CPA firms are trying to figure out how to do more with less while at the same time continuing to be competitive and profitable. These demands require that firms increase the productivity, efficiency and collaboration of their workforce. Three of the areas in which firms can focus their attention to help accomplish this are paperless tax, value pricing and performance achievement systems. Forward thinking.
Paperless tax preparation has been a hot topic in many firms for the past six or seven years. Countless firms have adopted new processes and procedures in order to try to capture the benefits that improved technology has to offer. While the software companies have certainly provided vastly improved programs to speed up the preparation process, firms are still struggling to achieve the big payoff. The firms that have succeeded have focused internally on how they do things. They have viewed the preparation process like a manufacturer, continually evaluating what they are doing and how they are doing it. They document the processes that they use and constantly empower their workforce to ask “why are we doing it this way?” Successful firms are also rewarding creative and innovative thinking. They are recognizing that standardization is a very good thing. Tearing down old legacy systems and processes is a must-do, and not a should-do. The systems that were built to last in the past are not useful in today’s technologically advanced firm.
Planning for tax season has become a critical ingredient to capturing the rewards that today’s technology tools have to offer. Establishing technology and/or tax committees to review new opportunities with both hardware and software, along with flow-charting procedures, is becoming part of standard operating procedures in these firms. The committees are also responsible for communicating, training and implementing the new processes.
Progressive firms will also tell you that the most important ingredient is accountability. Firms with solid structure and discipline are the ones that really do achieve the big pay off from technology. They have learned how to minimize the impact that silos, politics and turf wars have in their firm. Today’s successful firms recognize that how they do it is as important as what they do and investing internally is tantamount to achieving results.
Firms of the future have also realized that it is okay to loosen the grip on the all important billable hour. They have opted instead to trash the timesheet and adopt value-pricing strategies. These firms have recognized that the information they were getting from their time-and-billing systems may not be benefiting them as much as they thought. The cost of maintaining the old time-and-billing process was eroding margins and more importantly, it was also eroding firm morale. Being a slave to a timesheet is not what the staff person of today is interested in doing. Eliminating timesheets and making the billing function a more administrative task has returned hundreds of production hours back to the firm — a statistic that is frequently overlooked. Staff happiness is a statistic that can’t be measured. However, ask staff and they will tell you that one of their least favorite things about public accounting is tracking their time.
Clients also appreciate fixed fees. It helps them measure the value that they are getting from a firm. It puts fees at the front end of the conversation and helps improve communications and expectations. Many firms already have ad-hoc fixed fee arrangements with a great number of their clients. Non-adopting firms feel the need to measure the value of the engagement on a time-and-materials basis, primarily because they don’t know what they don’t know. Moving away from the legacy system is a foreign and frightening proposition to them. Value-pricing adopters have been known to say “don’t knock it until you have tried it!”
Performance Achievement Systems
Evaluating staff has long been the Achilles heel of many firms. While most firms will tell you that retaining their most talented staff is as or more important than doing the same with clients, they seem to struggle with the right way to evaluate and reward them. Annual reviews are ineffective and loathsome and finding time to review staff after significant jobs is time consuming and inefficient.
Successful firms have realized the importance of building an achievement system that is tied to the overall annual goals of the firm. These firms identify annual goals for the firm and over communicate them to everyone. Based upon these goals, the firm provides the right organizational alignment and environment for all staff to understand their role and responsibility in achieving these goals. They develop a customized achievement plan for each staff member. The plans are brief and realistic. Expectations are clearly defined. The plans incorporate core competencies and values that the firm mandates and also includes individual targets for each staff. These targets are important to staff development and must be in proper alignment with the firm goals.
As a general rule, staff should be reviewed quarterly. Reviews should take no longer than 15 minutes to a half hour. This commitment to a well-defined process will help ensure that your firm achieves the results that it is looking for both financially and in the form of staff development.
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Tim Shortsleeve, CPA.CITP, is a partner at Bonn, Shortsleeve & Ray, LLP. He provides consulting services to businesses and CPA firms in the areas of process management and paperless technology. Bobbie Rosenberg, CPA, is a partner at Buller, Wuite, Lawlor, Olsson & Rosenberg, P.C. Her practice focuses on taxation of small businesses and consulting on process improvement. Shortsleeve and Rosenberg will be speaking at the AICPA Small Business Practitioners’ Tax Conference four-hour pre-conference workshop, The Firm of the Future Can be Your Firm Today!, in Coral Gables, FL., July 11-13.