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

Big 4 Aggressively Recruiting for Finance

As growth in traditional audit and tax work begins to plateau, the Big 4 are turning to investment banking advisory and management consulting work, according to, which publishes articles about business school and MBA trends.

“Deloitte, EY, PwC and KPMG are all experiencing growth and actively recruiting our MBA students,” Larry Verbiest, associate director at Georgetown McDonough’s MBA Career Center, told Business Because. “The number of offers has been on an upward trajectory the last few years and we expect that trend to continue this coming year.”

A mergers and acquisition boom is fueling the hiring trend, says Paul Schoonenberg, head of MBA careers at Aston Business School. “As M&A activity has been very active over the last 12 months, the Big 4 firms have been expanding their teams,” he told Business Because.

Deloitte, KPMG and PwC all recently recruited executives from BNP Paribas, Deutsche Bank, and Rothschild respectively to lead the growth of their investment banking advisory practices.

Revenue outside of tax and audit already represents 20-30% of group revenue, but they are rebuilding consulting practices, with growth in those practices outpacing the growth of traditional management consultancies, according to analysts at Source Information Services.

Signs of the emphasis on more lucrative consultancy work, can be seen in the following consolidations: Deloitte acquired boutique strategy house Monitor Group; and PwC agreed to buy Booz and Company, a mid-tier management consulting firm now branded as Strategy&. “There has certainly been a lot of growth and M&A activity,” says Stephen Pidgeon at the Tuck School of Business.

Report: Companies Heeding Calls for Greater Transparency

Large U.S. companies are answering demands for greater openness by voluntarily sharing more information in the audit process, according to a new report by EY’s Center for Board Matters.

Over the last four years, companies have increased their voluntary audit committee-related disclosures, the report says.

In reviewing 2015 proxy statements of Fortune 100 companies, EY’s Center for Board Matters says firms are exceeding the minimum disclosure requirements. Under the Sarbanes-Oxley Act of 2002, audit committees took on a much larger role in oversight of auditors, but the law didn’t require them to disclose much about their efforts.

According to a article, the report contends that “more companies are disclosing how they oversee external auditors, with 71% specifying that the audit committee is responsible for the appointment, compensation and oversight of the auditor, compared with 41% in 2012 and 65% in 2014.”

Additionally, “Sixty-one percent of companies disclosed that the audit committee was involved in the selection of the audit firm’s lead engagement partner — something no company did in 2012.”

The firm says, “Initiatives by regulators, investors, corporate governance leaders, and other stakeholders have encouraged these disclosures by raising awareness of the role of audit committees and noting the benefits of greater transparency such as increased investor confidence.”

The SEC is seeking public comment on current audit committee reporting requirements. “This and other actions by policymakers in 2015 likely will amplify the discussion — and affect the evolution — of the audit-related disclosure landscape in the coming years,” EY predicted.

How Smaller Accounting Firms Can Excel In Today’s Hyper-Competitive Environment

By: Russ Alan Prince, Forbes Contributor

Generally speaking, smaller firms need to add value-added advisory capabilities and do a good job of communicating their expertise to targeted audiences. Doing so will enable them to remain competitive and excel in an increasingly difficult marketplace.

The accounting industry is comprised of a number of colossuses, many mid-tier firms and thousands of small firms. In a bustling economy – think pre-2008 – most smaller firms were able to do quite well. At that time, compliance services were in high demand, and it was relatively easy to cultivate new clients. Those days are long gone.

According to Joe Tarasco, CEO of Accountants Advisory Group, “One of the keys to success for small accounting firms is being able to provide integrated solutions. While continuing to deliver compliance services, small firms need to develop and highlight value-added advisory capabilities. They have to use these advisory capabilities to differentiate themselves. Many of the larger firms are growing because of their advisory services, and this approach can be duplicated by smaller firms.”

At the same time, smaller firms would usually be well served by identifying and focusing on certain niches and specialties. For example, one of the biggest growth opportunities for smaller firms is the family office practice. “By bundling a variety of capabilities often including tax planning, compliance and bill paying, the accountant becomes a trusted advisor to high-net worth clients,” says Tarasco. “What’s more is that well managed family office practices can readily generate margins reaching 75%. It is unquestionably one of the most lucrative types of practices for an accounting firm. It also can be a very effective way to generate business for the other practices in the firm.”

