How Accounting Firms Can Exceed Client Expectations

Kristy Short

Kristy Short

By: Kristy Short

High-caliber status is achieved when you transport the client experience beyond expectations.

The client experience is at the center of every astoundingly successful business. Statistics don’t lie: A recent survey by Gartner revealed that 89% of companies now expect to compete mostly on the basis of customer experience (versus just 36% four years ago). In the exceptionally crowded arena of competitors and overlapping brand promises, client experience has emerged as the most important competitive differentiator. And rest assured that business leaders who dedicate the time and energy required to achieve client experience of a high-caliber status are those who will dominate their market space, win over prospects and secure long-term client loyalty.

With client experience at the heart of a successful business model, simply understanding its place and importance isn’t enough. You have to put in the time to cultivate the ideal client experience and ensure its prominence over time. Reaching the level of “high caliber” requires a balance of education (guidance on how to do it), time and effort (this is a lifelong commitment), and intense motivation (lighting a fire) to enact cultural change.

What does “client experience” really mean?

It’s not just about how well your product performs, whether prospects like your ad campaigns, or if your support staff is polite and responsive. These are all laudable business qualities, of course, but not exhaustive in relation to client experience. Rather, it’s the way you engage with clients and the cumulation of every interaction they have with your firm. This means firms have to start thinking beyond standard good customer service – that is, basic elements such as outstanding products, responsive staff or magnetic communications. These are merely the fundamentals of client experience. High caliber is only reached by going above and beyond for your clients.

Don’t be fooled by a false sense of excellence either. While you may think you’ve cultivated a be-all-end-all client experience, consider the fact that 80% of companies (big and small) believe they deliver superior customer service. Yet, and here’s the rub, only 8% of customers think that these same companies deliver a superior client experience (Gartner 2016). Ouch.

These are powerful, informative stats that should motivate any business to evaluate its existing client experience, and the evaluation process must be comprehensive and analysis of results honest. To get started, firms first need to ask the right questions.

What’s my story?

It all starts with your story!

You are so much more than the products and services you provide. There’s a story there, one that’s engaging and heartfelt – a story that can draw prospects in, make a personal connection, make prospects and clients care about the relationship over the actual services provided, and differentiate your firm from a vast pool of competitors.

Consider how a well-crafted, genuine story can differentiate seemingly equal competitors in the following example.

Northern California’s Napa Valley is known for world-renown, award-winning wines and 400-plus wineries. A slow cruise through Napa brings with it endless rows of grape-heavy vines and hundreds of wineries defined by lush landscapes and elegant facades. From afar, there are no true differentiators among distributors. Why do some draw more new and returning visitors than others? The answer lies in their stories.

At Artesa Vineyards and Winery, for example, patrons receive more than a simple visit. They are invited in to experience “life beyond the label.” Visitors are greeted by orators (not sales people) who weave a vivid, engaging story about the land, the history, the winemakers and the craft. Guests become an active participant in the process – a part of the story itself – creating a personal connection and a powerful bond. Oh, and by the way, guests can also buy a few bottles of wine while they are there. Without the story, the experience begins and ends with an extraordinary product – the same message everyone is putting out.

Because your firm represents so much more than the services you provide, you must take the time to explore your story, define it and ensure that everyone is telling the same genuine tale. This is how you make that personal connection that keeps clients loyal and draws new clients in.

Does your business model support your story?

You can tell all the stories you want, but if your business model doesn’t support your claims, the client experience will suffer.

You set yourself apart from the competition by telling your story of greatness—which may include unparalleled client service, advanced technology, deep accounting expertise and/or a commitment to your community – to name a few. Whatever story you tell, you must deliver on it. A high-caliber experience requires that all the pieces are in place, including:

  • Technology –Your firm should support a cloud-based platform that delivers 24/7 access for staff and clients. You can’t begin to go beyond client expectations if you are not set up to operate at peak efficiency.
  • Staff – Do you have the best of the best working for you? Your staff is on the front line of the client experience, so ensure you’ve built an all-star team. Also make sure that you have employees in the right position – one that allows them to leverages their unique talents.
  • Training and communications – You have to be dedicated to lifelong learning for your staff. It takes a lot of effort to keep your team at the all-star level. You also have to commit to frequent and clear communication to staff, so everyone is always updated and prepared to provide high-caliber service.

Have you built a culture to support your story?

Your firm culture is the beating heart of the client experience – a direct representation of your business that will either propel you to greatness or sink you like the Titanic. Think about it – when your team is in perfect harmony, not only does your firm run like a well-oiled machine, but your clients benefit from stellar, above-and-beyond service. A superior client experience can never happen within a culture of discord and confusion.

A positive culture doesn’t happen overnight. It requires a dedicated leader – one who leads by example – and can take years to develop. Few have built a culture that equals that of The Ritz Carlton – the reigning champions of the high-caliber client experience. The Ritz Carlton has quite literally written the book on “service beyond expectation.” The following client testimonial speaks volumes:

Seconds into my first paddleboarding excursion in St. Thomas, I lost my balance and my new sunglasses. Later that afternoon a Ritz Carlton staff member approached me, inquiring if I had lost my sunglasses.  I acknowledged the mishap and was handed over a pair of Ray-Bans. They were my “lost-at-sea” sunglasses. I was stunned.

After a staff member overheard that we returned from our outing one pair of shades short, hotel staff did a little snorkeling recon and recovered them. We never mentioned the sunglasses to anyone, and we certainly didn’t expect anyone to look for them. It was beyond unexpected, and as it turns out, that is exactly the point.

Part of the Ritz-Carlton mystique is the Fulfillment of Unexpressed Wishes and Needs, and they are very specific in how to accomplish that objective with the goal of developing such strong emotional engagement between the hotels’ staff and their guests that “a guest will not consider staying anywhere else, if they have an option.” They understand that relationships precede financial results and rely on a robust data set that demonstrates the impact engaged employees and repeat customers have on the bottom line. (R. Estis, 2014).

