This is a compilation of my top 10 bits of advice or suggestions taken from my columns posted here last year. There has been some editing for readability and context.
You will be better off if you prepare a strategic plan
Almost all of my successful clients had a strategic plan to work from. These plans weren’t always followed, but they always provided a guide and showed a way forward. A suggestion for firm leaders is to identify the single most important change you could make that would positively affect the growth or strength of your business and make that your strategic plan. There are many changes that might be necessary and choosing the one might be daunting but pick it and then focus on getting it done.
“New” method of topside tax return reviews
A new method of a quick topside tax return review is to look at the return as if it were the return of someone you are trying to get as a client. Identify all the issues you would tell a potential client that were wrong or missed, or what tax and financial planning opportunities you would have advised the client about. Make that your review method and then follow through on it with that client.
Get your affairs in order
If you do not have your affairs in order, you will cause consternation, anxiety and costs for your family while they settle things. This includes a will and the accompanying documents, trusts that are properly funded and administered, a buy-sell agreement if you are in a partnership, a practice continuation agreement if you are a solo, copies of all your designations of beneficiary forms and a listing of where everything is and who to go to for assistance.
The extra 20% you should do
My guess is that 80% of what we do for clients is more or less of a commodity nature. It is the extra 20% that we do that creates the strong and trusted advisor relationships and true value for clients. And that is what we need to work on. Understanding this might help us in the way we allocate our time and efforts.
Auditors need to use focused judgment
As auditors we are required to follow the rules provided by GAAP. It is true that many judgments are called for when doing this; it is also true that the financial statements are the clients, and our role is to audit and provide an opinion on them. However, sometimes we might need to step outside the box and question some of the results that can swing some amounts into different reporting categories. An example is the Silicon Valley Bank situation that made everyone an expert with 20/20 hindsight. However, perhaps a few minutes of focused reflection might have yielded a result different than the clients. An assumption by SVB’s auditors that if the “held to maturity” securities might not reasonably have been able to be held until maturity and what SVB’s “revised” equity under that circumstance would have changed to and how it would have affected the auditor’s opinion. I suggest thinking about the full consequences if something should unexpectedly go wrong, and the degree of probability of it going wrong. This technique can also be used separately from auditing when providing tax, consulting, advisory or risk management services to clients.
Be a businessperson and not an accountant when managing your practice
Everyone reading this column is reading it as a businessperson and not as an accountant. Accountants read tax and audit updates and similar material to make their service techniques better. Businesspeople read about making their businesses and business skills better. You need to decide whether your primary concern is running a practice or a business. Businesspeople want to get greater revenues, train, retain and grow staff, provide better services to customers, build an infrastructure and strong culture, and charge the appropriate fees for what they do. Professionals running an accounting practice want to take care of clients’ immediate concerns and get work in and out as quickly as possible — sometimes quickly being more important than efficiently or following all the QC procedures — and occasionally provide added value. A practice is run for the immediacy of its activities. A business is managed for its long term and to grow its asset value. Determine if you are in this for the short term or long term and make your decisions accordingly.
Consistency in staff training, development, growth and robust mentoring, targeted CPE and soft skills training, along with the proper focus and investment by the firm, can provide meaningful career opportunities to entry-level and lower-level staff. Otherwise, you will have excessive staff turnover and will spend added time onboarding new staff. The time will be spent one way or the other. Further, properly trained entry-level staff can possibly step up to assume some of your duties while revolving door staff never could. Decide how you will be “richer.”
Potential of artificial intelligence
Early on, I was asked to review some tax opinions generated by AI and they blew my mind. They were adequate, not great, but also not bad, and I then realized the potential for how it could rapidly “grow” in the future. If I measured the opinions by perfection, they would be given a low grade, but so would any infant trying to fit square and triangle blocks into the right spaces. However, at some point, the baby would figure it out … and so would AI. And that is the potential I see. We could spend hours criticizing the baby and also AI, but that would serve no productive purpose. That time instead should be spent appreciating the future potential of the infant and also of AI. This is cutting-edge stuff.
Answering a “simple” question of a nonclient
Occasionally I get a “simple” or “short” question to answer from a nonclient. I made a decision a long time ago that I would not provide any answers unless I was retained to do a thorough analysis of the situation. The answers to specific short questions might be simple, but the application or execution can be totally wrong for that person and might not accomplish what they want to do or could cause added tax, expense or exposure. I probably lost more of this “business” than I got, but I never provided an “answer” where things did not work out and I was called upon to explain why I “told them what to do.” Many people perceive CPAs as an infallible Mr. or Ms. Answerperson. We are smart and well-informed, but without being aware of the full situation and having the opportunity to apply our knowledge and experience to that specific situation at that time for that purpose, we would be doing a disservice. Either do it right, or do not do it.
Staff culture management
Do you manage your staff and culture? Do you have a clearly defined culture? Have you communicated what is really important and how it should be dealt with? Do you reinforce this continually and never digress? Do you maintain a big-picture, long-term view of your practice or run it to get through the day? Do you do everything you tell your staff to do or just pay it lip service? Or do you really follow through and provide the right measures for your staff (and partners) and implement and reinforce what should be done? This is not rocket science. Meet due date commitments. Always look to provide value to your clients. Excite your staff and make sure they go home happy every night. Be a learning organization. Get rid of lone rangers who refuse to conform to what you want your culture, client service and practice to be and signify. Culture is not a buzzword or a touchy-feely moment, but a way to act all the time, 24/7/365, in and out of the office. Everyone in your practice reflects the image of your practice with everything they do, whenever and wherever they do it. If you accept and retain losers, that will make you and your practice a loser also. Manage your culture and then you will not have any “worst employee.” They will all be winners and so will you.
You are running a business. Run your business!
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