Presently, smaller firms must become disciplined, agile and business development oriented. They have to develop high margin value-added advisory capabilities such as family office practices. Very importantly, they must communicate to potential clients and centers of influence the depth, breath and level of their expertise. Failing to do so makes them “hidden talents,” who fall way short of their business potential.

Combining high caliber value-added advisory capabilities with effective outreach – think thought leadership – smaller accounting firms can be extremely successful. Failing to do so can result in a slow demise or – the more common consequence – being adsorbed by larger accounting firms.

AICPA Celebrates 25 Years of Top Technologies for CPAs

By: Susan Pierce

What was technology like 25 years ago? In 1989, when the AICPA conducted its very first Top Technology Initiatives survey (TTI), the most popular technologies discussed were the spreadsheet and, of course, something called the Internet.

It’s 2015; dial-up is a relic and cloud-based alternatives to physical backups are much more common. Today’s technologies thrive on a 24-hour, cloud environment that enables cross-platform collaboration.

The 25th anniversary North American TTI Survey conducted in 2014 expounded on this trend in the profession and broke down the top IT priorities in the United States and Canada, with more than 3,000 CPAs and chartered accountants weighing in on the most pressing issues affecting their delivery of service in firms, and in business and industry.

Here is a list of the top 10 U.S. initiatives ranked by priority. I will elaborate on the top IT concern below.

  1. Securing the IT environment
  2. Managing and retaining data
  3. Ensuring privacy
  4. Managing IT risks and compliance
  5. Preventing and responding to computer fraud
  6. Enabling decision support and analytics
  7. Managing system implementation
  8. Governing and managing IT investment/spending
  9. Managing vendors and service providers
  10. Leveraging emerging technologies

Securing the IT Environment

Accounting professionals are confident they are able to secure their traditional IT systems, yet the majority feel they don’t have a strong grasp on security protection due to the impending threat of cyber-attacks. As a result, securing the IT environment came in as the top IT concern for 2014.

Less than 50% of the respondents say they’ve addressed all relevant threats, including cloud, mobility and social media, indicating a real need for accounting professionals to educate themselves by discussing the issues at hand and connecting with the cloud operations, datacenters and governing agencies that work to monitor and manage these security concerns. Organizations should perform a comprehensive risk assessment of their physical and logical infrastructure, networks, data and personnel to realize which policies and technologies they can put in place to mitigate the risk of cybercrime, data breaches, theft, fraud and more. As a result, CPAs must establish internal IT security, while also working with clients or upper management to make sure data and communications are secure.

– See more at:

Is It Really a Niche? 6 Ways to Know It and Grow It

One way firms can create better experiences for their clients is through niche services. The success of a niche, however, depends on whether firms have identified a genuine niche or a commodity pretending to be a niche, says BKR International. BKR outlines what is and what isn’t a niche — and what your firm should know to grow the right ones. Before you declare a niche or invest in it further, review these criteria.

You have a real niche if:

  1. You offer more than one expert to clients.

Firms will often have one person who is so good at a certain thing that leadership starts calling his or her service area a niche. The problem with one star service provider is that your star can leave or retire. One trusted advisor is not a niche. To have a true niche, you need to train and develop several people to serve it for the foreseeable future.

  1. Your team “gets” it.

You don’t have a niche if your entire firm is not aware of it. Everyone — from administration to leadership — can talk about why you are the best in this area. Develop competitive differentiators around this niche to train staff on selling your firm as the best provider of this service or the best advisor for this industry.

  1. You will invest real time and dollars for its growth.

If you are fearful of growing a niche because of budget constraints or small potential client base, it is not a good niche. You need to commit to staff development and leadership in this niche, invest time in your sales process, promote it in your marketing and speak about it publicity. Will you promote it on your website? If the answer is no, then don’t call it a niche.

  1. Pricing isn’t a concern.

We’ve seen firms who want to call a commoditized service a niche when in reality they’ll get little return for their efforts. Niches attract premium fees from ‘A’ clients. Your clients choose you for your knowledge, not because you offer the lowest price among several very good firms. If other firms don’t view you as one of the best (if not the best), then you don’t have a niche and can’t hope to have one in the future.