Now that’s a culture everyone should want to get on board with!

Parting words…

A high-caliber client experience doesn’t come easy. It takes time, dedication and a keen eye to consistently identify areas for improvement and innovative ways to move beyond clients’ expectations to “fulfill unexpressed wishes and needs.” The client experience is an ever-evolving organism – so firms must adapt with the times and the changing needs and expectations of clients. Reaching the level of high-caliber client experience is one thing, staying there is a lifelong commitment.

Kristy Short is chief marketing officer at Rootworks LLC of Bloomington, Ind.

Transparency, Feedback and Mentoring: Improved Communication Goes a Long Way With Young Professionals

By Christina Camara
INSIDE Public Accounting

As the economy has improved over the last few years, the search for the best accounting professionals has heated up with it. Now, it’s safe to say, the profession is immersed in a full-fledged talent shortage, which is worsened by waves of partner retirements and staff departures.

Chris Camara

Chris Camara

Year after year, accounting firm leaders say staffing is a huge concern. According to the most recent AICPA Top Issues survey, the No. 1 issue was retaining qualified staff and No. 2 was finding qualified staff for firms with 21 or more professionals.

Demographic shifts, revealed through more than 540 responses to IPA’s annual Survey and Analysis of Firms this year, show that while the percentage of young people entering the accounting workforce is growing, those with several years of experience is shrinking.

Additional research, conducted by IPA and ConvergenceCoaching, shows that firms can take advantage of easy-to-implement, no-cost (or low-cost) solutions that young people say would greatly improve their work experience. A key theme? Communication.

RTR imageGiven the critical importance of the under-40 age group to the future of the CPA profession, IPA surveyed 723 accounting professionals aged 21 to 40. The full results can be found in “The Road to Retention: Motivators and Drivers for Young Public Accounting Professionals.”

Here are some suggestions gleaned from their comments.

Share Information

When the “Road to Retention” survey respondents were asked to name the most important pieces of information they would like the partner group to share, the top five responses were:

  • More defined career expectations – This was the highest-ranking factor, mentioned by 38% of respondents. Young professionals said they wanted a clear, written explanation of the competencies expected at each level of advancement at the firm, as well as honest feedback on their performance and appreciation for their contribution.
  • An understanding of the firm’s vision and strategy – This response suggests firm leaders may not be clearly communicating their firm’s vision. Young professionals want to know if they’re part of an enterprise that matches their own values.
  • A clear understanding of the path to partnership – Similar to the top response, this answer suggests 21- to 40-year-old professionals don’t want to simply keep their heads down and work until someone notices them. They want to know, up front, what it takes to climb the ladder to firm ownership.
  • Knowledge about the firm’s finances – How does the firm measure success? Is the firm financially healthy? What metrics are used to measure this? Young professionals would greatly appreciate more transparency around firmwide performance numbers. IPA surveyed 134 firms this year on issues specific to firm administration and found that they differ widely on the types of financial information that are shared with staff. IPA’s 2016 Firm Administration Report says that 55% share top-line numbers firmwide, while 36% share utilization figures and just 14% share data on profitability with all staff.
  • Improved communication – Under-40 CPA professionals are looking for clear, consistent and more frequent communication.

Other Communications Issues cover_2016

IPA also recently surveyed 136 firms for its 2016 Human Resources Report and found additional results that back up the concerns of the young professionals surveyed in Road to Retention.

For example, nearly a third of under-40 CPA respondents listed their firm’s mentoring program as an area of weakness. Of all firms that participated in the IPA Human Resources survey, mentoring programs are offered by 80% but only one in 10 rate effectiveness as excellent. In fact, 11% rate it as “fair” or “poor.”

Furthermore, results from both surveys show that firms can be doing a better job at communicating with their staff about their performance.

According to the IPA HR survey, professional staff are reviewed semi-annually in 37% of firms, and annually in 46% of firms. Young professionals told IPA/ConvergenceCoaching that they want feedback much more frequently than what 83% of firms in the HR survey are currently offering. The 20- to 33-year olds most often reported that they want performance feedback monthly; the 34- to 40-year-olds want quarterly feedback.

Last, firm leaders should consider yet another communication issue raised by young professionals: They say firm leaders and managers are not doing a good job of involving them in decisions, with clients or internally, that affect them. It was the No. 1 overall firm weakness cited.

Improving communication will certainly be time-consuming and will take a concerted effort, but the data shows the payoff should be well worth the investment. “The Road to Retention” offers a recommendation: Form an advisory board made up of under-40 professionals. Give the group the task of studying changes they’d like to see in the firm and recommending how to implement them. The next part is critical: Listen to their ideas and put them into practice if they make sense. The future of your firm depends upon it.

Christina Camara is managing editor of the monthly INSIDE Public Accounting newsletter.

34- to 40-year-old CPA Professionals Tell Firm Leaders What They Need

By Christina Camara
INSIDE Public Accounting

As firms help their young professional staff gain expertise and knowledge about the profession, our research shows that they may be looking for the door instead of the next step up the ladder.

Chris Camara

Chris Camara

Recruiting college graduates is a challenge unto itself, but once these young people are hired, its critical to keep them happy, involved, rewarded and able to progress in a career they consider meaningful and impactful.

In a survey of 723 young CPA firm professionals, aged 21-40, INSIDE Public Accounting and ConvergenceCoaching found some troublesome signals that young professionals are becoming less enamored with the profession as they age. While the majority surveyed indicated that they feel valued and appreciated, the numbers dip with age and experience. The results can be found in the research study, “The Road to Retention: Motivators and Drivers for Young Public Accounting Professionals.”

