February is often an odd month in my office. Many firms don’t want to do much at all as tax season heats up, while others are struggling with a last-minute panic and need something desperately.
Either way, I welcome February. As the snow builds up and the work slows down for a few weeks, it gives me a chance to ski, and I often take some time out in the month to reflect and do some strategic planning for my own business.
As I started doing some strategic thinking this year, a story from Christmas occurred to me that I thought you might like me to share with you.
It was around 22nd of December, and I was lining up at the grocery store with a cart full of groceries and seasonal goodies, when I noticed the people in front of me in the line. They were all young, about twenty years old, and the four of them moved their cart up to unload it on to the conveyor belt to transport it towards the cashier.
As they unloaded I couldn’t help but notice the contents of their cart. Dried noodles, packet after packet after packet, followed by soup packets and cans, one after the other again.
Then, of course, it was a pile of Kraft Dinner boxes, by the dozen. That gave it away for me. ‘Students!’ I thought to myself, obviously stocking up on Daddy’s credit card before going back to University.
But boy was I wrong.
As I passed my cornflakes, milk and some seasonal treats onto the cashier’s conveyor belt, I saw these four young men going through their wallets and pockets to come up with the $103.26 they had spent. They realized that they had two dollars spare, so one of them went and grabbed more soup to top up their spending.
With three cents change they all smiled at each other and I watched them as they pushed their cart – they got the one with the squeaky wheel that never goes in the same direction as the other three – and they emptied the contents of their cart into the food bank box behind the cashiers.
These guys had obviously spent their own cash and had been as careful to make sure that they bought the right stuff, and spent their entire budget, to make sure that those needier than themselves got to eat something this Christmas. It may not have been turkey and bread sauce, but damn it, these kids had heart.
I am not ashamed to tell you that it brought a lump to my throat.
Then I started thinking that this was a great example of the type of planning, budgeting and execution that we all need in our own businesses, but more often than not we are simply too busy to stop what we’re doing right now, that seems to be so important, to give some time and effort to the bigger picture.
Where is your practice right now? Where was it last year? Has it grown? Has it gone in a different direction? Where do you want your firm to be this time next year, in five years time, in ten?
These are often the issues we never talk about, even with ourselves. But we should.
When tax season is over and you have the 30th June filing deadlines behind you, please, take some time to plan where you want to take your firm in the future, and do the equivalent of what those kids at the grocery store did.
They got their team together, decided what they wanted to achieve, put a budget together, pooled their resources, set a deadline and worked together to gather the supplies.
They achieved their goal and then they went to the bar together to celebrate!
What a great example from four young men. Surely we, as a profession can do at least as well as them?
Wednesday, January 13, 2010
Friday, October 30, 2009
Second Post Today!
While I've posted something useful earlier today, I thought I'd take this opportunity to announce that my first Novel is well on its way to a first draft. It's a little unusual... as the hero (or heroes) is/are Accountant(s)!
I am yet to come across any novel where a CA or CPA is the hero, and in this book they're anything but boring, I assure you!
I am announcing this because I'd like your help.
I am looking for a few CAs and CPAs to review the first draft and give me some critical feedback to make it a better product.
Please contact me if you'd like to be involved.
I am yet to come across any novel where a CA or CPA is the hero, and in this book they're anything but boring, I assure you!
I am announcing this because I'd like your help.
I am looking for a few CAs and CPAs to review the first draft and give me some critical feedback to make it a better product.
Please contact me if you'd like to be involved.
Seven Steps To Seven Figures (Part Two)
Last issue we lookedat the first three steps to building a seven-figure billing practice and I promised you we’d take a look at the other four steps this time.
So, without further ado, here we go!Remember last issue, we covered;1. Innovation & the Use of Technology2. Staff Selection, Training & Delegation3. Client Selection
The remaining steps are;1. Valued-Added Services2. Pricing3. Financial Acumen4. Marketing
So, let’s look at these four steps now...
Value-Added Services
I have just returned to the office after two weeks on the road with CCH.
During the road show, I have had the privilege of working with Mark Holton, an Aussie, who pioneered the use of CCH Profit Driver down under, and was on tour with us as the ‘Profit Driver expert’. And it’s a title he deserves. As a user of Profit Driver myself, it was amazing to see Mark in action, showing accounting firms just what this amazing piece of software can do.
There are alternatives out there – Principa (Ric Payne’s network, he of Ran ONE fame) offer a similar financial dashboard tool, but Profit Driver is, in my opinion, easier to use and thus my weapon of choice.Clients come to us as practitioners to buy something that, in all honesty, they don’ really want, but have to have – the compliance package that we prepare for them every year – the financial statements and tax return.And every year, we deliver the same old package of information.
It looks exactly like last year’s package, the only difference being that the numbers and dates have changed. And every year we have to charge a little more for this service.
However, while the client is coming to you for this service each year, that’s not what they want from you!What clients really want, is help to be more successful or more profitable, and they look to you for help and advice in how to do so.
But in most cases, every year, we let them down.
Why?
Because we’re too busy to be able to spare the time to sit down with our better clients and talk with them about their goals and aspirations for their business.
Especially during tax season, when we get to see the majority of our clients, we simply have to get each client in and out as quickly as possible because the next client is waiting in reception to see us and we often feel that we’re on a treadmill, and it’s not fun.
Value-Added services are the way forward for the profession.