  1. Your goals are measurable.

If you can see the profit potential in this niche based on past client experiences, then you can set new measurable goals. If you are just entering a new industry, make sure the client and profit potential are there by researching competitors and analyzing trends that point toward a growth area. If you can develop a niche based on a merger or acquisition, this is another way of analyzing potential by looking at the target’s past success.

  1. Recruits are attracted to it.

Niche-focused firms also consider the potential to attract great talent because they own a strong market position. By promoting your top status in an industry or service, you set your firm apart from competitors to attract new graduates and experienced hires who want to help you grow your niche.

Sensing a trend? If your firm can prove you have the best team, the best expertise and the best ROI for clients, then you just might have a profitable niche. Be willing to invest real time and dollars into your niche to sustain it as part of an enviable market position for future new business and recruitment.

People at the Center of CPA Firm 2015 Top Issues

The CPA Consultants’ Alliance (CPACA), a group of thought leaders working together to further leadership within the CPA profession, recently held its annual meeting to discuss the most pressing leadership challenges facing the CPA profession and identify solutions to address these challenges.  Following the meeting, CPACA members were asked to comment on the single most important insight and its effect on firms in 2015. Their answers follow:

Angie Grissom

Angie Grissom

Angie Grissom, The Rainmaker Companies,

Firms are moving into dangerous territory when it comes to retaining and recruiting talented team members. If an effort is made to re-examine the way to train, develop and nurture the talent, firms will profit. If this is not a priority, firms could lose team members and lose out on big opportunities. The messaging and tone for the culture comes from the top, and it is increasingly important that firm leaders invest in future leaders and let them know that their opinions matter. It is also important that firm leaders work to create an attractive opportunity for them that rivals industry and competing firms.

Bonnie Buol Ruszczyk, bbr marketing,

Bonnie Buol Ruszczsyk

Bonnie Buol Ruszczsyk

It seems that the CPA profession is at a tipping point. More and more firms are faced with the challenge of making difficult decisions about their future – do we merge with another firm, do we identify and train the next generation of leaders or do we simply continue doing what we have all along? Those that go with the third option are discovering that it’s not a plan for long-term survival, let along growth. Many firms are seeing their best and brightest move on to other firms or to corporate positions since they have grown tired of waiting to be tapped for a partner track. Others that are staying are often less invested in the firm and simply doing a job and collecting a paycheck. I expect that in 2015 we will see even more mergers, but we will also see some decide that it is time to make some changes and focus on succession planning and strategic growth to ensure that the firm survives and the legacy is carried on for future generations.

Carrie Steffen

Carrie Steffen

Carrie Steffen, The Whetstone Group,

CPA firms are on an unprecedented trajectory as existing firm leaders prepare to exit the profession and the next generation prepares to take the reins. Firms that are taking a proactive approach to developing the future leaders in their firms will have a distinct competitive advantage. In conjunction with identifying these up-and-comers is a new focus on firm stewardship and culture transformation. Firm stewardship is the pledge new leaders in the firm make when they assume the responsibility of accepting the firm in its current state and committing to taking it to another level of success—which may also mean creating a new firm model to accommodate the changing wants and needs of its workforce.

Dustin Hostetler

Dustin Hostetler

Dustin Hostetler, Boomer Consulting,

The CPA firm talent wars are still raging strong. I see and hear about it in almost every market/firm with which I work, and CPACA members confirmed as much. It is going to be imperative that firms take measures to address this – beyond the traditional means. Questions firms should be asking themselves to help assess retention issues and develop opportunities are:

  • Are we providing leading edge growth and development opportunities for our team members?
  • Do we have a collaborative culture – both internally and with our clients – in which young talent is attracted to?
  • Do we have world-class processes – utilizing the best technology and process improvement initiatives – in which young talent is attracted to?
  • Does our firm leadership “lead by example” in every way?
  • Do we focus on results, not just effort?
Gary Adamson

Gary Adamson

Gary Adamson, Adamson Advisory,

Baby Boomer leadership in CPA firms will continue to grapple with their own retirements and how to position their firms to survive the succession challenges.

Most prefer an internal succession plan, handing the firm off to the future leadership they believe they are growing to be ready. Unfortunately many will not be able to pull it off. The challenges center on building your bench and must include strategies addressing recruiting, growth and development and retention. But the biggest challenge (and perhaps the key to it all) is to understand and address the gap between the values and expectations of your emerging leaders compared to the current Baby Boomer leadership. We just can’t keep doing things the way we’ve always done them and expect success.

