WithumSmith+Brown | Certified Public Accountants and Consultants | withum.com 1 1 Pennsylvania...

WithumSmith+Brown | Certified Public Accountants and Consultants | withum.com 1

1

Pennsylvania Society of Tax and Accounting

ProfessionalsPractice Management

Retreat

June 17, 2015

Wilkes-Barre, PA

Presented by

Edward Mendlowitz, CPA

Edward Mendlowitz, CPA• Partner emeritus with

WithumSmith+Brown, PC • Author of 24 professional books• Admitted to practice before U.S. Tax

Court• On BottomLine/Personal panel of

experts• Practice management techniques have

been reported on by The Wall Street Journal, and other publications

• Testified twice before House Ways and Means Committee on tax equity and reform

• Has been a Team Captain and performed peer reviews for over 60 CPA firms

Professional sharing

• Get my monthly Top 5 Q&As free – email me your request to be placed on personal email list

• Read my weekly Art of Accounting column at www.accountingtoday.com. Search for “Mendlowitz”. Sign up - it is free and you will also receive the print edition of the paper free

• Subscribe to www.CPATrendlines.com where a Q&A is posted weekly. Also free.

• Read my twice a week blogs at www.partners-network.com. Also free.

• Call me with your practice management questions and issues – also free.

http://www.accountingtoday.com/

http://www.cpatrendlines.com/

http://www.partners-network.com/


1. Quicker billing

The perception of the value of your services decreases as the time

between the performance of the service and the billing date increases. Actually, the greatest value of your service is BEFORE you do any work.

The longer the gap between the work being done and the bill bring

received, the less likely you are to be paid in full. Fast billing equates to the clients’ perception of a professional business

attitude by the CPA. Clients get nervous when they are not billed promptly – they expect to pay

and don’t understand why they are not being billed. Delayed billing means a greater amount that will be due the accountant.

No single bill is significant in and of itself to the client. However,

accumulated billings lumped together can be significant and

this causes payment delays and collection problems. Ask for retainers Accept credit cards

1. Quicker billing

The lower the time gap between doing the work and getting paid,

the more fun you’ll have


2. Anxiety busters: TIO, DIN, MIT*

Eliminate your piles – TIO [piles include your unanswered telephone calls and postal mail, your email in box, and work that is just not completed…yet]

Eliminate your “To Do” inventory – TIO Unpleasant things don’t go away – DIN If it has to be done, might as well do it now – deciding to do it

later creates a mortgage on your time – DIN You can only have 1 MIT – do that first [M = MOST, not ALMOST

and not the TOP 3,4 or10] Meet deadlines - TIO Disaster plan – DIN

* Touch It Once, Do It Now, Most Important Thing

2. Anxiety busters: TIO, DIN, MIT

The lower the amount of what you put off till

tomorrow,the more fun you’ll have


3. Putting the Q* in your oversight procedures

What the real purpose of reviewing work is Put Quality Control into the review process Quality Obsession 9 times in a row: right and 10th time: relaxed =

procedures not being followed thereafter

*Q = Quality

3. Putting the Q* in your QC procedures

The lower the errors, the more fun you’ll have


4. More effective hiring and training

Settling retards growth The alternative to getting what you want is reduced

expectations Make training an investment [compare to a manufacturer’s

investment in equipment] Assume you fired someone who wasn’t performing well.

What is their potential for success in the firm that then hired them BECAUSE they seemed great at the interview! And now consider the opposite – you are hiring the person they fired! What is your chance of success with them?

• Review your past staffing successes and failures.

4. More effective hiring and training

The lower your turnover, the more fun you’ll have


5. Commoditization

Routinize your procedures E-Myth concept [Recommended book: E-Myth Revisited

by Michael E. Gerber] Automate, outsource, fool-proof, duplicate and

standardize processes In spite of the above, never forget to treat your clients,

at a minimum, in the manner that they expect to be treated; and never forget that they are your customers and pay your salary; and it is your job to have them

feel they got their money’s worth!

5. Commoditization

The lower the number of your nonstandardized procedures,



6. Interacting with clients

Manage your client contacts You must have frequent “contact” with your top clients What about the rest of your clients? Is your 80th largest

client any less important to you than your 8th largest – I bet

they don’t think so If you look at your 81st to 100th largest clients as ONE

client, and you aggregate their fees, how large would they be; how much time do you spend with them and on their work; and how profitable are they compared to your

8th or 9th largest client; and how many sleepless nights do you have because

of them versus because of your 8th or 9th largest client?