Imagine sitting down with a client and being able to show them the financial impact of any business decision they’re about to make, BEFORE they make that decision.
Do you think that is something they’d like to be able to do?
Do you think your clients would make better decisions if they did?
You bet!
Discussing situations like ‘what would happen if I put my prices up by 5% but lost 10% of my volume as a result?’ or ‘If I changed my policy and paid my payables one week later, what impact would that have on my cash flow, bank overdraft and interest charges, even if I lost my early settlement discount as a result?’
What about ‘how many extra units do I need to sell to make an extra $100,000 profit?’
Ladies and gentlemen, these are the big ticket questions your clients have but are afraid to ask, as they’re working under the impression that you’re just too darn busy already!
Every seven-figure practitioner fires their bad clients to create the time to offer value-added services to their better clients, and once they’ve done it, they never look back!
Pricing
Many practitioners have a fear of pricing, and so we run back to the old method of using our time and billing system as a pricing tool. Wrong!
Our time and billing system has nothing to do with pricing.
It is an activity based costing tool, NOT a pricing tool!Better to talk with a client and ask ‘What would it be worth to get.... done?’ (You can fill in the blanks depending on each client’s situation.)
The client will then tell you the value of the project as it appears to them, and you can price accordingly.
Now, of course, you can’t do that on every client project – that’s crazy – but you absolutely can do so on the ‘special work’ that we generate each year.Because of a bad pricing policy, most practitioners leave money on the table, and that holds them back from achieving seven figures.
Financial Acumen
You might think that, as accountants, we have a lot of financial acumen. Not necessarily so when it comes to running your own business.
Many firms I see still have huge piles of unfinished files in Partner’s offices.This is equivalent to covering your floor with money – unfinished files that are causing a bottleneck in getting work finished and billed.
We need to deploy a great financial acumen if we’re going to get to seven figures.
Marketing
Finally, we need to market ourselves far better. The seven-figure firms all do it well, bar none.Take a look at your web site, your logo, your business card. Do they excite the reader and get them interested in finding out more about your firm?
I’d wager that they don’t.
When did you last take out a Banker, a Lawyer, an Investment adviser to lunch and try to get to know them better and explain what you’re trying to do in your firm?
When did you last say no ‘thanks, but no thanks’ to a potential new client because they didn’t match the profile you’re looking for in new clients?When did you last hold an entertaining and informative seminar for clients and prospects?
While your web site might look boring, I bet that the content is often worse! Clients won’t be excited by the new budget summary being uploaded, but they might be inspired to hear a success story of one of your clients.
Do you have a marketing plan and budget? I guess most of you won’t. Yet the seven-figure firms do!Go figure!
Conclusion
In the time and space constraints of a column, I can only give you a taste of what can be achieved, but those who deploy some of these tactics in their strategy will be the ones who achieve success.
Firms who decide what their ideal client looks like and goes after that type of business, who categorize their clients into, for example, A, B, C and D, and then systematically fires their D clients case by case, who offer value-added services to their better clients and price them accordingly, based on value – these are the firms who will be tomorrow’s seven-figure firms.
Good luck to you all.
So, without further ado, here we go!Remember last issue, we covered;1. Innovation & the Use of Technology2. Staff Selection, Training & Delegation3. Client Selection
The remaining steps are;1. Valued-Added Services2. Pricing3. Financial Acumen4. Marketing
So, let’s look at these four steps now...
Value-Added Services
I have just returned to the office after two weeks on the road with CCH.
During the road show, I have had the privilege of working with Mark Holton, an Aussie, who pioneered the use of CCH Profit Driver down under, and was on tour with us as the ‘Profit Driver expert’. And it’s a title he deserves. As a user of Profit Driver myself, it was amazing to see Mark in action, showing accounting firms just what this amazing piece of software can do.
There are alternatives out there – Principa (Ric Payne’s network, he of Ran ONE fame) offer a similar financial dashboard tool, but Profit Driver is, in my opinion, easier to use and thus my weapon of choice.Clients come to us as practitioners to buy something that, in all honesty, they don’ really want, but have to have – the compliance package that we prepare for them every year – the financial statements and tax return.And every year, we deliver the same old package of information.
It looks exactly like last year’s package, the only difference being that the numbers and dates have changed. And every year we have to charge a little more for this service.
However, while the client is coming to you for this service each year, that’s not what they want from you!What clients really want, is help to be more successful or more profitable, and they look to you for help and advice in how to do so.
But in most cases, every year, we let them down.
Why?
Because we’re too busy to be able to spare the time to sit down with our better clients and talk with them about their goals and aspirations for their business.
Especially during tax season, when we get to see the majority of our clients, we simply have to get each client in and out as quickly as possible because the next client is waiting in reception to see us and we often feel that we’re on a treadmill, and it’s not fun.
Value-Added services are the way forward for the profession.
Imagine sitting down with a client and being able to show them the financial impact of any business decision they’re about to make, BEFORE they make that decision.
Do you think that is something they’d like to be able to do?
Do you think your clients would make better decisions if they did?
You bet!
Discussing situations like ‘what would happen if I put my prices up by 5% but lost 10% of my volume as a result?’ or ‘If I changed my policy and paid my payables one week later, what impact would that have on my cash flow, bank overdraft and interest charges, even if I lost my early settlement discount as a result?’
