AICPA Council Member Joins Whitman Business Advisors

Walter Brasch

Walter Brasch

Whitman Business Advisors (WBA) announced the addition of Walter Brasch as their newest consultant. Brasch brings more than 30 years of executive experience in the accounting and business advisory industry to Whitman Business Advisors. He possesses a successful track record in leadership roles at several top 100 CPA firms.

Before joining Whitman Business Advisors Brasch served as a partner and chief business development officer at New York-based PKF O’Connor Davies. Prior to that role he served as regional MP at Parente Beard LLC where he oversaw substantial revenue and profitability growth cultivating trusted long-standing relationships with CEOs, board chairs and other key decision-makers throughout the New York-New Jersey metropolitan area.

Brasch currently serves as a member of AICPA Council representing New Jersey CPA members and is the former President of the NJSCPAs. In addition to Practice Management consulting, strategic planning, growth initiatives and partner retreat facilitation, he will be helping WBA expand their newest service offering, the Practice Growth Multiplier(TM).

Phil Whitman, CEO and President of WBA shared his excitement over Walter joining the WBA team. “Walter could have joined another Top 100 firm in a leadership capacity and the choice he made in joining us makes me proud,” says Phil Whitman, CEO and President of WBA. “To have an AICPA Council member and former NJSCPA President as part of our team expands our ability not only to deliver the necessary messages of the changes CPAs need to make to remain relevant en mass, but an expansion of depth and breadth in our ability to deliver the services required as well.”

“I am thrilled to be partnering with Whitman Business Advisors,” said Brasch. “Being part of the WBA team gives me an opportunity to share my 30+ years of experience with CPA firms I have come to know over my career. The talent bench and six-pack of services offered by WBA is unparalleled in the industry.”

ConvergenceCoaching Launches 2018 Anytime, Anywhere Work Survey

ConvergenceCoaching, a leadership and management consulting firm that works exclusively with CPA firms, launched the 2018 ConvergenceCoaching Anytime, Anywhere Work survey (ATAWW). In its fourth edition, the ATAWW survey examines the adoption of flexible work practices in CPA firms across the country.

“Flexible work programs are super strategic for CPA firms,” says Renee Moelders, consultant at ConvergenceCoaching. “Today’s talent is demanding flexibility around when and where their work gets done, and our Anytime, Anywhere Work survey helps firm leaders understand what’s happening in the marketplace so they can keep progressing their own flex practices and stay competitive. Clients also demand more flexibility from their CPA firms, so it’s crucial that firms are able to deliver exceptional service from anywhere, at virtually any time.”

Participation in the ATAWW survey allows firm leaders to benchmark their current program offering against other CPA firms around the country. Results of the survey are shared with participating firms, along with best practices and strategies to drive successful adoption of flexible work policies.

Click here for more information.

Hope is Not a Strategy – Particularly When It Comes to Growing

By Dom Esposito

Dom Esposito

Dom Esposito

There are several things that we find to be particularly curious about small and mid-sized CPA firms?

We are curious about:

  • Why so few firms share with staff (or, at a minimum, potential partner candidates), who see how hard partners work (i.e. “the pain”), the average, mean and high / low range of partner compensation (i.e. “the gain”).
  • Why very few firms share with the staff what it takes to become a non-equity partner and eventually an equity partner.
  • Why scarcely few firms make the necessary investment to develop the next generation of partners.

When it comes to the silence small and mid-sized CPA firms have around partners compensation, it appears that the firms believe that, if they share this information, the staff, in turn, will negotiate for more money for themselves. We guess that is human nature but, in our view, it is not sufficient enough reason to closely guard against compensation disclosure and to keep staff in the dark. Personally, we like staff who want to earn more money. As we see it, the more money they earn, the more they produce and that production results in more profits for the partners. Further, we believe that CPA firm partner compensation, while not comparative to the huge amounts earned in the tech or investment banking industries, is not anything to sneeze at or be embarrassed about. Partners earn handsome sums of money and live very comfortable lives with their families. They should be very proud of it as they work hard enough for it. We have found that disclosing partner compensation statistics to staff is a great carrot for those who aspire to be future partners.

