Joe Tarasco, Accountants Advisory Group – Most Recommended Consultant

Accountants Advisory Group
Joseph Tarasco

What mindset would you like to see more or less of in the profession?

Joe Tarasco

Joe Tarasco

More of… Creating a Sense of Urgency — One of the most challenging problems of leading a CPA firm in this very competitive environment is the ability to implement organizational strategy and initiatives with a “sense of urgency.” When leaders fail to manage with a sense of urgency then complacency, entitlement and comfort-zoners dominate the firm’s culture. In fact, implementing progressive business decisions and strategic implementation without a sense of urgency is one of the primary causes for the fast-paced consolidation in the public accounting industry.

What questions should firms be asking themselves if they want to grow as it relates to revenue?

  • Is the firm “carrying” too many underachieving revenue-generating partners and managers?
  • Should the firm hire a professional lead generator?
  • Is the current partner compensation program motivating the partners to delegate to junior partners or managers? Are partners being held accountable for new business generation and delegating work?
  • Are we providing the partners with the appropriate amount of marketing and lead generation support whether in-house or outsourced?
  • Is the firm properly positioning itself in the marketplace and targeting the right types of clients with in-demand services? Should we be offering more formal advisory services?

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

Succession planning should be a daily routine. Succession planning is not a program that should take place a few years before client service partners and/or leaders are about to retire. It should be an ongoing daily occurrence that considers partner governance and compensation, marketing, recruiting and retention at all levels, and staff performance management. Succession planning needs to start at the top with a true sense of urgency. Holding partners accountable for implementing the firm’s succession plan, and compensating them accordingly, is key to the success of the plan.


Jennifer Wilson, ConvergenceCoaching – Most Recommended Consultant

ConvergenceCoaching LLC
Jennifer Wilson

What advice would you give to partners/MPs to help them coach younger staff?

Jennifer Wilson

Ask more than tell. Find out what the younger staff like most, like least, want more of, want less of, and why BEFORE advising them. Be open to receiving feedback as well as giving it – younger staff have opinions and ideas for change and want to be able to share them.

What do you think is the biggest blind spot in firms today, and how do they rectify this?

The biggest blind spot is that most firm leaders feel they have plenty of time to make the “big” changes – the move to advisory, the implementation of technology in almost every aspect of service delivery and firm operations, the shift to more virtual service, the changes needed to serve Next Gen clients and talent – when the changes will happen faster than they can conceive of. Waiting for a few more retirements, or to get more buy-in, before acting could be a mortal mistake.

What has surprised you most in the client interactions / questions / engagements you’ve had this past year?

There are a few surprises. First, the denial, which stems from complacency, that continues to handicap so many firms. Second, in higher functioning firms, how quickly they gain traction with significant change initiatives once they establish a clear vision and task leaders with implementing their plans. The first surprise is so disheartening to me, but the second gives me hope for the future of the profession.

Gary Boomer, Boomer Consulting Inc. – Most Recommended Consultant

Boomer Consulting Inc.
Gary Boomer

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

Gary Boomer

Gary Boomer

Lack of leadership and a technology roadmap that focuses on The Business Capability Model. Most firms are spending their IT budget in products and services, and financial reporting while ignoring operations, marketing, sales, talent development, legal and compliance and the experience – client and users.) Develop a vision, strategic plan and IT Road Map, then hold everyone accountable, especially the partners. Don’t forget to evaluate your processes in order to leverage the technology.

What mindset would you like to see more or less of in the profession?

Collaboration and a team culture where those who are not CPAs are respected and rewarded for their unique abilities (IT, HR, Marketing, Sales, Project Management, Talent Development and Data Analytics). A mindset of lifelong learning (acceptance of change) and growth (desire to be a game changer) are also important.

