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Take your firm from good to great:

Best practices that make all the difference
July 5, 2022

There are many good accounting firms out there, but there are far fewer great ones. Improvement is an ongoing part of being in business, and the higher you reach, typically the better the result. The results are dependent on many factors, not the least of which are planning, timing and luck. Timing and luck are rarely under your control. That leaves planning, which is often what separates the great firms from the good.

Good firms certainly have much to be proud of. But there are ways good firms can plan and improve to make themselves great — by focusing on the differentiators that would be associated with high-performing firms in three primary areas: staff, clients and process. 

 Staff

Assessments that matter 

Evaluating performance throughout the year allows for a system of accountability while setting the bar high. Annual and semiannual assessments are not sufficient and great firms understand that increasing the timing to 3–4 times a year will make an impact. During each of these assessments, a firm should have three goals for each evaluation period, or at least nine total. The timing of these goals will vary by the time of year. These assessments should vary by nature of responsibilities — tax versus audit, for example, and the level of experience dictates the goals. Great firms don’t restrict assessments to staff members either. It’s important for all employees, including partners, to receive assessments.

Achievement-rewarded compensation 

The better someone feels about their contribution, the more significant the results. Great firms create bonus plans and reward programs tied to achievements to motivate and heighten the likelihood of attaining results. They incentivize employees by providing monetary or other tangible rewards like gift cards, theater tickets and so forth. Compensation is awarded for both team-wide and individual levels. Great firms also know incentives should be calibrated to the bottom line of the firm so the percentage provided is not too high, but they should be substantial. 

Job descriptions across the board

Job descriptions pave the way to efficiency and effectiveness. Great firms provide job descriptions for every level in the office, including owners and the managing director. They include not only the tasks required, but the experience expected. In addition to skills, they should include education — formal and informal (on-the-job training, seminars, external training, etc.). Furthermore, great firms reinforce that if people do not perform to the level of the job description, there are consequences.

Team-driven recruiting

A strong key to retaining existing employees is adding additional employees who are liked by the existing team and are compatible. Great firms understand that recruiting succeeds best when many

faces and voices are involved, so that current personnel are invested and that new hires can see for themselves with whom they will be working. The recruiting team of a great firm also acts as loyal alumni to their schools, and they’re very discerning about which universities will make sense to support.

Task forces 

Good firms have initiatives that are driven by owners; better firms have initiatives driven by a collective process between the owners and employees. Whether it is an initiative to go paperless, move to cloud computing or recruit talent, great firms employ a “blending” between different staff levels and create a task force divided into specific responsibilities, within a certain time period and/or certain dimension.  

 Clients

New client check-in

The client service experience is a crucial differentiator between accounting firms. The more aware you are of the needs and perceptions of your clients, especially the new ones, the more you will bolster the service experience. During the first three months of a new client relationship, great firms engage in a monthly check-in process, followed by quarterly check-ins for the duration of the first year of service. They use a list of standard questions to review during 30-day check-ins with no more than 3–5 questions based on client’s comforts, needs and firm’s responsiveness. Anything learned during the check-ins should be followed up on immediately.

 Calendar of responsibility and delivery 

Great firms know that both firm and client operate best when there is an agreed-upon calendar of commitment for work. Most business clients typically have work being done throughout year. There might be more that needs to be delivered during a certain week of each month or quarter, but it should be mutually agreed upon when the firm will have have X, Y or Z ready. On the flip side, the client must provide the necessary information/documents to have X, Y or Z ready in a timely manner. This allows for coordination of deliverables, project necessities and turnaround times.   

Mutual accountability 

Accountability is at the heart of great firms and their clients’ business. When shared, it runs both ways from the firm to the client and from the client to the firm. If the client doesn’t deliver what is needed, the firm should have the right to extend the deliverable time or exercise other potential options. If a client doesn’t meet its timeline, there could be a penalty imposed on the fee as well. If the firm fails to meet the timeline and the client has, then the client should enjoy a fee concession or other benefits. Mutual accountability forces both sides to do what is expected, which improves productivity and leads to even better results.

 Focus group

Understanding the priorities of clients and potential clients as well as investigating potential operational weaknesses is valuable to being a quality-driven business. Great firms employ focus groups as a resource to gain crucial strategic information and choose targeted participants and times for optimal response. They plan for the research most appropriately after a major deadline, when the performance of the firm is still fresh in the mind of the client.  