What about ‘how many extra units do I need to sell to make an extra $100,000 profit?’
Ladies and gentlemen, these are the big ticket questions your clients have but are afraid to ask, as they’re working under the impression that you’re just too darn busy already!
Every seven-figure practitioner fires their bad clients to create the time to offer value-added services to their better clients, and once they’ve done it, they never look back!
Pricing
Many practitioners have a fear of pricing, and so we run back to the old method of using our time and billing system as a pricing tool. Wrong!
Our time and billing system has nothing to do with pricing.
It is an activity based costing tool, NOT a pricing tool!Better to talk with a client and ask ‘What would it be worth to get.... done?’ (You can fill in the blanks depending on each client’s situation.)
The client will then tell you the value of the project as it appears to them, and you can price accordingly.
Now, of course, you can’t do that on every client project – that’s crazy – but you absolutely can do so on the ‘special work’ that we generate each year.Because of a bad pricing policy, most practitioners leave money on the table, and that holds them back from achieving seven figures.
Financial Acumen
You might think that, as accountants, we have a lot of financial acumen. Not necessarily so when it comes to running your own business.
Many firms I see still have huge piles of unfinished files in Partner’s offices.This is equivalent to covering your floor with money – unfinished files that are causing a bottleneck in getting work finished and billed.
We need to deploy a great financial acumen if we’re going to get to seven figures.
Marketing
Finally, we need to market ourselves far better. The seven-figure firms all do it well, bar none.Take a look at your web site, your logo, your business card. Do they excite the reader and get them interested in finding out more about your firm?
I’d wager that they don’t.
When did you last take out a Banker, a Lawyer, an Investment adviser to lunch and try to get to know them better and explain what you’re trying to do in your firm?
When did you last say no ‘thanks, but no thanks’ to a potential new client because they didn’t match the profile you’re looking for in new clients?When did you last hold an entertaining and informative seminar for clients and prospects?
While your web site might look boring, I bet that the content is often worse! Clients won’t be excited by the new budget summary being uploaded, but they might be inspired to hear a success story of one of your clients.
Do you have a marketing plan and budget? I guess most of you won’t. Yet the seven-figure firms do!Go figure!
Conclusion
In the time and space constraints of a column, I can only give you a taste of what can be achieved, but those who deploy some of these tactics in their strategy will be the ones who achieve success.
Firms who decide what their ideal client looks like and goes after that type of business, who categorize their clients into, for example, A, B, C and D, and then systematically fires their D clients case by case, who offer value-added services to their better clients and price them accordingly, based on value – these are the firms who will be tomorrow’s seven-figure firms.
Good luck to you all.
Sunday, September 13, 2009
Seven Steps To Seven Figures (Part 1 of 2)
Back in the day, the ‘Million Dollar Practice’ was a big thing; it was an achievement of note, setting the practitioner apart from his or her competitors.
A ‘million dollar firm’ would have been a practice that dominated its local marketplace and allow the owner to gain real financial freedom.
But almost twenty years after people like Dave Cottle and Chris Fredericksen first spoke and wrote about the million-dollar practice, seven figure billings are now being achieved by many progressive sole practitioners.
I have clients, for example, yes, sole practitioners, who bill over $2.5m in fees each year. How do they do it? Well, we’ll get to that a little later.
Funnily enough, all of these million dollar (plus) practitioners have seven key attributes in common. And today I will share them with you.
If a seven figure firm is relatively easy to build today, why do the vast majority of sole practitioners tend to ‘flat line’ at billings somewhere between $400,000 and $600,000 a year? What is needed to project a firm from 6- to 7-figures?
Well, let me explain…
I won’t pretend that it’s quick or easy, but it is definitely possible!
Before we look at the seven steps, there are 4 other things they (mostly) do which can be layered over all seven steps.
a) Planning
b) Monitoring/Recording/Keeping Score
c) Amending
First of all, each and every one of them that I know plans. They prepare a business plan for their firm, as they would for a client.
Then, they monitor their performance against the plan and look for areas where they did not achieve their goals.
Next, they then try to determine why that was, then they amend their plan for the next period (usually quarterly) and move ahead. Where goals were exceeded, they examine what went well and why and try to take any learnings from this that could be applied to other areas of the firm.
If you look at the seven steps, you will probably agree, that all three layers can apply to all seven steps.
So, let’s take a look at these steps now.
1. The Desire to Innovate & The Use of Technology.
Public accounting is not known for its ability to be creative. Indeed, it has been a long time since the profession introduced a new service to the marketplace. It was probably the ‘Review’ engagement if my memory serves me right.
However, some firms have been very innovative by bundling services together to create tangible ‘products’ from what were previously considered intangible services, and priced them accordingly.
The other side of the innovation step, is that all of the 7-figure firms were obsessively upgrading their software and hardware – fully embracing technology as a tool that enabled them to exist in the way they do, rather than seeing I.T. as simply another cost-centre, to be contained and reduced at all cost.
The savvy firms assessed each I.T. investment opportunity by saying to themselves “What will this do for us? What will it do for our clients? What does the cost/benefit analysis tell us?” before making any major decision, but if the numbers stacked up, they always invested.
All of the firms I know of now have scanning and auto-flow software for their clients’ tax return preparation, taking the prep time per tax return tumbling down.