While firms have recognized long ago that marketing, selling and identifying new clients are important activities to sustain growth and therefore spend lots of time and money in these areas, we find that many firms do not make similar investments in attracting and retaining talent – particularly when it comes to “growing” new partners.

In our opinion, it is very healthy for firms to develop a roadmap as to what it takes to get promoted to non-equity partner and then from non-equity partner to equity partner. We also believe that firms will reap considerable benefits if they developed a partner candidate development academy.

Presented below are examples of what is being provided in these areas by some very successful firms.

Not many staff want to become partners at small and mid-sized CPA firms. It is their perception that work and life are not balanced to their liking. Having said that, usually there are a good number of staff at small and mid-sized CPA firms who do, in fact, have an interest in becoming partners. But, again, large numbers of firms are not very helpful in “educating” staff as to what it takes to get the promotion.

On the other hand, there are successful firms who do provide a promotion roadmap for staff. In it they clearly indicate that the path to move to non-equity partner typically is considered after functioning two, perhaps, three years as a senior manager, principal or director. It is made very clear that the key question addressed when a firm is considering a professional for promotion to non-equity partner is: Does the non-equity partner candidate contribute to perpetuating and growing the business of the firm, maintaining and enhancing technical excellence and driving client and staff retention?

In addition to this key question, other criteria and guidelines, all designed to determine if the candidate has demonstrated a track record of performance, used in determining if someone qualifies for promotion to non-equity partner include detailed questions regarding:

  • Client Relationships and Client Service Excellence
  • Technical Capabilities and Distinctions
  • Personal Attributes
  • Staff Development
  • Business Development (a combination of new business and cross selling)
  • Office Leadership / Firm Management
  • Communications
  • Administrative Responsibilities

When it comes time to consider someone for promotion to equity partner, the more successful firms make it clear that they have financial and economic guidelines (including firm per partner standards for revenue, profits and billable hours) that recognize that practices generate different results and, therefore, depending on the candidate’s area of expertise, might require different standards. As a result, firms customize financial guidelines for a candidate’s applicable role and what the candidate needs to do to meet them.

The promotion roadmap also indicates that moving from non-equity partner to equity partner is a consideration after functioning two, perhaps, three years as a non-equity partner. The key question that is addressed when a firm is considering a professional for promotion to equity partner is, has the equity partner candidate significantly contributed to perpetuating and growing the firm’s business, maintaining and enhancing technical excellence, and driving client and staff retention? Further, has this contribution been demonstrated by a track record of steady and increasingly improved performance in the eight areas referred to above?

Finally, to develop the next generation of partners, we encourage firms to launch a partner candidate development academy. It provides an opportunity for partner candidates and senior management to get to know each other better and creates glue for the organization. Perhaps most important, it provides tools to the partner candidates that enable them to maximize their strengths and minimize their weaknesses.

The Link Between Strategy and Winning on Value

Domenick Esposito

Domenick Esposito

By Domenick Esposito

There is a wide chasm between talking about value and making your firm a value-based-firm (VBF). The first step in transforming your firm from just another accounting firm to a VBF is to develop the strategic framework that will consistently deliver value to your clients.

There have been tons of articles written about strategy, its importance and multiple “how-to” models. In many articles, the discussion focuses on creating that “killer” strategy that will propel your firm to stardom and unlimited profits.

Strategy is presented as the driver of top performers and although important, strategy is a STEP to the true driver of firm performance – value. The bottom line is that you win on value – not on strategy.

Let’s begin by understanding the strategy model that firms should use to develop their strategic initiatives for the next few years.

An explanation of each bucket and the logic of the flow:

  • Growth – what is your top line goal and the key strategies to achieve the goal?
  • Organization – what changes are necessary in your organization (processes, systems, etc.) to support the successful achievement of your growth goal?
  • People – what talent do you have and/or need to achieve the growth and organizational goals?
  • Profit – what is your profit goal given the above and what are the key performance metrics that need to be achieved?
  • Leadership – what structure of leadership and management team is necessary to drive the successful achievement of all the above initiatives?

Another way to look at it is the model presented above creates the framework to deliver on your firm’s value model (VM) – what you have chosen to set your firm apart from your competitors and to win new clients on value and not price.

