Art of Accounting: Building wealth

CPAs do very good jobs helping clients build wealth, but many do not do so good with themselves. Here are some tips to help you grow your wealth.

• Charge the right fees. You can price your services however you want and have different fee structures for different clients or client groups, but at the end of the year you should have made enough to cover your living costs, fully fund your retirement account, have funds to grow your infrastructure and perhaps some profits left over. The first three are mandatory, while the last is desired. If you fall short, then your fees, in the aggregate, are inadequate and must increase. One way is to simply increase all fees by the percentage you need to make it come out right. There are other ways, but I’ll leave that to you. The takeaway is to cover the first three parts of making a living, funding your retirement plan and strengthening your infrastructure.
• Work on organic growth. This means never losing a client, increasing fees regularly to cover your increased costs and providing added, and needed, services to your clients. This takes effort, making sure you have satisfied clients, some creativity and the ability to show clients the value to them of the added services in excess of the fees you will charge them. A tip to help retain clients is to think back to what you have told them you would do when they engaged you, and then do everything you aren’t already doing.
• Retain staff for an extra year. Not forever, but an extra year. Staff are not forever but keeping them an extra year will reduce costs, the efforts and time to hire replacements, and then onboard the newbies. Find ways to excite them, have them grow and become more empowered. We are dealing here with incremental benefits, not permanent fixes.
• Systemize, organize and commoditize repetitive functions. Create checklists and then enforce the use of them. No skipping steps…ever…no matter the “importance” of the reason at that moment. Checklists and systems allow your skills, experience and knowledge to be leveraged. Otherwise every time something has to be done, it will be like the first time it is being done.
• Manage your investments like your future depends on it because it does. Do not be flippant or take on excessive risk unless your retirement security is fully assured. Plan your investments and future cash flow and also learn why you should not take your Social Security before age 70.
• Execute a practice continuation agreement in the event of your disability or death. If you die, your family will get something. If you become disabled, you might want to be able to return to something. Get it done!
• Tax plan. Treat yourself as if you were your most important client. And then do similar things for your clients…all of them.

Comment: My Memoirs as a CPA book has been published and is available in Kindle and print editions at Amazon.com. Buy it, read it and enjoy it!

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.