2. Staff Selection, Training & Delegation
‘Will this person fit in around here?’ is how most potential employees are assessed at interview. There is little focus on their accounting or tax ability. To paraphrase Jim Collins in Good To Great, their mentality is ‘get the right people on the bus and together they will determine where to drive it.’
Then, the owner has to have the strength of character to delegate work to these people - preferably to their level of incompetence (A sort of twist on the ‘Peter Principle’).
In other words, give people work that they’ve never done before and they’ll learn new skills.
They’ll grow professionally and it will be a better place for everyone to work. Provide excellent training and coach and mentor your people – one of them has to become your successor!
3. Client Selection
This really is a major point. For the most part, 7-figure sole practitioners only work with clients that:
a) Actually want and appreciate your services
b) See the value in what you’re doing for them
c) Have the money to pay the level of fees you want to charge
d) Have an ability to make referrals to similar people
e) Are fun to deal with – they’re people you actually like
Some firms like to establish a niche market to establish ‘top-dollar-rates’ (see the section on marketing in the next issue) while others just want to be seen as the premier firm to deal with , and price their services accordingly.
Clients who do not want to pay the extra because they do not see the value are clearly not the type of client that they will want to deal with so they have the courage to say ‘NO’ to these business people.
Imagine that!
Seriously, this is another very important point.
Indeed, if you have any existing clients you’d sooner not deal with, then you need to fire them before you have any real chance of moving forward.
The other 4 steps are:
1. Value-Added Services
2. Pricing
3. Financial Acumen
4. Marketing
And we will cover these issues next time.
Back in the day, the ‘Million Dollar Practice’ was a big thing; it was an achievement of note, setting the practitioner apart from his or her competitors.
A ‘million dollar firm’ would have been a practice that dominated its local marketplace and allow the owner to gain real financial freedom.
But almost twenty years after people like Dave Cottle and Chris Fredericksen first spoke and wrote about the million-dollar practice, seven figure billings are now being achieved by many progressive sole practitioners.
I have clients, for example, yes, sole practitioners, who bill over $2.5m in fees each year. How do they do it? Well, we’ll get to that a little later.
Funnily enough, all of these million dollar (plus) practitioners have seven key attributes in common. And today I will share them with you.
If a seven figure firm is relatively easy to build today, why do the vast majority of sole practitioners tend to ‘flat line’ at billings somewhere between $400,000 and $600,000 a year? What is needed to project a firm from 6- to 7-figures?
Well, let me explain…
I won’t pretend that it’s quick or easy, but it is definitely possible!
Before we look at the seven steps, there are 4 other things they (mostly) do which can be layered over all seven steps.
a) Planning
b) Monitoring/Recording/Keeping Score
c) Amending
First of all, each and every one of them that I know plans. They prepare a business plan for their firm, as they would for a client.
Then, they monitor their performance against the plan and look for areas where they did not achieve their goals.
Next, they then try to determine why that was, then they amend their plan for the next period (usually quarterly) and move ahead. Where goals were exceeded, they examine what went well and why and try to take any learnings from this that could be applied to other areas of the firm.
If you look at the seven steps, you will probably agree, that all three layers can apply to all seven steps.
So, let’s take a look at these steps now.
1. The Desire to Innovate & The Use of Technology.
Public accounting is not known for its ability to be creative. Indeed, it has been a long time since the profession introduced a new service to the marketplace. It was probably the ‘Review’ engagement if my memory serves me right.
However, some firms have been very innovative by bundling services together to create tangible ‘products’ from what were previously considered intangible services, and priced them accordingly.
The other side of the innovation step, is that all of the 7-figure firms were obsessively upgrading their software and hardware – fully embracing technology as a tool that enabled them to exist in the way they do, rather than seeing I.T. as simply another cost-centre, to be contained and reduced at all cost.
The savvy firms assessed each I.T. investment opportunity by saying to themselves “What will this do for us? What will it do for our clients? What does the cost/benefit analysis tell us?” before making any major decision, but if the numbers stacked up, they always invested.
All of the firms I know of now have scanning and auto-flow software for their clients’ tax return preparation, taking the prep time per tax return tumbling down.
2. Staff Selection, Training & Delegation
‘Will this person fit in around here?’ is how most potential employees are assessed at interview. There is little focus on their accounting or tax ability. To paraphrase Jim Collins in Good To Great, their mentality is ‘get the right people on the bus and together they will determine where to drive it.’
Then, the owner has to have the strength of character to delegate work to these people - preferably to their level of incompetence (A sort of twist on the ‘Peter Principle’).
In other words, give people work that they’ve never done before and they’ll learn new skills.
They’ll grow professionally and it will be a better place for everyone to work. Provide excellent training and coach and mentor your people – one of them has to become your successor!
3. Client Selection
This really is a major point. For the most part, 7-figure sole practitioners only work with clients that:
a) Actually want and appreciate your services
b) See the value in what you’re doing for them
c) Have the money to pay the level of fees you want to charge
d) Have an ability to make referrals to similar people
e) Are fun to deal with – they’re people you actually like
Some firms like to establish a niche market to establish ‘top-dollar-rates’ (see the section on marketing in the next issue) while others just want to be seen as the premier firm to deal with , and price their services accordingly.
Clients who do not want to pay the extra because they do not see the value are clearly not the type of client that they will want to deal with so they have the courage to say ‘NO’ to these business people.
Imagine that!