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

Will this allow us to scale 10X? Exponential and global rather than local and linear thinking result in better solutions. You get your answers when you ask, what would the firm do differently if they were 10 times larger? What would you do differently, if the firm were 10 times larger? You need to think like the firm you vision, not like the firm of the past. Exponential thinking attracts better talent and clients. What impact will this have on the client and user experience? Think mobile. Finally, what will it cost if we don’t make the investment?

Gale Crosley, Crosley Company – Most Recommended Consultant

Crosley Company
Gale Crosley

What advice would you give to partners/MP’s to help them coach younger staff?

Gale Crosley

Gale Crosley

If the person is deemed high potential, then let them know it and purposefully invest in them, giving them more exposure. Example – take them to managing partner conferences, ask them to lead a special interest group at their association, encourage them to develop their communication skills through groups like Toastmasters or a communications coach, encourage them to develop their leadership skills at outside organizations.

What do you think is the biggest blind spot in firms today, and how do they rectify this?

Continuing to hire only CPAs rather than college hires and experienced consultants who have skill sets needed for audit and tax of the future. Everyone has gotten the memo that our world is changing dramatically, but I don’t see enough action yet following the talk. This shift in resources is requiring our leaders to get out of their comfort zone and go exploring. There are parallel universes that we’ve barely touched, such as consultants who are experts in industry-specific data analytics, and college degree programs which focus on data sciences and cutting edge technologies.

In addition, our auditors and tax people have always thought of their career in a certain somewhat predictable trajectory. However, it would be unfortunate to go hire people with the skills we need, and leave our current talent behind. One practical initiative is to expose our up and comers to the future as we see it, and give them an opportunity to rethink their career path. For example, it’s clear tax and wealth management are coming together, creating a broader service suite in the market. Are certain tax people prepared to reconsider where they have been headed? Are there auditors in your firm prepared to pivot into operational data analytics?

What has surprised you most in the client interactions / questions / engagements you’ve had this past year?

Nothing comes to mind. Each client has their own set of issues and opportunities.  Although there are common themes, each situation has nuances, keeping problem-solving fresh and exciting with each assignment.

Allan Koltin, Koltin Consulting Group – Most Recommended Consultant

Koltin Consulting Group
Allan Koltin

What has surprised you most in the client interactions / questions / engagements you’ve had this past year?

Allan Koltin

Allan Koltin

I’m not sure I would call it a surprise, but rather more of a reaction to the changing landscape within the profession, as it relates to the audit side of the practice. All of the discussion over artificial intelligence, machine learning, and the fact that both audit fees and college recruitment of talent could decline by as much as 30%-50% over the next three to five years, has clearly generated a lot of concern. I think once the dust settles on this issue and firms take a step back, many of them will realize that there is a great opportunity here, provided they can figure out the appropriate technology platform to serve audit clients going forward. I would not be surprised to see a couple of the very large firms license an audit methodology for smaller firms to help them reengineer as it relates to artificial intelligence and the use of robotics for the auditing side of their practice.

What do you think the biggest blind spot in firms regarding M&A is and how can that be rectified?

Safe to say, there are many blind spots that both the acquirer and acquiree deal with before and after the merger. Smart thinking is to put as many of those on the table as possible prior to the merger. I think one of the biggest blind spots that still remains is what I’ll refer to as the “human factor.” Some could call this the giving up of control or the loss of autonomy. Others might possibly call it an increase in accountability. I truly believe that the smaller firms overestimate how much their lives will change after the merger and the larger firms overestimate how quickly they can successfully integrate a firm into their practice. These, to me, would be the two biggest blind spots that I observe in working with both the larger and smaller firms.

What would you recommend firms do over the next two to three years to keep ahead of the game – other than M&A?

I think the silver bullet on this one is to create the best mousetrap in their market for recruiting experienced talent away from competing firms. Obviously this is easier said than done and requires that the firm first builds a very successful practice and then goes out and attracts great talent away from other firms. Too many firms are blind to the fact that their firm has issues and obstacles that first need to be dealt with before they can go about attracting “best in breed” talent into their firm. It’s almost as if they want to look the other way and pretend that certain problems or issues don’t exist.

