Art of Accounting: Critical issues in running an accounting business
I wrote a column earlier this month about the critical issues involved in running a small accounting firm. My column identified four critical issues based on the views of the 11 firms and 17 people attending my two virtual joint retreats. They are: staffing, how owners and partners spent their time, pricing and technology. Accounting Today‘s 2021 Year Ahead survey from December 2020 identified the critical issues in this order:
- Keeping up with regulatory change;
- Pandemic-related issues.
- Economic health of clients;
- Acquiring and retaining new clients;
- Keeping up with technology; and
- Recruiting/retaining good employees.
Two of my four weren’t even on the list and my top issue of staffing was at the bottom of the survey.
Here are some reasons that could account for the differences. The timing of the surveys could have influenced the responses just as the job positions or where the respondents worked. My respondents were owners of seven and partners in four practices. The largest had 35 total people and the smallest had three. Each ran a successful practice, and they were looking for some ideas to make it better. The goal of the participants was to plan for the future and develop a strategic plan for where they might be in five years. The focus was on big picture issues. They did not want to devote any of the considerable time of the retreat to diss about current problems. They drew on many issues, all of which were on the survey but settled on what they felt were the overriding impediments to the success they wanted, which was to make more money, have more fun, service clients better, and grow the value of their practices.
The most critical issue by far was staffing: recruiting, training, retaining and developing their staff. I agreed with this selection. No practice could grow or meet the retreat mission without the right staff doing the right things the right way and developing in ways that would help the practice and owners grow. The next critical issue they all agreed on was how they spent their time. Isn’t time our most valuable and important commodity? Shouldn’t we be selfish about how we choose to spend our time and shouldn’t we be doing the things that are worthy of us spending time on and not on what is foisted upon us by others’ inefficiencies, neglect, carelessness or lack of planning?
The next two critical issues were split among the groups. The solos wanted to discuss pricing. To me that is a key part of running a business. While they each felt they were charging the right fees, they had no way of knowing if they left money on the table. The partnership group chose to discuss better integrating technology into their practices. They all had well-known systems and had attended training sessions, but none were grabbing the full power of what they had. This discussion was more about using the technology for practice management than for client services. We had about three hours in each retreat to discuss the three issues, with unequal time spent on each issue as the discussion evolved.
I think they chose wisely and know they all benefited and got valuable takeaways to bring back to their practices.
I do not think the top three issues in the survey are big picture issues. The fourth of acquiring and retaining new clients is a big picture issue, but it was deemed not as critical as the ones that were chosen by my groups. Getting and retaining clients is a huge concern, but not a problem for any of the participants, except one, but he acquiesced in the choices and was a lively participant, as they all were. Keep in mind that my sample is much smaller than the survey respondents, but I believe the choices at the retreats were the right ones and reflect what I can tell are the most critical issues from the 300 to 400 calls I receive each year from colleagues.
My dear reader, if you own or partner in an accounting firm, what are the big issues you need to confront as you try to grow? Think about it, and I suggest you write them down and ponder their importance in affecting the health of your practice in five years. You have eight issues described in this column. Try to choose from these, or here is a link to a column mentioning 30 issues, and pick from there.
If you disagree with me, then I would consider it a favor if you emailed me and provided your phone number so I could call you and find out why and also what is working for you.
Do not hesitate to contact me at emendlowitz@withum.com with your practice management questions or about engagements you might not be able to perform.
Edward Mendlowitz, CPA, is partner at WithumSmith+Brown, PC, CPAs. He is on the Accounting Today Top 100 Influential People list. He is the author of 24 books, including “How to Review Tax Returns,” co-written with Andrew D. Mendlowitz, and “Managing Your Tax Season, Third Edition.” He also writes a twice-a-week blog addressing issues that clients have at www.partners-network.com along with the Pay-Less-Tax Man blog for Bottom Line. He is an adjunct professor in the MBA program at Fairleigh Dickinson University teaching end user applications of financial statements. Art of Accounting is a continuing series where he shares autobiographical experiences with tips that he hopes can be adopted by his colleagues. He welcomes practice management questions and can be reached at (732) 743-4582 or emendlowitz@withum.com.