Seriously, this is another very important point.
Indeed, if you have any existing clients you’d sooner not deal with, then you need to fire them before you have any real chance of moving forward.
The other 4 steps are:
1. Value-Added Services
2. Pricing
3. Financial Acumen
4. Marketing
And we will cover these issues next time.
Thursday, April 10, 2008
FREE audio CD: "A World Of Choice - Now You've Passed The UFE, What's Next?"
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An hour long discussion with Steve McIntyre-Smith about all your career options now you're about to become a CA.
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An hour long discussion with Steve McIntyre-Smith about all your career options now you're about to become a CA.
Claim your own FREE copy today!
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Please note - Inclomplete registrations will be ignored.
Topics covered include:
- Should I stay where I am or move on?
- Do I stay in public accounting or go into industry?
- Do need to work for a large firm, mid-tier firm or a smaller firm?
- Where do I want my career to go in the long run?
- How do I get to Partner level?
- What should I expect when I get there?
- Show me the money!
- What can I expect to earn as my career develops?
- What about specializing?
- Do I need to pick a specialty right now or can it wait?
- What if I stay where I am for now, what can I expect?
- and much, much more!
A priceless aide to helping you see through the fog that surrounds the newly qualified CA.
Listen to an objective opinion from Canada's leading public accounting expert, Steve McIntyre-Smith, and then you be the judge!
Available December 2008.
To reserve your FREE copy, Click here, and include your full name, employer, delivery address for us to mail the CD to, and a daytime telephone number.
In order to receive this, you must have written the UFE in the last 2 years, that is why we need you to confirm your employer - we will NOT be calling your employer - but we will verify your status online with the Institute and our own database.
When sending your registration email, please include your name, the firm you work for, work address, daytime telephone number and home address for delivery of the cd. Inclomplete registrations will be ignored.
Click here to ensure you get your FREE CD.
“How can my small firm compete with the big four on salaries?”
It’s a good question, and one I am frequently asked by client firms who engage my firm to find professional staff for them.
In actual fact, in today’s market, the smaller practitioner is often not as disadvantaged as they might, at first, assume, particularly at the lower end of the salary scale.
Indeed, some of my clients, public accounting firms just like yours, have decided to give themselves a distinct advantage by paying more than the big four.
In the end, it usually doesn’t cost any more than paying market rate, as someone who knows they are getting paid more than they would usually be paid elsewhere often works that little bit hard and that little bit smarter. The combined effect can sometimes be that their effective cost per hour to the firm is similar to an ‘average’ team member putting in an ‘average’ week.
In addition to this, smaller firms are often more flexible as they can accommodate the needs of ‘return to work Moms’ by offering flexible hours or remote access to their system allowing them to work from home a couple of days a week.
It also depends on the type of environment you’ve worked hard to create at the firm.
A big, faceless, corporate firm can sometimes feel cold and clinical. Partners in bigger firms can sometimes treat their clients as if they were their own personal piggy banks – generating fees when in need of cash.
Contrast that relationship to the one in a smaller firm, where the receptionist knows the names of the clients children (often because they share the same school or hockey team) and where the person answering the phone knows which client is calling before they’ve said a word, or before they look at caller display, just y the way they’re breathing!
In a smaller firm, there tends to be a strong feeling of community among the staff and even with the Partners, as they all work closely together.
At the bigger firms, some Partners might not even know the names of some of their staff!
All of this adds up to create a real team environment, where everyone’s contribution is valuable.
And because everyone’s contribution is valuable, all staff gets recognition for their efforts during the year.
The anonymity that sometimes comes with a bigger firm again can often work against them, as people want to be recognized for their good work and effort. In huge offices with several hundred staff it’s sometimes difficult to get noticed, no matter how good your work is.
Let’s look at a typical example. Let’s call the candidate Michael.
Michael was a hard working CA in a national firm who worked for a Partner who was, to put it mildly, something of an egomaniac.
Michael had some great ideas, and, of course, he would share them with the Partner he worked directly with. However, even though several of his ideas were adopted as firm policy, Michael never received any credit for them. He didn’t receive any positive comments about these in his annual review either.
After a couple of years of this happening, Michael raised this point with the Human Resources manager conducting his annual review, who was shocked that Michael would be so bold as to claim some of his partner’s great ideas were in fact, his!
Despite Michael’s protests at his innocence, he became branded as a trouble maker!
Well, suffice to say that Michael decided to leave the big four firm that had been his employer for eight years, and he joined a smaller outfit. He quickly became a key figure in the firm’s management team, and after just three years, was recently promoted to Partner.
Now, of course, not all Partners in big firms take credit for their team members’ ideas, but it’s not the first time I have heard of this happening either.
Other ways smaller firms can compete with the bigger firms is the intimate relationships we are able to develop with our clients in smaller firms. We tend to know them much better, become involved in their business decision making more closely and some of our clients even become friends.
Rarely does a smaller firm have to implement lay-offs. Not so with the bigger firms. When a multi-million dollar audit is lost, the Partners are faced with a choice:
· Keep the firm staffed at its present rate, despite a lack of work and find new business to fill the void, or
· Let go enough staff to cover the losses and re-hire later if they find new business.
It’s not an easy choice for some.
Even though they may prefer not to let people go, they have personal financial commitments which they would like to continue to be able to honour (kids at university etc) and so more often than not the axe falls on the last few hundred recruited not so long ago.