Respondents were broken into two groups: Millennials aged 21-33 and Generation Xers aged 34-40. Consider these differences between the two age groups:

  • Millennials felt more positive about firm leaders. When 21- to 33-year-olds were asked to list the top attributes of their current firms, “I respect my firm’s management” was No. 1. The 34- to 40-year-olds ranked respect farther down the list, with “I enjoy the clients I serve” as No. 1.
  • In the Millennials’ list of top five firm attributes, respondents included “I feel valued and appreciated at my firm,” and “My skills are getting better as a result of my firm’s investment in my learning.” Interestingly, these attributes did not make the top five list for Gen-Xers.
  • According to Millennials, the No. 1 firm weakness was involving team members in internal decisions that affect them. Gen-Xers also found the lack of involvement in decision-making to be a concern, but the No. 1 weakness was the need for ”an effective mentoring program for all staff.”

RTR imageAccording to survey respondents, as staff age, they feel less valued and appreciated, lose some respect for firm leaders and don’t believe the firm is investing in their professional development.

The good news is 34- to 40-year-olds enjoy the responsibility of client work and appreciate autonomy they are afforded, survey results show. Three of the top five firm strengths were: “I play an important role in working with clients,” “I enjoy the clients I serve,” and “My firm allows me to work in a way that I believe is most productive.” Also, the majority of the Gen X respondents, 58%, expressed their desire to join the ranks of partner.

With that being said, IPA’s just-launched 2016 National Benchmarking Report, which compiled data from more than 500 participating firms, suggests that while young professionals may desire leadership roles, they’re looking elsewhere to find them.

IPA looked at the percentages of staff at various levels, comparing this year to 2015. Among firms in the IPA 100, the largest firms in the nation, the percentage of professionals with 0 to 2 years of experience grew by 8% of the total. At the same time, the 6- to 8-year staff percentage shrunk by 5.5% of the total share, and staff with 9 or more years’ experience shrunk by 2.5% of the total.

In smaller firms, the demographic shift can also be seen, as the proportion of staff with 6-8 years of experience shrunk there as well, by an average of 7% for firms of $5 million-$15 million.

This information from the 2016 IPA National Benchmarking Report matches with turnover statistics that reflect that experienced staff, of three years or more, are leaving public accounting.

How can the profession keep experienced staff in public accounting? The Road to Retention provides some ideas:

  • Explain The Impact of Their Contribution – Help staff make the connection between their day-to-day work and the overall goals of the firm and the goals of the clients the firm serves. Provide insight into how their piece of the puzzle adds value not only to the firm but to clients, co-workers and the profession, and show appreciation for their contribution.
  • Share Big-Picture Information – The Road to Retention Report shows that young staff want open and frequent communication, including transparency on firm expectations of staff, the path to partnership, partner success stories, the firm’s overall vision and strategy for growth, and key firm metrics that matter to a professional in the accounting field. They are the future leaders, share early and trust that they will engage. One tool for discussing firm metrics is INSIDE Public Accounting’s National Benchmarking Report, which allows firms to compare their performance data against similar-sized firms around the country as well as IPA Best of the Best firms.
  • Continue to Invest in Professional Development and Expand Offerings – IPA’s Best of the Best Firms, those with excellent financial and operational performance, pour more time, money and effort into high-quality training programs for staff of ALL levels. More than 80% of the 2016 Best of the Best firms have a formal mentoring program, a need identified by Gen-Xers.
  • Improve Communications About Performance – Generation Xers need leaders to be intentional about offering thoughtful input on their work performance, not just the “great job” feedback. Generation Xers would like to receive feedback quarterly, the survey indicated, while Millennials want monthly feedback.
  • Make an Effort to Keep Work/Life Balance Issues Top of Mind – Remember that it is the No. 1 factor that determines whether young professionals will stay in public accounting, according to Road to Retention. Continue thinking of new ways to increase efficiency and flexibility so they can work in the ways they feel are most productive. Trust your staff, and ask young professionals to suggest ways to possibly make smaller changes along the way.

Learn more about the Road to Retention report.

Christina Camara is managing editor of the monthly INSIDE Public Accounting newsletter.

What You Think About Your Younger Staff May Not Be True

By Christina Camara

Chris Camara

Chris Camara

INSIDE Public Accounting

The stereotypes aren’t pretty. Younger staff may view older professionals as old-school technological dinosaurs who aren’t creative or innovative. Accounting firm owners may believe they supervise a bunch of entitled, ungrateful complainers who don’t care about their work.

Millennials (21-33 years old) and Generation X-ers (34-40 years old) took exception to these broad generalizations in a survey of 723  young CPA professionals conducted last year by INSIDE Public Accounting and ConvergenceCoaching. These professionals did more than object, however. They also made numerous constructive suggestions on how the different generations can work better together.

Young professionals are a key demographic for accounting firm leaders, with projections that by 2020, Millennials will account for half of the workforce. Turnover is high, more than 20% at many larger firms, and it’s expensive. Young professionals tell INSIDE Public Accounting that firm leaders need to find ways to offer rewarding work, a plan for professional development, 21st century tools and a flexible work environment or face seeing their pool of future talent dry up.

Here’s what we learned from young professionals in analyzing the survey results, which led to The Road to Retention report.

What are the Top Misconceptions?

The mistaken impression that young professionals are “lazy” came up over and over again, more than 150 times in fact, when survey respondents were asked, “What’s the biggest misconception about young professionals?” More than a third of respondents, 36%, said firm leaders are mistaken if they think young professionals are not willing to put in the effort needed. More than 120 times, survey respondents said they’re unfairly viewed as uncaring and unwilling to work hard. They contend they’re just as committed, they just want to work differently.