Roundtables 

One of the best ways for a firm to elevate itself above other firms is by having roundtables. Bringing clients together to discuss local business challenges and network along with community leaders (this often means well-known bankers and attorneys, for example, but can extend beyond that) is an opportunity not enough firms offer. Offering high-level, business-to-business conversations is a significant value-add for clients. Great firms see the roundtable program as a solid information tool to glean businesses’ top-of-mind concerns, and they can use that information to better serve their clients, while also mine for new clients. The networking possibilities are endless, especially if the clients bring a prospect to the roundtable.

Making it personal

Better firms operate with an understanding that they want to be increasingly relevant to clients on an individual basis. Many a strong firm will work off an annual wish list for clients. The wish list will capture financial, operational and civic challenges. The list will be catalogued and monitored so that clients trust in the firm and its personnel and satisfaction can be enhanced. 

Ranking & selectivity

Many successful firms grade their clients as a means of profiling their practice, scheduling priorities and evaluating the financial performance of the practice. The better the metrics that are available, the more valuable the outcome of the grading process. Considerations might include: bill payment timeliness, realization levels, how often they buy more than the standard package of service, how often they seek more service, fees in excess of X and, of course, the level of referral/reference they provide. These grades help the elite firms determine the gold standard for their “model clients,” which would translate into criteria such as service level, fees, geography, niche, demographics and industry.

 Process

Disciplined timing

Turnaround time and satisfying expectations are vital to a strong operating system. The strongest of firms are deadline- and deliverable-oriented. They don’t miss due dates — they come in on time and before. Assigning due dates for client projects, internal projects and all actions are imperatives in the better firms. Beyond timing, setting goals ahead of a project, confirming the goals and memorializing the achieved goals or alternatives are standard in the stronger firms.

Prioritized transparency

High-performing firms will make sure that the best clients are scheduled ahead of other clients. Scheduling priorities are not set to the seniority of the partner in charge but to client and project worthiness. Real-time based software is utilized to track, monitor and communicate.

Robust communication

Strong information flow is paramount for an outstanding service business. The better firms will standardize the type of individualized client correspondence that will be distributed for content, timing and method of distribution. There will also be a follow-up protocol. Rigid reply times and tracking for follow up — whether calls, email or text — are essential. Nothing falls through the cracks. In addition to following up on firm-initiated communication, the firm would have a policy for returning calls, replying to emails and after-hours calls. These policies would be transparent for all who are involved — clients, potential clients, referral sources or internal. The better firms also follow a routine and regular internal dialogue system. Staff meetings, leadership meetings and owner meetings take place with regularity. Agendas are distributed in advance. Minutes are documented and shared with the applicable audiences within 48 hours. The meetings are expected to create discussion, not be restricted to reporting information. A constant at all staff, leadership and partner meetings is the topic of business expansion, the condition of the  process as well as the results.

Consistency of preparation process

The road to strong profits in the better firms is paved with consistent methods and continuity of procedures. While every client is unique and all partners have their peeves and preferences, the more standardized the better. The best firms will have standard documentation policies, uniform acceptance criteria, required software packages, mandatory methods and regular monitoring for compliance. The better firms have honed the “Firm Way” in all the aspects of the firm’s delivery process from the technical to the administrative.

 Mining marketplace intelligence 

Understanding what makes your competition succeed and how they view their positioning is very useful to the better-performing firms. Canvassing centers of influence, monitoring social media, conversing with clients, networking at the local professional organizations, participating in firm associations and talking with potential new employees and partners are just some of the techniques used to learn about the competition. Many a strong firm has become stronger by learning from peers and anticipating the competition. Niches have prospered, staffing enhanced and clients secured and/or maintained based upon awareness of marketplace conditions and the intelligence beneath the surface. The best firms will tactically evaluate and react to intelligence and place a priority on gathering information.

Becoming a great firm

Great firms concentrate on embellishing their strengths with staff, clients and process all year round. Areas of emphasis are determined and leaders are tasked with the charge of achieving the goals and reporting back. Results are rewarded based on the degree of success; failures are vetted out promptly. Compensation throughout the firm is strongly influenced by the goals and achievements of the firm. High-performing firms not only hit their goals, they know the right ones for the time and the resources of the firm.

If you are in a self-assessment mode, work now to pull your plan together with your own team or by working with a seasoned facilitator. If you are in the implementation process already, be very open minded at each and every process point. Continuously vet the original plan and course correct when needed. All firms can improve. It is up to you first to determine to become a great firm and then to implement a plan to make that happen. There is plenty of room for more great firms!

 

Ira S. Rosenbloom, CPA, is the chief operating executive of Optimum Strategies, LLC, a consulting firm focused on helping small and medium-sized CPA firms enhance business performance and profitability, and foster practice continuity.