Number 2 on my list would be going to the rainmakers of the firm and pulling away as much of their book of business and billable hours as possible to free up their time. That being said, we all know if these partners believe that book of business and billable hours equate to partner compensation, trying to take these things away is darn near impossible.

Bill Reeb, Succession Institute LLC – Most Recommended Consultant

Succession Institute
Bill Reeb

What has surprised you most in the client interactions / questions / engagements you’ve had this past year?

Bill Reeb

Bill Reeb

Most senior owners are conservative when it comes to changing how their organizations work given the large amount of money they make and their comfort in what they have to do to make it.  But even when those owners realize that some of their key ideas and processes are substantially flawed, it is surprising how long they hold on to the philosophy that “what got me here will get me there.” The sad part is that as senior partners get close to retirement, that is when they first realize that what they have built really only works well for them. Merger mania is not driven by a shortage of talent, although that is the most expressed reason, but rather it is about an organizational structure and culture that has long outlived the success the firm has been enjoying, as they have consistently traded off long-term effective initiatives for short-term efficiency tactics.

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

Succession isn’t about partners, although everyone wants to make it about them. Succession is about making sure everyone is living up to their entire job function, not just the parts they want to do. When partners get to do whatever they want, they often choose to revert back to manager-level work. Unfortunately, that dysfunction trickles down throughout the organization. Partners need to get out of the details of the work they are doing and spend more time in their higher-level client relationship and strategic advisory roles. When we consult with firms about succession, while there are definite issues that retiring partners need to comply with, like client transition, the solution is typically best found through leverage! By adding more people, learning to delegate, managing better, consistently training, most firms have enough partners, they just haven’t chosen to develop the kind of leverage necessary for seamless succession and sustainability.

What questions should firms be asking themselves if they want to grow as it relates to revenue?

Everyone wants to make business development into some complex magical skill set only possessed by sliver-tongued devils. This simply isn’t true. Organic growth is about holding partners and managers accountable to following basic fundamentals that should be clearly articulated in their roles and responsibilities. If you want to grow, stay visible with your referral sources and they will refer you. Even more important, stay visible and interested in your clients too, as not only will additional work come your way, but they will refer you to others as well. Make it your job to understand the strategic priorities of your top clients, including non-accounting focus areas, and good things will come your way. This simple, fun-to-do job function makes up about 90% of almost every firm’s organic growth, so stop making this harder than it needs to be … just make sure your people start doing their jobs!

Sam Allred/Tim Bartz, Upstream Academy – Most Recommended Consultant

Upstream Academy
Sam Allred, Tim Bartz

Sam Allred

Sam Allred

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

The most common mistake firms are making is a failed culture of investment. Firms focus too much on NIPP, distribute virtually all profit to stakeholders, and implement cost-cutting, not value-building, initiatives.

Too many Baby Boomers ask: What’s in it for me? They oppose long-term investments, believing a future upstream merger will solve everything.

The mastodon in the room needs to be confronted with hard questions:

  • How much profit should we invest in people, technology, new services, etc.?
  • How can we position the firm to compete?
  • What training do younger professionals need to replace, or supplement, current technical skills?
  • What non-accounting professionals and services should we explore adding?

These questions require not only discussion and planning, but real dollars and an attitude that investment is vital to the firm’s future.

Tim Bartz

Tim Bartz

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

Firms should do three things:

  • Move away from performing as groups of generalists with everyone serving a smattering of clients in myriad industries. Partners/managers should pick two to three areas of focus so the firm can move clients to those who have expertise in that industry or technical specialty, bringing focus and expertise to the client table.
  • Have stakeholders move a block of compliance work hours to those junior to them; replace these hours with time spent in discussions with A- and B-level clients focused on the client’s strategic needs and objectives. Make the primary goals for the compliance areas efficiency and effectiveness (that is, maintaining quality, minimizing hours and dealing with requirements so you can focus on delivering strategic assistance to your best clients).
  • Become client-centric and ask: What do clients want and need? And, how will our firm address common client issues with new skills and services?