Some of their (anonymous) comments:

  • “In order to make public accounting a career, a flexible schedule is key.”
  • “I do not think that flexibility is a direct reflection of whether or not someone works hard. I believe that by allowing more flexibility, a firm can help their staff achieve more and have a greater work output since they are able to work on their own time.”
  • “Professionals my age want work to fit into their lives not work to be their life.”
  • “We grew up with parents who both worked and had to miss time with their kids, or with a parent who was never home due to work, and to us it is not an ideal lifestyle.”

These professionals tell us that they do care deeply about work, but they care deeply about their families and outside activities deeply as well. Work-life balance, in fact, was the most important factor determining whether this group of emerging leaders will stay in public accounting, the survey said. When asked to comment on the needs of young professionals, Dave Finklang, a manager of tax services at Anders CPAs + Advisors of St. Louis  noted: “Just because a younger associate doesn’t want to work 2,800+ hours a year to get ahead like senior partners did, it doesn’t mean they don’t care.”

Ways For Different Generations to Work Together Better

The survey respondents also offered constructive feedback on how to overcome some of these obstacles. Firms should encourage openness, frequent communication, knowledge sharing and team work in an atmosphere that respects differences and “rewards efficiency over time put in,” as one respondent put it.

Here is a sampling of  responses to the survey question,If you could suggest ONE WAY to help the generations work together more effectively, what would it be?”mergers3

  • “If management preaches work-life balance and flexible working, don’t reprimand employees if they are not sitting at their desks from 8 a.m. to 5 p.m., five days a week.”
  • “Have mature partners work from home for a week and young staff work from the office 70 hours a week to see the difference.”
  • “[They] simply need to learn new tricks. Paper is ancient. Digital is the future.”
  • “The older generation needs to provide clear advancement path with benchmarks that can be measured, not nebulous concepts.”
  • “I would suggest creating outcome-based accountability measures to focus on results rather than core hours.”

Flipping the Conversation

Consider this: Perhaps young people are changing jobs because the workplace culture resists change, not because they aren’t loyal. “We are likely to stay at a firm if the culture embraces changes in technology and flexibility,” says Kim Hardy, senior audit manager at Ridgeland, Miss.-based Matthews, Cutrer & Lindsay who was also asked to comment on young professional needs. And perhaps instead of viewing young professionals as impatient, maybe they’re driven, committed and eager to grow.

Another respondent suggests that we search for understanding. “If we can understand how one another thinks, we can alter our form of communication and work style to work together more effectively.”

The Road to Retention offers a clear message to firm leaders. Listen to and seek to understand your young professionals. They have great ideas that can foster teamwork, loyalty and a strong culture that embraces all generations.

Order the entire report today.

Christina Camara is managing editor of the monthly INSIDE Public Accounting newsletter.

Consultant Releases New Edition of ‘Quantum of Paperless’


Roman Kepczyk

Roman Kepczyk, director of consulting for Xcentric, has released a 2016 update of his book, Quantum of Paperless: Partner’s Guide to Accounting Firm Optimization.

In the seventh edition of the book, Kepczyk includes 2016 IT survey results from the CPA Firm Management Association (CPAFMA). The survey provides actionable information on hardware, software, staffing and IT trends and allows accounting firm leaders to compare data with their peers. In addition, the 2015 Benchmarking Paperless Best Practices survey information is included.

Quantum Paperless discusses how every accounting firm is unique yet similar. Firms are unique in the production processes they have developed over time to service clients, produce tax returns, complete audits, enter time and produce billing. However, the transition from traditional manual processes to today’s digital solutions is remarkably similar and it is primarily a matter of identifying where the firm is today and implementing the next proven process that firm personnel are sufficiently capable and willing to adopt.

This guide is broken into 32 mission-critical quantum leaps where your firm production can be optimized. In each section, proven solutions that accounting firms are successfully implementing and using today is listed.

The book answers tough tech questions firms face:

  • Multiple monitors – beyond 3?
  • The Cloud?
  • Hardware selection and replacement?
  • Document management?
  • Managing and retaining data?
  • Digital tax workflow systems?
  • Audit field equipment?
  • Delivering client reports digitally?
  • Client portals?
  • Security issues?
  • Remote access technology?

Kepzyk helps firms throughout North America effectively use information technology by implementing digital best practices. He has spent the past 17 years consulting with CPA firms.

Purchase Quantum of Paperless: Partner’s Guide to Accounting Firm Optimization

Financial Fraud – Definition, Detection and Prevention

By: Yigal Rechtman, forensic principal, Grassi & Co.

Yigal Rechtman

Yigal Rechtman

In today’s complex economy, fraud schemes are growing more sophisticated, and the costs to both avoid and repair the damage higher. With cloud technology and weak cybersecurity threatening every business worldwide, the white-collar criminal of the future will be more armed and ready to fire than ever before. In 2014, roughly 40 million people in the U.S. were affected by identity theft and cybercrime alone is already costing the U.S. economy as much as $400 billion a year and as much as $1 trillion globally, according to a study released in 2014 by McAfee and the Center for Strategic and International Studies

The cost of financial reporting fraud (“management fraud”) costs about $1 million per incident, while occupational fraud costs roughly $150 to $200,000 per incident. Losses due to fraud cost an average of 5% of gross profit and take around 24 to 36 months to discover—usually via a tip (40%), by accident (20%) or during an audit (10%).

So what is fraud and why do people commit it?

Fraud is the intentional deceit of a material fact causing damage to its victims and benefiting the perpetrators. Fraud is generally classified as: occupational fraud, financial statement fraud and corruption—usually by an official. The more dissatisfied an employee, the more likely he or she will engage in fraud. There is a triangle theory of fraud by famed criminologist Donald Cressey to describe why people commit fraud: a person under pressure, due to a financial problem, will find an opportunity, a way in which to use his position to solve his problem, and then will rationalize, justify, the crime in order to make it acceptable. Most fraudsters are first-time offenders with no criminal past and do not see themselves as criminals; rather, they see themselves as ordinary, honest people who are just in a bad set of circumstances.