But what happens if they let too many go? Although they may preach ‘work/life balance’ few actually practice what they preach, and thus the team working for them feels obliged to arrive early and work late too.
The smaller firms rarely find themselves in this sort of predicament.
Another point where smaller firms win big, is in the variety of work enjoyed by staff. I have seen several brand new CAs at one of the large firms (who will remain nameless) not know what to do with a ‘Quickbooks’ file, because their entire career has been spent auditing Billion-dollar corporations, and they have only seen payable for six months on one audit, then onto fixed Assets for three months at the next client and then payables for three months at the next.
This type of CA is often, in my humble opinion, dangerous. They simply are not well rounded enough to be any use in a smaller firm, and should they make a move into one, they will probably struggle for the first few months.
I am old enough to remember the hand written extended trial balance.
The invention of a psychopathically sick mathematical genius, it really did ‘sort men out from the boys’ (or the women from the girls) as far as identifying who had a real grasp of double-entry bookkeeping and who did not.
I fear that some new CAs wouldn’t know where to start on smaller client files and as far as ‘T’ accounts are concerned, well, it might as well be in Greek!
Most people who ‘grow up’ in smaller firms are better technicians at the stuff that really matters for the owner-managed client. Yet it is a selling point for why a candidate should join a smaller firm that is rarely capitalized upon.
So, if you run a smaller practice, and you’re feeling insecure about ‘selling’ your firm to a candidate, shake of those insecurities and remember all the great things that led you into your role today:
· Work/Life Balance is more likely to be attained in a smaller firm
· Paying higher salaries but working a little smarter can mean everyone wins
· A better all round grounding in accounting can be achieved in a smaller firm
· You get to know the clients far better and build real relationships in smaller firms
· You get to know the Partners at smaller firms better, and they get to know you too
· Flexibility in working from home or flexi-hours is more achievable
· Great training for future Partners
· First-hand experience in a wider range of projects
· Better tax experience compared to an audit staff member in a bigger firm
I could (and often do) go on, but I think you get the picture by now.
While sometimes the bigger firms simply write bigger cheques, money isn’t everything.
There is no real reason why a smaller firm cannot compete on salary alone, but they can also create a more compelling case for joining them than a bigger firm could – unless the candidate simply wants to stay in audit for the rest of their career.
In actual fact, in today’s market, the smaller practitioner is often not as disadvantaged as they might, at first, assume, particularly at the lower end of the salary scale.
Indeed, some of my clients, public accounting firms just like yours, have decided to give themselves a distinct advantage by paying more than the big four.
In the end, it usually doesn’t cost any more than paying market rate, as someone who knows they are getting paid more than they would usually be paid elsewhere often works that little bit hard and that little bit smarter. The combined effect can sometimes be that their effective cost per hour to the firm is similar to an ‘average’ team member putting in an ‘average’ week.
In addition to this, smaller firms are often more flexible as they can accommodate the needs of ‘return to work Moms’ by offering flexible hours or remote access to their system allowing them to work from home a couple of days a week.
It also depends on the type of environment you’ve worked hard to create at the firm.
A big, faceless, corporate firm can sometimes feel cold and clinical. Partners in bigger firms can sometimes treat their clients as if they were their own personal piggy banks – generating fees when in need of cash.
Contrast that relationship to the one in a smaller firm, where the receptionist knows the names of the clients children (often because they share the same school or hockey team) and where the person answering the phone knows which client is calling before they’ve said a word, or before they look at caller display, just y the way they’re breathing!
In a smaller firm, there tends to be a strong feeling of community among the staff and even with the Partners, as they all work closely together.
At the bigger firms, some Partners might not even know the names of some of their staff!
All of this adds up to create a real team environment, where everyone’s contribution is valuable.
And because everyone’s contribution is valuable, all staff gets recognition for their efforts during the year.
The anonymity that sometimes comes with a bigger firm again can often work against them, as people want to be recognized for their good work and effort. In huge offices with several hundred staff it’s sometimes difficult to get noticed, no matter how good your work is.
Let’s look at a typical example. Let’s call the candidate Michael.
Michael was a hard working CA in a national firm who worked for a Partner who was, to put it mildly, something of an egomaniac.
Michael had some great ideas, and, of course, he would share them with the Partner he worked directly with. However, even though several of his ideas were adopted as firm policy, Michael never received any credit for them. He didn’t receive any positive comments about these in his annual review either.
After a couple of years of this happening, Michael raised this point with the Human Resources manager conducting his annual review, who was shocked that Michael would be so bold as to claim some of his partner’s great ideas were in fact, his!
Despite Michael’s protests at his innocence, he became branded as a trouble maker!
Well, suffice to say that Michael decided to leave the big four firm that had been his employer for eight years, and he joined a smaller outfit. He quickly became a key figure in the firm’s management team, and after just three years, was recently promoted to Partner.
Now, of course, not all Partners in big firms take credit for their team members’ ideas, but it’s not the first time I have heard of this happening either.
Other ways smaller firms can compete with the bigger firms is the intimate relationships we are able to develop with our clients in smaller firms. We tend to know them much better, become involved in their business decision making more closely and some of our clients even become friends.