…interacting with clients (cont’d)

Additional business from current clients Referrals from clients – best measure of their satisfaction

and their confidence in the service you provide What are your clients’ problems? and how do you respond? [Agenda item for your retreat (#7 ): Try applying their

solutions to your practice business] Assume your largest client calls you later today to drop you,

what would you say to them? What would you wish you had done, and when,

that could have stopped you from being fired? Why not do it now - DIN

6. Interacting with clients

The lower the number of client generated meeting requests,



7. Partner retreats away from home

Puts perspective in your practice Develops and refines your vision Defines goals of your practice Take an “inventory” of your practice – where are you, and

where are you going? Is where you are going, where you want to go; or where you thought you would be going at this point in your life

Do business plan of your practice as if it were starting today What stage of a business’ life cycle is your practice – ways

to jump start it if it is on the downward slope SWOT analysis Who is the firm’s leader – and why is it that

person


…retreats (cont’d)

Is the leader a reactive or proactive person (i.e. a problem solver or a problem preventer?)

To be a preventer, the leader must think about what can go wrong and then implement procedures and processes to avoid that – and not wait until the problem occurs (and then be the best world class fixer upper)

Distinction between fire prevention and fire fighting Is time spent putting out fires or planning for future and

sticking to a course fashioned from the leader’s vision? Practice lifecycle – how does a practice grow

when it starts and how does it grow after it reaches maturity, and does it keep growing or is it stagnated?


…retreats (cont’d)

What are the risks to your practice? What would happen if you had a big lawsuit; criminal

indictment against a partner; lost your right to practice before the IRS or were suspended for a brief period; could not do audits before completing a series of CPE programs; or lost your CPA license because you did not reregister on time or blew the CPE requirements; or lost your largest client that accounted for 42% of your business?

What do you think Arthur Andersen, Bear Stearns, Enron, Merrill Lynch or Lehman Brothers wish

they had done differently?

7. Partner retreats away from home

The lower the disagreements between you and your partners,



8. Running more effective meetings

Plan and direct your discussions Stick to the big picture issues Is the client and/or you getting value from the meeting

(and does the value exceed the cost?)

8. Running more effective meetings

The lower the amount of control others have over your meetings,



9. Building personal wealth outside of practice

Qualified plans Other investments Eventual exit strategy

9. Building personal wealth

The lower your worry about your future financial security,the more fun you’ll have


10. Revenue from clients

How much of your revenue is from clients you had 10 years ago? How much are the fees from your top 10 (or 20) clients as a percent of

your total revenue? To what extent is the practice growing with clients that are growing or is

growth from new clients, and why? How did you get each of your top 10 clients? Are no profit and/or unpleasant clients dropped (Determine realization

for each client. Also determine family tree of a client before dropping them.)

Existing or new clients – who are more profitable? Question: How much potential is expected from new clients? Do this for

the new clients you got 5 years ago – how much has been attained vs. what you expected?

Do low level activities crowd out high value services?

Fee increases – raising fees or rates – how often should you?

10. Revenue from clients

The lower the number of slow payers and write offs,



11. Niches

Niches create specialization, depth and concentration of learning

A niche can be an industry or service area Can a geographic area be a niche? Use in marketing - networking, cross referrals (e.g. bonding

companies), attorneys, consultants, focused advertising and promotion.

Staffing advantages: extra and directed training and CPE; critical mass to spread cost of specialists

Becoming a “player” Re: Your top 10 clients – are they in any special

niche (how many niches do these clients fall into?)

11. Niches

The lower the array of services you personally need to be expert

in,the more fun you’ll have


12. What clients really want

Return their calls Show up Don’t miss deadlines Be available When a client complains…

Deal with it immediately A partner should handle complaint How to respond Recognize importance of complaint or issue to

client…and feel it Opportunity for you to improve and bond a stronger

relationship

12. What clients really want

The lower your clients’ discontent,



13: Some items not covered

1. _______________________________________

2._______________________________________

3._______________________________________


3 Things you will now do

1. _______________________________________

2._______________________________________

3._______________________________________


Doing #1 – 12 =

+ You providing better service to clients

+ You making more money

+ You having more fun


You are welcome to call me with your questions.

EdI can be reached at:

WithumSmith+Brown, PC

One Spring Street, 4th Floor

New Brunswick, NJ 08901

Tel: 732.964.9329 Fax: 732.964.9330

e-mail: [email protected]

Blog: www.partners-network.com

mailto:[email protected]

http://www.partners-network.com/

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