How can fraud be detected?

When there is a predication (i.e. a tip) of fraud, fraud examiners typically start with top-level analysis, looking for outliers in the results (excessive voids, missing documents, excessive credit memos, increased reconciling items, adjustments to receivables or payables, duplicate payments and ghost employees are just some examples.) Top-level analysis is the comparison of plausible relationships between balances and noting any unexpected results.

How can fraud be prevented?WP-Scam-Alert-red-black-white-sign

The best defense against financial fraud, especially financial report fraud and occupational fraud, is through the development of strong internal controls.

  • Segregation of duties: having more than one person performing or completing a task is a deterrent as the work of one individual is either independent of, or serves to check on, the work of another.
    • Custody or monitoring of assets
    • Authorization or approval of related transactions affecting those assets
    • Recording or reporting of related transactions
  • Reconciliations: these should be completed by an independent person who doesn’t also share bookkeeping responsibilities or check signing responsibilities.
    • Examine canceled checks—authorized signatures, appropriate endorsements, recognizable vendors, check sequence.
  • Physical security: access logs, video cameras, keyed entries
  • Pressure: perform periodic credit reviews and add a right to audit clause to the contracts. This not only gives the party the right to audit, it also sends the right message.
  • Provide training to your employees regarding the rationalization factor of committing fraud.

The most effective way to prevent fraud is to understand and fix internal controls, however, the bottom line to your bottom line is this: even the best systems of internal control cannot provide absolute safeguards against irregular activities.

For more information on how you can help fight fraud, contact Yigal Rechtman of Grassi & Co. at

Advice from a Hiring Manager to Young Professionals

By: Jeff Green

As a manager who frequently hires college-aged people, may I kindly plead with those of you who are responsible for bearing them (there was initially a typo that said beating and I almost left it) to make sure they understand the following? For better or worse, I am writing this based off of actual experiences that I have had over the past couple of weeks.

  1. In the real world, not everyone gets a trophy. If everyone gets a trophy, no one stands out. If you do not stand out, you are not memorable. Be weird, be quirky, be competitive, be something that is going to make me remember you for a good reason. Almost every college student I interview states “drive” as the thing that makes them stand out amongst their competition, but few can tell me where they are driving to. They are basically just wasting gas, and that is bad for the environment. For those who know the answer and can back it up with effort, you will instantly stand out to me.
  2. It is not your gifts and talents that make you special, you will be defined by how you use them.
  3. Almost every person I interview has a college degree. That alone does not give you a leg up, at least not here. Community service (though not of the court-mandated kind) will make you stick out and is one of my favorite things to see on a resume. So is military experience, foreign languages, musical proficiency, being an Eagle Scout or any other various activities that show me your ability to dedicate yourself to something for a sustained amount of time. This is especially true if your work experience to date is limited. It shows character, and that is not something that can always be determined by a college diploma. A degree is by no means a bad thing and there are companies out there who will require it, but as I mentioned before, your unique attributes may be the difference in whether or not you are remembered once you leave. (BIG Disclaimer – I am speaking from my perspective here, this doesn’t mean every hiring manager feels this way. Don’t go home and tell your parents you are quitting college because I said you should. I’m just saying your diploma may get you in the door, but how you represent yourself will likely play a big part in whether or not you get the job.)
  4. Work ethic is everything. Feel free to come in with expectations regarding what is in it for you and, if you are inclined, turn down job offers until you find the exact culture you are looking for. When you find it, you had better work your tail off because there is probably a line of people waiting to take your place. A positive, fun work culture is not something you are entitled to for simply showing up, it is a return for the dedication you are showing. Also, it is rare. If you have it, don’t fail to appreciate it. And if you don’t find it, still work your tail off. That company is writing checks that provide for you and your family. If they aren’t treating you well, don’t stop working hard, just find something better. Don’t ever put yourself in a position where you might leave a company based off of their decision instead of your own.
  5. Find something within what you do to make you feel good about it. If you don’t find value in something that you are spending the majority of your waking hours doing, chances are you are going to be a miserable person. If you are a miserable person, I don’t need or want you on my team.
  6. Speaking of team, if you are on one then you need to be a part of it or you need to leave. Being on a team means carrying extra weight when another team member is sick, hurting, struggling, or dying. It also means they will do the same for you. It definitely means pulling your own weight when there is no reason for you not to do so. If you aren’t operating with this mentality, chances are you are a mediocre performer at best. At worst, someone is carrying your weight while you slow the whole team down. Again, if this is the case, then you will not exist in this dojo (nor will my “fear” in showing you the door).
  7. I don’t care if you are going in to a job interview knowing that there is a relaxed dress code, you had better be dressed up for the interview or I will send you out the door before you get your name out. Weak handshake? I will work with it. Failure to make eye contact? We will find you some confidence. No resume? I’ll help you draft one. But you have to get the job before any of that can happen, so you had better make as good of an impression as possible in the interview. Dress for the job you want…
  8. Another point about interviews…someone is taking a lot of time out of their day to meet with you. Do them a favor (and yourself one for that matter) and make sure you learn as much as you can about the company before you arrive. Don’t blindly send out resumes and then fail to prepare and take notes before you go and meet the person who may become your future boss. If they have a website, look at the dang thing. If they don’t have a website, all the more reason why you need to go in with a list of questions to figure out what you are actually interviewing for. A little voice inside my head is going to try to convince me that I should make you feel about 3 inches tall if you waste my time. Don’t.
  9. I do not expect perfection. I demand it. Just kidding, but seriously, you need to strive for it. You also need to acknowledge that you are currently far from it. A big part of that means asking questions when you do not know the answer so that you can become an expert. If you are making assumptions, you are a liability to your team and your company. Diamonds are not ready to be mounted in a ring at the moment they are found, they must be cut and polished over time until they are at a point that flaws can only be seen under magnification. Make sure you ask questions so that your knowledge, and therefore value, is constantly being cut and polished by those who know more than you. I regret to inform you that on your first day, that will literally be everyone in the office. The faster you can change that, the faster you establish yourself as a key player.
  10. Others should want to share in your success. If they don’t, you need to ask yourself if that is because of their faults, or your own. No one is going to be waiting to cheer you on at the finish line if you tripped every other runner to get there. Unless you trip the guy that tripped everyone else, then I will high five you. That may sound like a joke, it isn’t. Well, maybe a little. But seriously, if someone is stepping on others to advance themselves, call them out or you are simply an enabler and not much better than they are. This is not your middle school friend group, this is business.
  11. For your expectations, I would advise you to find a supervisor who is legitimately interested in helping you grow and develop your professional skill set. If you are coming out of college with no relevant work experience, then there are very few job opportunities that are beneath you. That said, you should try to find the one that will help you develop a solid business acumen. Despite what you think, you do not know everything coming out of college and you will make mistakes. Find someone who will help you challenge yourself and make sure you take constructive criticism as a compliment. Most supervisors suck at giving it (apparently, so do a lot of parents), so if someone is taking the time to do so then that means they probably care about seeing you become the best employee and person you are capable of being. And I will say the same thing here that I said about culture. When you find this person, do not take advantage of them. They could end up being a lifelong mentor for you.

