another. When a candidate considers making a move, their knowledge of firms is often focused on the very recognizable national firms. We assist by educating candidates on many things: the differences among national, regional and local firms; which firms offer industry specialty services; how one firm’s succession plan may be vastly different than another’s; how one firm’s culture compares to others. We know the market. With 20 years of expertise focused on one area, we know the trends, firms to watch, M&A rumors and important details not included on firm websites.

Final thoughts?

Our passion is placement within public accounting. In an overheated market for talent, we provide top candidates, allowing our clients to grow and properly plan for partner succession.

Do you know someone else who would make a good Spotlight? Contact Christina Camara.

IPA INSIDER: April 2017 News

Listed below are the Top 10 most-read stories on the INSIDE Public Accounting blog for the month of April. IPA Logo - with tag line

  1. KPMG Fires Head of U.S. Audit, Others After Improper Warning of Inspection
  2. IPA Spotlight On … Loretta Doon, California Society of CPAs
  3. BDO USA Acquires Hilton Consulting
  4. Elliott Davis Decosimo Admits Ten New Shareholders
  5. Cybersecurity Firm SDGblue Joins Crowe Horwath
  6. Settlement Reached in Andersen Tax Trademark Dispute in California
  7. Grassi & Co. Welcomes COMPASS-Regulatory and Compliance Advisers
  8. Montana Society of CPAs Announces New Executive Director
  9. Sikich Strengthens Employee Benefit Services with Acquisition of Milwaukee-area Firm
  10. Dean Dorton Acquires Metro Medical Solutions

IPA Spotlight On … Jodi Ann Ray, Texas Society of CPAs

Name: Jodi Ann Ray

Jodi Ann Ray

Jodi Ann Ray

Association: Texas Society of CPAs (TSCPA)

Title: Executive Director/CEO

Accomplishments:

  • Took over the top job Jan. 1 from John Sharbaugh, who ended a 17-year run as CEO and now serves as managing director of governmental affairs.
  • Leads one of the nation’s largest state accounting organizations, representing 28,000 CPAs in 20 chapters across the state.
  • Previously served as vice president of membership and volunteer experience with Meeting Professionals International, where she was the responsible for governance and community development, which encompassed membership and more than 90 chapters and clubs in 24 countries.
  • She also served as the CEO for chambers of commerce in Connecticut, North Carolina and Texas, where she oversaw all operations including membership, government affairs, economic development and finance.

Progressive firm leaders are focused on re-imagining their future to ensure they remain relevant to their clients. How does “remaining relevant” play a role in your strategic planning, and what are some examples from the past 12 months of new services/programs/approaches that you have instituted that addresses how the State Society will remain relevant to its members?

The Society is taking a hard look at its strategic plan now, with plans to launch an updated plan to the membership in the fall. We’re looking at our vision for the organization, how it should look five to 10 years from now, and how to inspire our members and future CPAs about the organization and their practice in the field. We’re asking members what keeps them up at night, and which areas the organization should focus on. We’re upgrading our website to help members cut through the clutter to get accurate, timely and relevant information. The society is also very active in advocacy at the federal and state level.

What do you see as the biggest opportunity for the profession?

We are in such a period of change, not simply in our profession but in all industries, and I think the transformation affecting so many companies will impact the role of CPAs. What we consider the core services of CPAs is going to expand and evolve. For example, for some of the larger firms we’ve seen a very clear trend toward more advisory services.How do you see the role of the accountant changing over the next few years?

CPAs will become more of a strategic business advisor in addition to reporting financial performance. In the association world where I come from, the business decision-making models have changed and companies are relying on better, faster data and that’s changing the emphasis on what’s being produced. CPAs will be producing trend information, dashboards and projections to provide information that can be used in new and valuable ways.

Which aspect of technology should firms be paying closer attention to?

We’ve added new programs into our spring lineup of CPE offerings on risk management and cybersecurity. Firms are concerned about ensuring that the transfer of client data is secure and that their liability is adequately addressed.

Innovation and entrepreneurship are big topics in the profession. Can you give me some examples of member firms that have done something innovative and proactive to help clients?

Firms are reinventing themselves and doing it quickly to help their clients think ahead and adapt to coming changes. While the core services won’t go away, they may be delivered differently. The same is true for the Texas Society of CPAs – the services we provide to support our members will evolve and adapt.

Do you know someone else who would make a good Spotlight? Contact Christina Camara.