Building your strategies within this model connects and aligns all the important pieces of the firm and ensures that all aspects of the firm are working in unison toward the common vision and strategy – fully supporting the VM that is critical to sustainable success.

How does this strategic planning model relate to value? Whatever your decision is relating to your firm’s VM, to differentiate your firm from all others, it must be grounded in and supported by the strategic model that drives the organization and its people. Any VM not linked to and supported by the firm’s strategy and organization is just another slogan that quickly ends up in the graveyard of useless slogans that so many firms have created.

Why? In simple terms, the VM has to be the living, breathing culture of the firm – engrained in every employee, supported by every system and process, consistently and visibly delivered in every interaction with clients, prospects and anyone else who matters to the success of the firm. It is an attitude, the mojo of the firm.

Your VM has to be based on what your clients and prospects value and not on what you value, not on what you do and clearly not on promising quality and service. In order to make your VM a reality and something that not only resonates with your clients and prospects but that also is part of your firm’s DNA, the strategic model outlined above is the planning framework to create that reality.

Let’s think about why. Many strategic planning models are based on some form of strengths, weaknesses, opportunities and threats. While important, it too often results in the focus of planning on opportunities and threats without any real linkage back to how the firm actually operates. All planning needs to look at some variation of SWOT in order to create a strong baseline regarding the current “as is” of the firm. However, planning based on just opportunities and risks without a clear and strong linkage to how the firm actually operates will fail to achieve the desired outcome – every time.

Most strategic plans include a vision and mission statement component. Although necessary, the third and most important component is missing – the VM.

  • Vision is about who you are as a firm.
  • Mission is about what you do as a firm.
  • Value is about what you deliver as a firm.

All three are essential to a closed-loop structure for strategic planning. To ensure that your firm’s VM is real and that it delivers the promised value to your clients every time, complete these five steps to value planning and see your wins as well as client retention soar:

  1. SCOTA – start with an objective understanding of the “as is” of the firm – what are your strengths, challenges, real opportunities and finally “targeted actions” or what initiatives will be necessary to capitalize on the opportunities.
  2. Vision statement – develop a clear and convincing value statement about who your firm is, what it stands for and what you are striving to become.
  3. Mission statement – develop a clear definition of what your firm does – what is its ultimate mission or why you exist,
  4. Value model – what is the value that you will deliver to your clients and prospects – the value that they want and that clearly differentiates your firm from the pack.
  5. Strategic planning model – finally, prepare your 18-month to two-year plan using the model presented above. For each strategy within each bucket, develop the initiatives to be completed to successfully implement each strategy. For each strategy and initiative, define the deliverable and the metric of success.

Completion of each of the five steps, each with the VM at its core, will successfully transform your firm to a successful VBF that can dramatically improve its organic growth and profitability.

Now the most challenging task lies ahead – implementation, keeping everyone’s focus on the implementation of the plan and transformation into a VBF.

Client Experience Impacts Firm Growth

Carrie Steffen

Carrie Steffen

By Carrie Steffen, The Whetstone Group

One of the ways marketing professionals are elevating themselves within their firms is by shedding light on the important and often overlooked growth strategy of client service. While most firm marketing professionals are not client facing, marketers do understand the concept of value, service, meeting needs, communication and many other critical client service skills. They also can begin to educate their leadership teams on the impact clients have on top-line growth.

CPA firms often rely on revenue numbers, realization and chargeable hours to determine how business is going. But by giving your clients a voice, you’ll learn what you can be doing better, how to sustain high performance and how you can more effectively grow your firm’s top line.

The Link Between Loyalty and Revenue

A study conducted by InfoQuest to quantify the impact of client loyalty on revenue found that a “totally satisfied” customer contributes 2.6 times more revenue than a “somewhat satisfied” customer, and 14 times more revenue than a “somewhat dissatisfied” customer.

If we assume that customers who rate themselves as “totally satisfied” are loyal, it’s clear that loyalty plays a significant role in how much revenue a client generates for your business. Not only that, improving the lifetime value of your client base by increasing client retention levels significantly impacts your firm’s ability to grow its top-line because you aren’t constantly replacing revenue from clients who are leaving the firm.