Jennifer Wilson, ConvergenceCoaching, LLC, 

Jennifer Wilson

Jennifer Wilson

The most important issue or opportunity facing CPAs is embracing the next generation of leadership.  Up-and-comers are committed to entrepreneurial, innovative ideas to drive change. They are interested in better leveraging technology, improving efficiency and moving away from a volume model toward a true value model. They embrace anytime, anywhere work strategies and putting people first. I think there’s never been a more exciting time to be a CPA!  Current firm leaders who resist these ideals will find themselves driving their Millennials away – and ending up at a significant competitive disadvantage, without the talent to bring their organizations forward.  Firm leaders who encourage these new ideas and foster an environment of change will retain their best and brightest, ensuring unlimited potential for their firms.

Mary Bennett

Mary Bennett

Mary Bennett, ML Bennett Consulting, LLC,

We are facing the “perfect storm” of baby boomer retirements—lack of gen x and gen y professionals to take the boomers’ place exacerbated by the increasing apathy among potential successors regarding the traditional public accounting model and “partnership opportunity”. This crisis is real and some firms are just “waking up” to the reality of their situation.  Firms of the future have understood for some time that one key to success is developing an organization that values “multicultural competency”.  What does that mean?  It means:

  • the ability to identify and develop talent that is different from ourselves
  • the ability to develop trusted client relationships with business owners who are also different from ourselves

The firm of the future is moving from what we see today to fully inclusive teams of people that effectively leverage the broadest diversity of talent along with contemporary organizational structures and career paths supported by new business models.

Rick Solomon, Thriving Firm, 

Rick Solomon

Rick Solomon

The disconnect between current firm leaders and the emerging leaders who they hope will take the helm one day is hurting our profession and, if left unaddressed, will only get worse. Many current leaders fail to recognize the importance of investing in both the personal and professional development of their emerging leaders. Often we see way too much emphasis on current year profits as opposed to a more enlightened view that investing in your people, your most valuable asset, provides the greatest possible long-term benefits – both in terms of business success and personal fulfillment.

Rita Keller

Rita Keller

Rita Keller, Keller Advisors, LLC,

There is so much M&A activity and we are all seeing many situations where a firm is “merging up” in order to fix a problem. As M&A continues, there will be many firms left behind because the firms doing acquisitions are becoming more selective. They do not want other people’s problems.

Roman Kepczyk, Xcentric,

Roman Kepczyk

Roman Kepczyk

Proactively addressing the different viewpoints between the senior members in the firm and the up and coming future leaders.  Discussions pointed out the root cause of many inter-firm conflicts having to do with senior members becoming comfortable with the environment they have participated in creating, which frankly drives little motivation for them to change if they have been really successful.  Counter this to the feelings of the strongest professional staff that believe they are running the gauntlet to get the firm to adopt positive change. Firms must address these differences and find a middle ground otherwise the future leaders of the firm will be dis-incentivized and leave the firm to either go into to industry or start their own practice (which, by the way has never been easier to do!).

Sandra Wiley

Sandra Wiley

Sandra Wiley, Boomer Consulting, Inc.,

Leaders in our profession are in need of a makeover.  They have the technical skills to run a “today” firm, but they need to gain new skills and knowledge to lead their firm into the future. Learning from profession leaders, and even the emerging leaders in their firms will set them up for success – but they have to be committed to change.  This may not be easy, but it is exciting and necessary.    

Sarah Johnson Dobek, Inovautus Consulting,

Sarah Johnson Dobek

Sarah Johnson Dobek

Firms don’t spend enough time teaching their people how to manage. It takes time to manage, but it creates more productive, profitable workers and an overall better working environment. It also creates trust.  Managing isn’t offering to review notes. It filters in one-on-one training and education, too. Also, training and development of their people is an issue. I am not talking about CPE. Instead, I am talking about one-to-one time with employees. We have done away with shadowing and allowing people to learn through observing and doing. We can’t just throw them to the wolves. Someone has to show them how to do things and be there to support them as they learn.

