By Ira S. Rosenbloom, CPA
Spring time is an optimal time for an accounting firm to assess itself, and the best way to start is by taking inventory. The primary assets in any CPA practice are personnel and clients. Taking stock of the pros and cons of staff and clients is the core process for taking inventory of an accounting firm. As you begin to evaluate the quality of your firm’s inventory, here are some important factors to consider for a spring clean-up:
Quality staff members are motivated professionals with a strong work ethic and technical skills. Putting your staff to its “highest and best use” is crucial to enhance the total value of your staff. Modifying job expectations, incentivizing, and moving staff members from one role to another are also important to achieve their highest and best use potential. Post busy season is a perfect time to establish and evaluate your criteria. Budgeting for specific tasks to be performed, and the costs necessary to produce the desired output, must be an ongoing exercise when determining headcount, and your general investment in personnel.
Besides salary and benefits, the most effective way to retain talented individuals in your firm is through training and development. Assessing your staff, in terms of return on investment and potential for growth, is not an easy task but it is essential. Skills of each staff member need to include client service, as well as professional advancement, such as demonstrated leadership, continuing education, marketing, recruiting, mentoring, and client goodwill. Although there is no scale to accurately measure motivation, staff members who help you generate more substantial “A” and “B” clients, are motivated to succeed and have a vested interest in maximizing their own returns on investment. Staff members who treat and respect all of their clients equally, are a necessity for a strong practice, and a solid indicator of professionalism.
The best clients are the ones who pay quickly, seek out additional services, refer other clients, and treat you and your firm with respect. The most effective way to evaluate your clients is by grading them on a scale from A–D. The more quality clients you have—specifically “A” and “B” clients—the greater the value of your practice, and the better your return on your time invested.
Increasing your “A” and “B” clients is not easy, especially if you are depleting resources by focusing too many hours on your “C” and “D” clients. Upgrading your “C” clients and dismissing your “D” clients is an imperative. The best way to accomplish this is to either sell off, or refer out your “C” and “D” clients before they drain you and leave you with no return on your investment. Although these clients may not be profitable for you, your “C” and “D” clients may be someone else’s “A” or “B” clients, and they may get better attention elsewhere.
With the highs and lows of busy season fresh in your mind —now is the best time for some spring cleaning. Follow these initial steps to diminish the clutter in your practice and spread quality all around—it will be good for your inventory and it is essential for your firm. Quality clients will thrive with quality staff, and quality staff will thrive with quality clients. It is a winning combination and one that has been proven to succeed.
Ira S. Rosenbloom, CPA, is the Chief Operating Executive at Optimum Strategies, LLC, a consulting firm focused on helping small and medium-sized CPA firms enhance business performance, profitability, and foster practice continuity. Ira can be reached at: firstname.lastname@example.org or at (973) 666-1980.