What has surprised you most in the client interactions / questions / engagements you’ve had this past year?

The biggest surprise is the unwillingness of so many professionals to commit to real change in the way they do business. They listen to the warnings of coming changes and agree that transformation is necessary, but they haven’t personalized it yet. David Maister’s article, “Strategy and the Fat Smoker,” could never have been more on point than it is right now. Firms have heard from multiple sources they shouldn’t stay attached to compliance as their primary focus, but they still haven’t come to grips with the fact that the status quo will kill their firm. Most seem more willing to die than to change.

Carl George, Carl George Advisory – Most Recommended Consultant

Carl George Advisory
Carl George

What has surprised you most in the client interactions / questions / engagements you’ve had this year?

Carl George

Carl George

Extraordinary next generation leadership. While I’m not surprised, I am so impressed that the future leaders of the firms are in place and ready to roll. More than one-half of the firms that I work with have passed the baton from the Boomers to the Next Gen. In my opinion, our new leaders are better equipped overall that our senior leaders were at the time they took charge. That tells me that the investments the firms have made in formal leadership training has and will continue to pay off. These leaders are equipped with the energy and enthusiasm, terrific vision, and the leadership skills to continue their firm’s legacy. Most importantly, they understand the changing profession and how to motivate today’s evolving work force. What I love the most is that our future leaders bring new ideas and skill sets to the table in their quest to attain their firm’s strategic objectives. They are not satisfied with the status quo, when the status quo is not as effective today.

In addition, the “glass ceiling” has disappeared in many progressive firms. The female leaders that I work with are great listeners and want to learn. For those I coach, sometimes I wonder who the coach is – her or me. I love their approach to leadership. My first piece of advice to our female leaders is this: “Have empathy for the way it’s been done, and the leaders who brought the firm to this point. With that empathy in mind, your No. 1 goal is to effect positive change going forward. How you do it, may be different. But, when the results arrive, everyone will be on board.”

What mindset would you like to see more or less of in the profession?

The final death of the “book of business” metric. What’s the opposite of the “team approach” in public accounting? Answer: Book of business. When the “book” is utilized as a leading metric in gauging the performance (success) of a partner, behaviors will change and most often be counter-productive to the team effort. The book mindset encourages individuals to build a personal client list that they “own.” Why? Because they are rewarded for that behavior. The most successful firms have eliminated this metric many years ago, but there are some firms continuing to utilize it. The fact is, while the metric may have been acceptable in the past, today I consider it a “counter-metric,” that is, one that works against firm success. It inhibits succession planning, creates silos within a firm, and drives rising stars to firms that are more team-based.

What do you think is the biggest blind spot in firms regarding M&A and how can that be rectified?

I believe there are two glaring blind spots.

  • Lack of a M&A Strategy. Develop a document that addresses the firm’s overall philosophy of M&A – the WHY; guiding principles (“rules of the road”) when reviewing an opportunity; the preferred target firm profile; if applicable, the preferred geographic targets; financial guidelines; research and target data.
  • Thinking the job is done when the documents are signed by both parties. Let’s face it, M&A is a high-risk activity – even if every facet goes smoothly. The entire cycle takes an enormous amount of resources from both sides, starting with the selection process, negotiation, due diligence, various meetings to discuss culture match and strategic objectives, and finally, the signing of the documents. In truth, the work has just begun! The integration and transition phase calls for all hands on deck, as it will take the efforts of both legacy firms to pull off success. After signing, unfortunately, many “go back to work on their regular job.” In fact, at this point all partners from both firms must take on additional responsibilities to assure that integration and transition of the people, systems and processes, and the clients are successful. I recommend: revised partner goals to reflect those additional responsibilities; a one-year business plan with two to three essential goals focused on short-term success; a three-year strategic plan for the longer term; and ongoing communications plans with consistent messaging regarding the business reasons and opportunities for the firm personnel, and the value enhancement for the clients.