Rarely does a smaller firm have to implement lay-offs. Not so with the bigger firms. When a multi-million dollar audit is lost, the Partners are faced with a choice:
· Keep the firm staffed at its present rate, despite a lack of work and find new business to fill the void, or
· Let go enough staff to cover the losses and re-hire later if they find new business.
It’s not an easy choice for some.
Even though they may prefer not to let people go, they have personal financial commitments which they would like to continue to be able to honour (kids at university etc) and so more often than not the axe falls on the last few hundred recruited not so long ago.
But what happens if they let too many go? Although they may preach ‘work/life balance’ few actually practice what they preach, and thus the team working for them feels obliged to arrive early and work late too.
The smaller firms rarely find themselves in this sort of predicament.
Another point where smaller firms win big, is in the variety of work enjoyed by staff. I have seen several brand new CAs at one of the large firms (who will remain nameless) not know what to do with a ‘Quickbooks’ file, because their entire career has been spent auditing Billion-dollar corporations, and they have only seen payable for six months on one audit, then onto fixed Assets for three months at the next client and then payables for three months at the next.
This type of CA is often, in my humble opinion, dangerous. They simply are not well rounded enough to be any use in a smaller firm, and should they make a move into one, they will probably struggle for the first few months.
I am old enough to remember the hand written extended trial balance.
The invention of a psychopathically sick mathematical genius, it really did ‘sort men out from the boys’ (or the women from the girls) as far as identifying who had a real grasp of double-entry bookkeeping and who did not.
I fear that some new CAs wouldn’t know where to start on smaller client files and as far as ‘T’ accounts are concerned, well, it might as well be in Greek!
Most people who ‘grow up’ in smaller firms are better technicians at the stuff that really matters for the owner-managed client. Yet it is a selling point for why a candidate should join a smaller firm that is rarely capitalized upon.
So, if you run a smaller practice, and you’re feeling insecure about ‘selling’ your firm to a candidate, shake of those insecurities and remember all the great things that led you into your role today:
· Work/Life Balance is more likely to be attained in a smaller firm
· Paying higher salaries but working a little smarter can mean everyone wins
· A better all round grounding in accounting can be achieved in a smaller firm
· You get to know the clients far better and build real relationships in smaller firms
· You get to know the Partners at smaller firms better, and they get to know you too
· Flexibility in working from home or flexi-hours is more achievable
· Great training for future Partners
· First-hand experience in a wider range of projects
· Better tax experience compared to an audit staff member in a bigger firm
I could (and often do) go on, but I think you get the picture by now.
While sometimes the bigger firms simply write bigger cheques, money isn’t everything.
There is no real reason why a smaller firm cannot compete on salary alone, but they can also create a more compelling case for joining them than a bigger firm could – unless the candidate simply wants to stay in audit for the rest of their career.
Monday, January 21, 2008
A Wake Up Call For The Profession.
953.
A scientific formulae? Last week’s winning lottery numbers? Part of a phone number? Or, the meaning of life?
Nope.
It’s the number of successful UFE writers in Ontario this year. In all of Canada there were 2,327 successful candidates.
It seems the number of new UFE passers gets smaller and smaller each year, or at best has levelled out to a similar number to last year.
Why is it that such a rewarding profession that offers such variety of projects and interesting clients to work with cannot produce sufficient numbers of new CAs to meet demand?
Of course, a large number of these new CAs, when they get their thirty months experience in and become members, will move out of public accounting and into posts in industry, local government, academia, or apparently anything else but public accounting.
It’s a chronic problem that is getting worse with each year.
The CICA’s own statistics tell us that 26% of all members are in small to medium sized practices. Of these members, 46% are aged 55 or more.
So what does that tell us?
In ten years time there will be a dramatic increase in the number of practitioners looking to exit public accounting, at the same time when there are fewer and fewer potential buyers (CAs with around ten years experience – the typical stage at which members are starting to think about buying a block of fees or a practice).
So, remember back to your Economics 101 course. What happens to price when supply goes up and demand goes down?
Yes, it drops like a grand piano from a twelfth floor balcony!
Not good for those readers building a practice with a view to exiting in 10 years time.
I think the root cause of the problem is how we market the profession to University students and also to clients, and the public at large.
As Partners, many also set a poor example to their staff; in early, the last to leave, working weekends, stress-related illnesses, second or third marriage, and then they turn around to their seniors and say ‘If you play your cards right, one day all this can be yours!’
Little wonder, then that many decide that their future is not in public accounting long term.
It’s also connected to how accounting professionals market themselves.
When asked what they do for a living, many CAs will respond ‘I’m a CA’. Such a typical response doesn’t even answer the question! ‘I’m a CA’ is what you are, not what you do!
Better to answer that question with something a little more interesting, or head-turning.
‘I’m a tax cheat’ might not get the blessing of your professional body, but it will certainly get the interest of the person asking the question. There must be a better way.
If you work with owner-managers with the underlying purpose of helping them build their business so that they can sell out for a million dollars or more, then maybe you could answer the dreaded question ‘what do you do?’ with: ‘I help make millionaires!’
Now, as a client, you’d have my interest!
We, as a profession, are competing directly with Engineering and Sciences, Oil & Gas, The Law, Dentistry and many other career options for today’s ‘bright young things’.
And when compared to these, the ‘stereotypical accountant’ image we have inadvertently created doesn’t look very exciting. Indeed it looks how it is meant to – boring.
I say it is time for dramatic action.