Tamera Loerzel

Tamera Loerzel

Tamera Loerzel, ConvergenceCoaching, LLC,

The most important insight is not a new insight, but rather a heightened sense of urgency for current firm leaders to come together with their future leaders to understand both views for the future of their firms. I believe they will find more similarities than they believe exist, and on the differences, the current leaders that empower the change that future leaders envision will emerge as the leading firms that attract the best and brightest, make the biggest difference for their clients and define new opportunities for the profession. And, it has to start now with the anticipated transition of the Baby Boomers over the next ten years and continued increase in voluntary turnover in firms with many leaving public accounting.

Terry Putney, Transition Advisors, LLC,

Terry Putney

Terry Putney

Many firms in the profession are enjoying significant top line growth both organically and through acquisitions. However, a growing problem is attracting, developing, and retaining talent. Up to now this problem has been addressed by many firms through increasing productivity with increased investments in technology but also via increasing time requirements for their people, including owners. In the future, successful firms will do a better job than their peers of providing a rewarding and satisfying professional opportunity without sacrificing work life balance. The firms that are not able to deal with this issue will be more likely to seek upstream mergers in order to provide for the succession of their owners.

In 2014 the CPACA conducted a groundbreaking study of CPA firms on “What Drives Happiness at Work”. For more information on The CPACA, to subscribe to their blog or visit their website at

Overheard At The 2015 Winning Is Everything Conference

Leaders across the profession attended the annual “Winning Is Everything” conference in Las Vegas in January, presented by The Advisory Board. Below is a sampling of the insights shared.Winning is Everything 2015

Staff Issues

“To get the best Millennial employees, you are going to need to make a commitment to high maintenance.” Keynote speaker Bruce Tulgan on the realities of working with the next generation’s best and brightest.

“Sink or swim is the enemy when it comes to the new work force. No one has ever left them alone for a minute – they have had structure all of their life. What they expect from older people is leaders who can set them up for success. Sink or swim is not empowerment – it is negligence” Bruce Tulgan

“Every professional working at your firm can secure the same job for a significant increase in compensation within two weeks.” Gary Shamis, senior managing director, SS&G, on the realities of a profession with less than 1% unemployment.


“Too many leaders managers and supervisors are not doing enough leading managing and supervising.” Bruce Tulgan explaining what he believes is the No. 1 issue in the workplace today.

“Rainmakers: Stop clogging your arteries with a lot of client work and billable hours!” Consultant Allan Koltin on freeing up partners who are great at landing business to go out and land new business.

“If you don’t have female role models – men can do it! Pay a coach!” Consultant Rita Keller explains how men need to be partners in developing women in the workforce.

“Bad news doesn’t get better with age. If you talk about the same person over and over, you need to make a decision about them and move on.” Wayne Berson, MP of BDO, on the need to make faster decisions.

“Everyone needs to do a little more next year than they did last year if they want to make more money. We’ll have a big pool of bonuses – the question is, ‘Do you want to participate in it?’ ” Larry Autrey, Whitley Penn MP, laying out the rules of the game at his firm.


“If your firm was 10 times larger than it is today, how would you think about technology?” Gary Boomer on how firms should be approaching the internal discussion about technology.

“In a mature market, with technology changing all the time, business model innovation will be THE foundation for sustainable growth.” Consultant Gale Crosley on how to succeed in business in 2015.

“We all suffer from TOMS Syndrome (Terrified of Missing $H!T)” Consultant Jim Boomer on why we are connected 24/7.

Client Responsibilities

The intersection of innovation and marketing “requires us to make an uncommon service common, and a common service uncommon.” Michelle Golden and Kathleen Walton on how K-Coe Isom attacks innovation.

“I need my accountant to help improve the performance and profitability of my business.” Gary Shamis explains one of BIGGEST OPPORTUNITIES identified on every client loyalty survey they do.

“It’s really easy. I just want our team to make our customer’s day a little easier.” United Airlines pilot Capt. Denny Flanagan, on customer service.

“Cross-selling is the absolute responsibility of equity partners. If you choose not to act in that area, you should be a non-equity partner, not an equity partner.” Allan Koltin delivers the cold truth about partner roles.

Profession Trends

“Don’t tell anybody, but here is a firm in California that is in a revenue share with ADP.” Gary Shamis shares a little-known secret in payroll service partnering with large providers.

“At some point Grant Thornton will be a part of one of the Big 4 – it is just a matter of time.” Allan Koltin, surveying the landscape of the largest firms.