Right Networks Acquires Xcentric

Hudson, N.H.-based Right Networks, a provider of cloud-based accounting and business solutions for CPA firms, accounting professionals and small-businesses, has acquired Atlanta-based Xcentric, a provider in managed IT solutions for accounting firms.

“Everything from Xcentric’s core business to their company culture and values are complementary to those of Right Networks. Our combined offerings will bring our customers an unparalleled set of solutions to choose from as they move along their cloud journey,” says John Farrer, CEO and founder of Right Networks. “The Right Networks cloud combined with Xcentric’s complete cloud offer gives the market a wide range of offerings to choose from.”

The company will continue to offer Xcentric’s complete cloud solution and plans to accelerate the growth of this customer base, while continuing to provide exceptional customer experiences.

“Our team was seeking the right partnership with a company that shared our mission, market focus and core values so we could offer our customers even more value and accelerate our opportunity for growth,” says Trey James, CEO and co-founder of Xcentric. “Right Networks has consistently demonstrated their leadership position in cloud-based accounting and business solutions by providing laser beam focus on the needs of accounting professionals.”

Guest Article: Navigating Through Preliminary Merger Discussions

Joe Tarasco

Joe Tarasco

Joseph A. Tarasco, CEO of Accountants Advisory Group

Most merger and acquisition deals typically go through five stages: preliminary discussions; transactional detail meetings and negotiations; an initial agreement outlined in a memo of understanding or letter of intent; due diligence; and the transaction agreement and signing of the partner / shareholder agreement.

Quite often, I am asked what are the pertinent types of questions that should be asked by the selling firm in a merger and acquisition transaction in the first few meetings. The following are some examples:

Vision, Strategic Planning and Future of the Firm

  • What is the vision and strategy for the firm for the next five years?
  • What is the culture of the firm?
  • Does the firm have an annual partner retreat and/or strategic planning meeting?

Partner Compensation, Management and Risk

  • How is partner compensation determined?
  • Do partners have annual goals and objectives? If so, how often are the partners counseled?
  • Are partners held accountable?
  • Describe your partner governance structure.
  • When was the last time you updated your partnership agreement?
  • Do you have partner meetings?  How often do you meet?
  • How is partner equity determined?
  • What are your average partner billing rates? Staff rates?
  • Has the firm gone through a de-merger or terminated any partners in the last five years?
  • Do you have any professional liability claims that have not been settled?
  • What has been your claim experience in the last five years?
  • What is the structure of your IT department?

Succession Planning and Professional Staff

  • How many equity and non-equity partners do you have?
  • Are any partners planning to retire in the next few years?
  • Do you have partner retirement payment projections for the next 10 years? Does the firm have a “cap” on retirement payments?
  • What is your staff turnover rate?
  • Describe your training program.
  • How often do you counsel staff?
  • What methods do you use to recruit staff?  Have they been successful?
  • Do you hold staff meetings?
  • What is your current staff-to-partner ratio?
  • Who oversees scheduling?
  • What is the structure of your HR department?

Partner Marketing Activity

  • What is the source of most of your new business? (If it is from referrals, what types of individuals and companies?)
  • How many partners bring in new business? How many are “rainmakers”?
  • For marketing purposes, is your firm organized into industry / service teams?
  • Are the partners held accountable for their marketing efforts?
  • Do you have new client acceptance criteria?
  • What does the firm do to identify additional service opportunities with existing clients?
  • Have you ever conducted a client satisfaction survey?  If so, what were the results?
  • What is the structure of your marketing department?

Service Offerings

  • What are the firm’s strongest niches?
  • Is the firm known as an expert in any industry?
  • What percentage of the firm’s revenue is compliance vs. consulting/advisory services?
  • What percentage of revenues is assurance versus tax?
  • Does the firm offer financial services? If yes, to what extent?