Totally satisfied clients will also refer business to you and serve as a reference (if you ask) …making it easier to attract new relationships and making your other marketing efforts more successful.

Beyond the revenue impact, though, is the fact that working with loyal clients who recognize the value of the relationship with your firm, seek your counsel, are fun to serve and take your advice create for a very fulfilling practice. They create interesting professional opportunities and an enjoyable atmosphere. Who wouldn’t want to practice public accounting in an environment like that?

How Do You Know What Clients Value? Ask!

Coordinated efforts to improve client service can yield some of the greatest returns on investment of any growth activity. To be most effective, any effort related to improving client service should germinate from feedback from your best clients.

Often, when firms measure satisfaction, they focus on engagement satisfaction. How satisfied were they with the outcome? How did they enjoy the experience of working with your team? What could you do differently? How would they rate the deliverables? While important, these surveys don’t adequately measure how client feel about the relationship—which is what drives loyalty.

Consider a formalized program to learn the following from your clients:

  • What attributes of service do they associate with your firm?
  • What attributes of service are most important to them in hiring a CPA?
  • How satisfied are they with your firm’s delivery of the attributes that are most important?

Understanding your clients’ perspective enables you to define the behaviors of client service that will enhance loyalty. You can then train everyone in the firm on the behaviors for consistent delivery. Clients will begin to see and feel the difference between your firm and others in the market.

If you are not yet focused on client experience in your firm, use resources, like AAM, to devise and implement a role for yourself in this area. At the very least, become a project champion for understanding what your clients value in their relationship with your firm. Arming your firm with this information will help you and other firm leaders make better decisions about how to achieve your firm’s goals.

Steffen, founding shareholder and president of The Whetstone Group has more than 20 years of CPA firm marketing experience. Before joining Whetstone in 2000, Steffen was an in-house marketing director in the national marketing office of RSM US.

From Performance Management to Continuous Feedback

Jim Boomer

Jim Boomer

By Jim Boomer, Boomer Consulting

Enhancing employee engagement is a goal for many firms today. An employee who remains engaged throughout the year is better motivated, more productive and more dedicated to the firm than employees who are disengaged. One crucial way to improve employee engagement is switching from the traditional annual or bi-annual performance review model to continuous feedback. Once you have a decent employee evaluation template in place you can recycle it each time you want to get feedback too, so that it is not increasing the workload of the HR department tenfold.

Performance Management is Out

Firms are realizing more and more that performance reviews are an extremely time-consuming process that doesn’t necessarily produce the intended results. In an article for People + Strategy, a manager from Deloitte referred to the review process as “an investment of 1.8 million hours across the firm that didn’t fit our business needs anymore.”

The Big 4 firms aren’t the only ones spending a significant number of hours on performance reviews. According to research from CEB, across all industries and professions, the average manager spends 210 hours per year on performance-review related activities such as filling out forms and delivering evaluations.

All of that time is spent delivering feedback that, six or 12 months later, is stale, ineffective and frustrating for the recipient. Only 10% of non-millennial employees and 5% of Millennials find value in annual performance reviews. They’d rather know that you were unhappy with their performance when it happened so they can correct course in real-time.

As Kris Duggan, CEO and co-founder of BetterWorks wrote in Forbes, “Imagine if your FitBit gave you a step count at the end of the year instead of daily. How would you ever improve?”

How to Deliver Continuous Feedback

The main complaint we hear from firms that have not moved away from the performance review model is they can’t see how they’ll fit in more time for feedback when scheduling and conducting annual or bi-annual performance reviews already takes up so much time. But continuous feedback can actually be less time consuming than delivering performance reviews.

The After Action Reviews (AAR) is a concept that has trickled down from the U.S. Army to organizations all over the world. They’re less about reviewing performance and more about sharing knowledge and building a culture of accountability.

In the military, informal AARs happen after training events or projects, and they focus on discussing what happened, why it happened, and how such actions or projects can be done better in the future.

In a firm, AARs don’t have to be a time-consuming, formalized process of filling out evaluations and scheduling meetings. They can be much more informal, just a brief meeting after the conclusion of a significant project or engagement.