Innovation: How Great Firms Excel

By Gary Boomer, Boomer Consulting

Gary Boomer

Gary Boomer

Accounting firms generally are not who you think of when you mention “innovation,” yet many firms excel at innovation and there is a pattern to their success. Innovation is directly linked to growth and not an epiphany like many think; but rather a process that combines hindsight, vision and insight. The accounting profession is going through significant changes and I am often told by firm leaders they just don’t have the next generation of leaders in their firms.

In many cases there is validity to their statement and a better understanding of innovation and how firms get into this situation can help firms take the necessary steps to balance between “discovery” and “delivery” skills. Discovery skills focus on new opportunities, trends and creativity while delivery focuses on execution. You need both, but the tendency is to focus on delivery.

Mature and typically declining firms are dominated by people with excellent delivery skills, but often lack the proper balance of discovery skills. Typically, one or more firm founders were entrepreneurial and tended to hire people for their delivery skills and not their discovery skills. As a result, many partners and managers don’t know how to think about discovery or give enough value to the importance of innovation.

Accounting programs teach people delivery skills while most experiences and on-the-job training also focuses on delivery and execution. In fact, many of the discovery skills are viewed as nonproductive – more about that later. I believe innovation or lack thereof can explain some of the frustration and what firms must do in order to develop the next generation of innovative leaders.

Directional Versus Intersectional

Let’s look at two different types of innovation and then how the most successful firms are modernizing their practices to meet the needs and wants of their clients. Accounting majors are taught the rules and regulations of the profession in school and throughout their careers. This is not a negative, but rather a fact as their perception is often different than those with different training and aptitudes. Upon graduation, most accountants going into public practice start in audit and/or tax. This has been the traditional approach and is the primary reason most innovation in firms is directional innovation.

Directional innovation tends to improve a service in fairly predictable steps with a well-defined dimension or goal. The majority of innovation is directional and is accomplished through increasing levels of expertise and specialization (delivery skills). This is a low-risk approach and one with which many CPAs are comfortable. There is nothing wrong with directional innovation, yet it is limiting due to the fact most of the participants are looking at the problem from the same perspective.

Darwin John, former CIO at the FBI, once said, “If two of you have the same opinion, then we don’t need one of you.” This may be a bit extreme, but the point is that for real innovation (discovery) to occur it requires multiple perspectives. This is often called intersectional innovation, where multiple disciplines meet in the attempt to solve a problem or improve a solution. From my experience in the CPA profession, two areas within firms that have been responsible for innovation over the past 20 years are firm administration and technology. Leaders in these areas have been attempting to bring the silos together and improve performance through improved communications, efficiency and effectiveness.

One step in entrepreneurial innovation and the one leading firms are focusing on is intersectional or client-centric innovation. It not only involves the client, but his multidiscipline advisors. This can be difficult due to egos and personalities, but the CPA is the most trusted business advisor and should take his or her role seriously by acting as the quarterback when it comes to innovation and improved client services.

While many CPAs were trained to be rugged individualists (with an intense focus on delivery) and solve the clients’ problems on their own or with a small team, that approach no longer meets the needs of a majority of clients today.

Services Commoditized

Today, clients are looking for faster, better, cheaper and easier solutions forcing firms to be innovative and sensitive to clients’ wants and needs. The capturing of transactions is becoming a commodity with new technology and the ability to aggregate and integrate information via cloud-based solutions. In the past, tax return preparation has involved a significant amount of time (fee) in aggregating data while technology has automated the calculation and processing of the return. In other words, the CPA is now caught in a situation where the services they are offering are diminishing in value (commoditization). Part of this is due to technological innovation and part is due to the pricing strategies used by the majority of firms (hours times dollars, labor theory of value).

We are living in a connected world and someone is making those connections. As the trusted business advisor it should be you, the CPA, and your firm. The people making these connections tend to be professionals who excelled in one field, but learned from others. This describes many CPAs and why they are the most trusted business advisor. Formal education increases the probability of attaining creative success to a point and then actually reduces the odds. A key to prolonged success throughout one’s career is lifelong learning and multiple experiences. It makes sense to spend time on a variety of projects if you wish to develop fresh and groundbreaking ideas. The value comes from being able to spot trends and then integrate what you already know. This requires curiosity and an interest in a variety of things. Innovators don’t produce because they are successful, but they are successful because they produce.