It’s time to shake off the shackles we have created for ourselves.
It’s time to re-engineer our firms, how we work with clients, the value we add to businesses, the hours we put in and how we’re compensated for our efforts.
Of course, a part of our work is of a mundane nature. It’s a part of the job, but it doesn’t ALL have to be mundane.
I am very fortunate to work with some very visionary firms, who have worked very hard to create an environment of ‘fun’ at the office and an OAF philosophy (Out At Five).
Indeed, at the time of writing this, I just returned from a client who has a massive staff room in their Ottawa office, where they have a full sized pool table and have office pool tournaments, and they have a ping-pong table for the staff to boot. But even they have difficulty in attracting high calibre talent.
If firms like this struggle (which was why I was there in the first place) just imagine how ‘ordinary’ firms cope.
My point is that from our professional bodies right down to the new entrant to public accounting, we have a duty to recreate a new public image of ourselves, for the sake of the future of our great profession.
Accounting is exciting, it offers variety, it offers financial security for its practitioners at all levels and it’s, yes, sexy!
My challenge to you as we start 2008, whether you’re the president of the Institute or a new student is this; what are you prepared to do to reposition the accounting profession as an exciting career option that will attract quality people in greater numbers and start, ever so slowly, to turn the public perception of accounting around, so that it is seen as a thoroughly rewarding, exciting and varied calling that offers unlimited potential to those who choose to enter?
A scientific formulae? Last week’s winning lottery numbers? Part of a phone number? Or, the meaning of life?
Nope.
It’s the number of successful UFE writers in Ontario this year. In all of Canada there were 2,327 successful candidates.
It seems the number of new UFE passers gets smaller and smaller each year, or at best has levelled out to a similar number to last year.
Why is it that such a rewarding profession that offers such variety of projects and interesting clients to work with cannot produce sufficient numbers of new CAs to meet demand?
Of course, a large number of these new CAs, when they get their thirty months experience in and become members, will move out of public accounting and into posts in industry, local government, academia, or apparently anything else but public accounting.
It’s a chronic problem that is getting worse with each year.
The CICA’s own statistics tell us that 26% of all members are in small to medium sized practices. Of these members, 46% are aged 55 or more.
So what does that tell us?
In ten years time there will be a dramatic increase in the number of practitioners looking to exit public accounting, at the same time when there are fewer and fewer potential buyers (CAs with around ten years experience – the typical stage at which members are starting to think about buying a block of fees or a practice).
So, remember back to your Economics 101 course. What happens to price when supply goes up and demand goes down?
Yes, it drops like a grand piano from a twelfth floor balcony!
Not good for those readers building a practice with a view to exiting in 10 years time.
I think the root cause of the problem is how we market the profession to University students and also to clients, and the public at large.
As Partners, many also set a poor example to their staff; in early, the last to leave, working weekends, stress-related illnesses, second or third marriage, and then they turn around to their seniors and say ‘If you play your cards right, one day all this can be yours!’
Little wonder, then that many decide that their future is not in public accounting long term.
It’s also connected to how accounting professionals market themselves.
When asked what they do for a living, many CAs will respond ‘I’m a CA’. Such a typical response doesn’t even answer the question! ‘I’m a CA’ is what you are, not what you do!
Better to answer that question with something a little more interesting, or head-turning.
‘I’m a tax cheat’ might not get the blessing of your professional body, but it will certainly get the interest of the person asking the question. There must be a better way.
If you work with owner-managers with the underlying purpose of helping them build their business so that they can sell out for a million dollars or more, then maybe you could answer the dreaded question ‘what do you do?’ with: ‘I help make millionaires!’
Now, as a client, you’d have my interest!
We, as a profession, are competing directly with Engineering and Sciences, Oil & Gas, The Law, Dentistry and many other career options for today’s ‘bright young things’.
And when compared to these, the ‘stereotypical accountant’ image we have inadvertently created doesn’t look very exciting. Indeed it looks how it is meant to – boring.
I say it is time for dramatic action.
It’s time to shake off the shackles we have created for ourselves.
It’s time to re-engineer our firms, how we work with clients, the value we add to businesses, the hours we put in and how we’re compensated for our efforts.
Of course, a part of our work is of a mundane nature. It’s a part of the job, but it doesn’t ALL have to be mundane.
I am very fortunate to work with some very visionary firms, who have worked very hard to create an environment of ‘fun’ at the office and an OAF philosophy (Out At Five).
Indeed, at the time of writing this, I just returned from a client who has a massive staff room in their Ottawa office, where they have a full sized pool table and have office pool tournaments, and they have a ping-pong table for the staff to boot. But even they have difficulty in attracting high calibre talent.
If firms like this struggle (which was why I was there in the first place) just imagine how ‘ordinary’ firms cope.
My point is that from our professional bodies right down to the new entrant to public accounting, we have a duty to recreate a new public image of ourselves, for the sake of the future of our great profession.
Accounting is exciting, it offers variety, it offers financial security for its practitioners at all levels and it’s, yes, sexy!
My challenge to you as we start 2008, whether you’re the president of the Institute or a new student is this; what are you prepared to do to reposition the accounting profession as an exciting career option that will attract quality people in greater numbers and start, ever so slowly, to turn the public perception of accounting around, so that it is seen as a thoroughly rewarding, exciting and varied calling that offers unlimited potential to those who choose to enter?
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