During the AAR, ask:

  • What was supposed to happen?
  • What actually happened?
  • What were the positive and negative factors?
  • What did we learn and how can we do better next time?

Many modern technological solutions can help facilitate gathering this information. Inside HR recommends looking for a solution that can:

  • Deliver a single dashboard to easily review, search and filter all feedback you’ve been given, provided or requested.
  • Allow anyone to provide or request feedback for themselves or someone in their team – with notification and reminders for people
  • Categorize feedback – e.g., giving recognition versus coaching and mentoring
  • Link feedback to competencies and goals in an integrated talent system, so you can offer this feedback through structured monthly or quarterly check-ins.

Remember, this isn’t a performance review, but a teaching moment that enables timely behavior change and keeps employees focused on important goals. You may find that annual performance reviews are no longer necessary, but even if you continue to have some sort of yearly conversation, it will take less time and have fewer surprises.

Employees want to enjoy the work they do and feel confident that their work is valued and contributing to the firm’s strategic goals. The move to continuous feedback will make your employees happier and more productive. With the time saved, enhanced engagement and greater alignment with the firm’s goals, the death of the annual performance review can have a positive impact on your firm.

Jim Boomer, CEO of Boomer Consulting, Inc., is an expert on managing technology within an accounting firm. He serves as the director of the Boomer Technology Circles, The Advisor Circle and the CIO Circle. He also acts as a strategic planning and technology consultant and firm adviser to CPA firms across the country.

Winding River Consulting Graduates First Managing Partner Bootcamp Class

Gary Shamis

Gary Shamis

Gary Shamis, of Winding River Consulting, was an IPA “Most Admired Peer” in 2013 when he was managing partner of SS&G, the firm he built to more than $80 million in revenues. After it merged with BDO, Shamis stayed on to oversee the transition, but he knew it was not the final stop in his career. After some consideration, he realized that the best opportunity lay in helping MPs identify and attain goals of growth, productivity and profit. Winding River Consulting was born.

Now Shamis has created Managing Partner Bootcamp (MPB) to address the glaring need for new MPs to understand their role. “The day you get voted in, nobody hands you a playbook, handbook, cheat sheet, nothing. You’re left to figure it out yourself,” says Shamis. “As a result of that strategy, you’re bound to have more failures than successes, a longer, windier road, and a goal that never seems to be in sight. Once voted in by your partners, a new managing partner is expected to take the firm to the next level. If they’ve been lucky, they’ve had the time to transition and learn from their predecessor. But there’s still no assurance that they will succeed.”

MPB helps new MPs get up to speed with fewer mistakes, miscalculations and the ability to achieve more audacious goals. The program includes 16 courses, led by subject-matter experts, focusing on subjects like managing crisis, facilitating change and mitigating risk.

“Accounting schools don’t teach the soft skills – communications, presentations, team-building. They are, understandably, focused on providing students with the most current technical skills available to support their pursuits for long-term careers,” he says. “It’s detrimental, however, when these accountants find themselves in leadership roles and don’t have the skills or confidence to make decisions, have conversations, or truly understand how to create, implement and measure a strategic initiative.”

WRC recently graduated its first MPB class — managing partners from Los Angeles to Amsterdam, men and women, firms with 40 to 800 employees, MPs in the role for years and those approaching the role within months.

The graduates include:

  • Dave Barber, Tuscon, Ariz.-based Regier Carr & Monroe
  • Tom Barry, Green Hasson Janks (FY16 net revenue of $27.8 million) of Los Angeles
  • Kreg Brown, Denver-based EKS&H (FY16 net revenue of $99.6 million)
  • Patrick Lambrechts, Netherlands-based Bol International
  • Joseph Saka, Miami-based Berkowitz Pollack Brant (FY16 net revenue of $51.2 million)
  • Lisa Shuneson, Whalen & Company of Worthington, Ohio
  • Chris Sullivan, Bellingham, Wash.-based VSH CPAs
  • Jason Yetter, Richey May & Co. (FY 16 net revenue of $16.3 million) of Englewood, Colo.