Grouping Innovation

Diversity promotes innovation while too much expertise can create barriers to innovation. Innovation requires a balance. More good ideas come when working in a group than when working independently. The big question becomes: What can and should firms do to promote innovation at the intersection? As I said earlier in the article, innovation occurs with vision, hindsight and insight. By looking at the current generation of great firm leaders we see several characteristics that allowed them to be innovative. Let’s look at a list of the most important discovery characteristics.

  1. The ability to connect and associate different perspectives (clients, multiple advisors, trends, technology and etc.)
  2. The ability to question the status quo.
  3. The ability to hold self and others accountable.
  4. The willingness to participate in “safe haven” meetings with peer leaders.
  5. The ability to manage, not avoid risk. The quantity of new ideas improves the quality. Create the environment to promote, not stifle, innovation.

This list may not seem important to those who focus only on the delivery side. Firms must be cautious not to swing the pendulum too far toward the delivery or discovery skills. Both skills are required, important and cannot be ignored. Success today requires a team. The team should involve younger members who are capable and expected to challenge the status quo or strategy, which has often been developed and implemented by senior leadership.

The fact is most large organizations generally fail at disruptive innovation because top management has been selected for their delivery skills. While it is the role of the managing partner or CEO to lead the innovation, it is an extremely difficult assignment. Delivery executives do not like having the strategy constantly challenged, nor do they appreciate change. Does your firm reward and promote discovery skills? If the answer is no, you have your answer as to why you don’t have the innovative leaders for the future. Now is the time to identify and develop leaders with the skills and willingness to focus on intersectional innovation. The future success of your firm depends upon innovation.

An Innovation Checklist

Here are five areas where innovation will produce significant results. Granted they may not fit every firm, but most firms will find three or more of these innovative ideas profitable.

  1. Billing and collection policies – Use technology to improve cash flow (ACH payments and credit cards). This requires different thinking and change management. Too many firms are allowing clients to treat them as interest free or “cheap” banks. You can turn this around with improved engagement letters that specify payment terms leveraging monthly bank drafts.
  2. Tax return preparations processes – Avoid loops and focus on one-way workflow. There are better ways to train than sending work back to the preparer. You can use technology to grade performance and report errors. Current workflow software has its roots with outsourcing companies. If Federal Express can track packages electronically, firms should be able to track work in an efficient manner reducing cycle time.
  3. Client accounting in the cloud – Firms can provide transactional as well as value-added services such as bill payment, payroll, controller, human resources, IT and CFO-related services on a monthly basis. Private labeled software that can be centrally updated and supported will allow firms to take back control of accounting. It will also allow your firm to become hardware agnostic. It works the same on Mac as on a Windows-based PC via a browser.
  4. Use portals to aggregate client data for auditing and accounting as well as tax return preparation. Avoid false starts and wasted time. Portals provide security, are inexpensive and clients like them. Most of the resistance I see is within the firm.
  5. Conduct client focus groups with marketing, tax and technology expertise present. This will provide innovation at the intersection from multiple perspectives. Listen to the client and provide the services they want. Utilize firm leaders with discovery skills.

Innovation and Leadership

Innovation is part of a firm’s culture and DNA. It requires leadership and the willingness to manage risk. Not every idea is a great idea, but the quantity of ideas determines quality. Successful firms balance discovery and delivery skills. Does your firm have the discovery skills necessary to meet your clients’ demands in a rapidly changing world? Provide your people with the time and resources to innovate. Based upon recent studies, most firms are less than 50% chargeable. What better use of the non-chargeable time than innovation, training and new business development?

View the original article.

Gary Boomer is the president of Boomer Consulting, in Manhattan, Kan.

From Billable Hours to Value Pricing

Richard Goldstein

Richard Goldstein

By Richard Goldstein, partner at Buchbinder Tunick & Company

Many industry consultants are urging PR firms to dump billable hours and replace it with a fixed-pricing model, or even value pricing. For some reason, billable hours seem to be set in stone in many service organizations, including PR agencies.

The beginning of billable hours begins with the initial proposal. By this I mean a price is determined, usually based on hours to complete the project. Staff is given budgets to complete a project and record their time in a time-keeping system. At the end of the project, management has a profit or loss based on billable hours. More frequently than not, the question asked is, “How can this have taken that much time?” The question translates into a realization write-off and overall dissatisfaction from the account supervisor and the team members!

Some history

So what is wrong with the billable hour? The billable hour was never meant to be a pricing method. It was originally intended to be a tool to allow a service organization to measure the profitability of an engagement, not a means to price it. It is a cost accounting tool!

Ask a professional of any profession to eliminate his or her time sheet. Staff will chuck it in an instant. Management would be concerned that they would not know whether or not they made money on an individual engagement. This is a valid point but wrong! The concept of using a standard billing rate is not cost accounting but profit forecasting. By this I mean knowing the desired net income of the firm using a cost plus formula. By the way, a cost plus formula is only as good as the determination of the cost plus formula input. The U.S. Postal Service uses cost plus to determine price. We know how well it does!

Lessons from the accounting professionGrowth Dollar Sign

Many CPA firms are still using billable hours internally to help calculate a fixed monthly rate for some of its clients. However, other firms are completely discarding the notion of an hourly metric and instead use “value pricing” to determine prices based on the value of the service to the client. It is interesting that based on accounting firm surveys, the majority of CPA firms still use the billable hour. Those that say they use value pricing are really just using another form of the billable hour according to Ron Baker, a well-known value pricing consultant.

What’s wrong with using billable hours?

According to Baker, the billable hour relies on practitioner’s input, namely time, rather than the output, results. The value of the results should determine the cost of the service, not the time it takes to achieve them. Otherwise, firms can find their revenue stream severely limited. (There are only so many hours a person can work in a day.) Also, think about this — how much time and energy does it take to track time, analyze the result and labor over what went wrong! The time is better spent on results for clients!