The 2017 IPA Most Recommended Consultants

We are proud to announce the 2017 IPA Most Recommended Consultants, listed in alphabetical order, and their firms. The full list was highlighted in the October issue of INSIDE Public Accounting.

Each year INSIDE Public Accounting asks firms from across the nation in the IPA Annual Survey and Analysis of Firms to name one consultant, whom they have used during the past year.

Congratulations to this group and IPA thanks this group for their hard work and dedication to the profession.

Click on the consultants names to view their answers a few questions on the state of the accounting industry.

Accountants Advisory Group
Joseph Tarasco

Boomer Consulting Inc.
Gary Boomer

Carl George Advisory
Carl George

ConvergenceCoaching LLC
Jennifer Wilson

Crosley Company
Gale Crosley

Koltin Consulting Group
Allan Koltin

The Rosenberg Associates
Marc Rosenberg

Succession Institute
Bill Reeb

Upstream Academy
Sam Allred, Tim Bartz

Roman Kepczyk

Golden Launches Consulting Firm, Fore

Michelle Golden

Michelle Golden launched a new venture, Fore LLC. Applying original techniques for up-front pricing, Fore provides education and implementation consulting to CPA firms committed to converting from a time-based billing model to pricing their work in advance.

“Demand from larger firms for this type of pricing help rose sharply this year, no doubt because of heightened talk of impending industry impacts. One driver is time savers like artificial intelligence and blockchain. Another is the growing need to become anticipatory organizations that innovate to replace compliance work with higher-value service offerings,” says Golden.

“Advantages also include much richer conversations between the CPA and the customer,” Golden continues. “When CPAs become more attuned to what’s most valuable in buyers’ eyes, they do more of it – it becomes a terrific cycle. Among CPA firms who want to augment compliance by becoming stronger business advisors, managing partners say they see a pricing-model change as a crucial next step.”

Roman Kepczyk, Xcentric – Most Recommended Consultant

Roman Kepczyk

Roman Kepczyk

Roman Kepczyk

What is the most common technology mistake being made in the profession today and how can it be addressed? 

Minimally adopting a “paperless” technology/tool with management believing they are done after the initial install. We partner directly with 30 firms per year and often hear from firm management they have implemented digital technology solutions but have not received the benefits they expected. In many cases we find that the firm did a bare minimum or rushed installation and have not followed up with adequate training or re-evaluation of new system capabilities. Surprisingly often they are asking for features that either already existed in their application or have been added to it since they first implemented it. This is particularly true of digital workflow tools, practice management projects, portals, and scanning production processes. We suggest firms send the actual users/administrators of these applications to industry conferences with the express intent of learning about new features and existing capabilities as well as networking with other successful users.

What would you recommend firms do over the next two to three years to keep ahead of the game?

While I believe that firms can improve their tax and administrative processes significantly by optimizing the applications that are already available and applying “Lean” methodologies, I believe assurance services will be going through a significant transition towards the end of your three-year time frame. Blockchain and Artificial Intelligence/Cognitive Computing concepts are evolving rapidly towards financial/corporate adoption at a pace we have not seen since the Internet/World Wide Web transition. I believe Blockchain adoption will be driven by banks/lenders to retain their hold on financial transactions/commerce and that CPAs will have to adopt more advanced, real time tools integrating AI and Big Data Analysis if they want to continue to own the audit franchise and grow their consulting opportunities. We suggest all our firms assign the responsibility of monitoring assurance technologies to a technologically astute manager who would educate owners so the firm is not left out in the cold.

What questions should firms be asking themselves as they are implementing new technologies?

  1. How does this technology actually improve our internal production processes and the way we service clients? Firms should document new practices/processes, so team members can be taught and be held accountable to them as a firm standard, as well as communicating to firm members and clients why this technology or process serves them better.
  2. Do we have the right people involved in the evaluation, selection, and implementation of this application, tool and/or process? By this we mean you need to have end users and administrative personnel involved, as well as an implementation champion with a vested interest in a successful outcome. Also, having access to independent knowledge and validation through CPA firm association peers or hiring industry consultants specializing in the specific area reduces the risk of the firm making a bad or incomplete decision.