Firms are hesitant to move away from the billable hour, because firm management still needs to track time to determine their costs and gauge which services produce the best margin. (In my view even this is not done properly.) Baker disagrees with this notion, arguing instead that other methods such as price-led costing, project management, key predicative indicators and after-action reviews are better suited to determining and managing costs than time sheets.

If your client demands hourly billing

There are many clients that want to see all the detail behind the bill, including how you determined the billable rate, etc. According to Baker, some buyers of your expertise are so used to buying services based on time and rate, they demand to know this. I have been asked many times to provide the firm’s billing rates in the proposal. It is also true that sometimes a client/customer just wants to buy your time (perhaps to ask a numerous questions according to Baker), and the only benchmark of value in that instance is the time spent. This is not the type of client you want to deal with, since the client has no idea of the value you bring, or if he/she does, is not willing to pay for it. After all, you spent a lifetime learning your craft, why should you give $10,000 of value to a customer in a one-hour meeting? Better yet, why should you provide this value in the proposal?

Determining profitability

If you eliminate time sheets, how will you know if you are profitable? It is simple: income statement management. Look at the cost of labor as a percentage of gross revenue. This is a different mindset from poring over hourly reports. Not comfortable with this? Keep your time sheets and make it a true cost accounting system, rather than a pricing model.

I would be remiss if I did not offer the advantages and disadvantages of hourly billing so here are just a few:

Some advantages: It’s easy and efficient; it can be a cost accounting tool; and it transfers risk to the client if the engagement goes over budget.

Disadvantages: Focuses on hours not value; places risk on the client; fosters a production line, not an entrepreneurial spirit; creates a subsidy system where some clients are overcharged and others are undercharged in order to meet hourly quotas; transmits no useful information other than identifying rainmakers, managers and technicians, and useful information is found in client service, attitude, client retention ability, profitability and collection, ability to delegate, monitoring skills, etc.; focuses on efforts not results; encourages the hoarding of hours to fulfill quotas; penalizes technological advances; rates are set by reverse completion (where you look at the rates of your competition in your market and see where you fit in); creates bureaucracy; does not differentiate a firm; and limits income potential.

Get the picture?

Richard Goldstein is a partner at New York-based Buchbinder Tunick & Company LLP.

TBT Platt’s Perspective: An Open Letter to CPA Firms From Small Businesses Everywhere

Mike Platt - Cropped for IPA INSIDERI was looking through our files the other day and stumbled across a Platt’s Perspective I wrote almost 15 years ago. The sentiments expressed in that Open Letter To CPA Firms still ring true today. As you engage in a busy and successful tax season this year, and go on to strengthen your prospecting muscle in the coming months, take note of this reminder on behalf of small businesses everywhere, and enjoy this #TBT Platt’s Perspective!

In my role, I am in the fortunate position of working with CPA firms and small business owners on a daily basis. As you can imagine, both sides would describe their relationship differently. On behalf of all those business owners who are looking for help, but seem frustrated with how accounting professionals are courting them, I write this letter. Listen up accounting professionals.

Dear Accounting Professional:

Why won’t you make it easy for me to do business with you?

I own a small business and I’d like it to grow bigger. I work 12 hours a day. I need someone who can step in and help me get control of my life again and steer my business in the right direction.

Please understand that I really WANT to do business with you. I’m looking for reasons to say “YES” to you, not “no.” I don’t want to spend my time selecting a CPA. But you’re not making it easy.

  • You sell accounting services every day. I buy accounting services once in a blue moon. Help guide me through the process. Is my business too small for your firm? Do you have the staff to assist me with the day-to-day accounting functions? Tell me what I should be looking for. Tell me how you have helped others like me.
  • I know which questions I want to ask. You know which questions I should be asking. Share them with me.
  • I don’t know what my budget is for your services. That’s because I don’t know what it will take to get me where I want to be. Based on what you know about me, tell me the low, median and high range of what it could cost, and show me what benefits I would derive at each level.
  • My customers buy my product for a fixed price, not my time based on how efficient I am. I can budget and forget my worries with a fixed price from you. Can you accommodate that?
  • I expect you to be technically competent – that’s not really a selling point. I expect you to be ethical and work with integrity. That’s a given.
  • The issue is how you can customize your knowledge to fit my needs, not how can I change my needs to fit what you have to sell.
  • Your firm has been around for 40 years? Congratulations, good for you. What’s important to me is ‘What can you do for my business?’
  • I know my business and my problems are not unique. You’ve seen dozens of companies like mine and know that many of the problems are similar. Share with me how you’ve helped other small business owners get control of their businesses.
  • As a prospect, I know that you really want my business because you are spending hours trying to close the sale. Why is it that when I become a client the billable clock starts ticking immediately?
  • I really do understand that in your business, you may not be the one doing the work. That’s OK. Then let me talk to the person who WILL be doing the work so I can feel good about them.
  • I desperately want to end my search for a CPA and firm in order to get on with improving my business. Make me feel like you heard and understood what my concerns are so I can feel good about making a decision to hire you.
  • My business is my life, it’s all consuming. Show me that you care about me and my business too. If you really do care, then my search is almost over. If you really don’t care, respect my time enough to diplomatically point me elsewhere.
  • And by the way, I know it’s tax season. I know you’re busy. I know you have just a couple of weeks left of working 60+ hours a week. But I don’t want to hear about it. I do that 50 weeks a year.

Keep in mind, I’m looking for reasons to say “YES,” not “NO,” but you don’t make it easy. Honor your promises, do what you say you’re going to do, show me that you understand, and above all else show me that you care. It’s not that hard. Amazingly most of your competitors aren’t doing it, so a little effort on your part will go a long way and will really make you stand out in my mind.

Make it easy for me to do business with you, and this can be the start of a beautiful relationship.


Most Small Business Owners Across America