From the January-March 2007 Issue
Voltaire, the eighteenth century French philosopher, once penned what’s
now morphed into a 21st century management maxim — “perfection is
the enemy of progress.” Unfortunately, many tax and accounting firms today
(actually many, many, many, but that sort of repetition wouldn’t be good
writing, so I’ll avoid it) cling to old business practices while defending
that modern, updated systems “aren’t perfect” so “we’ll
wait.” And wait. And wait. Meanwhile, those in the industry that provide
tools to our profession move faster and faster, and whole new genres of products
and services become available every year. And while smart firms adopt these
new systems and adapt their business rules to take advantage of them, the majority
of firms [sigh] seem to avoid change at all cost. Thus, we have the old, “How
many accountants does it take to change a light bulb?” joke, and its stinging
punch line, “Change? There’ll be no change, we’re accountants!”
One veteran software publisher executive recently included his updated version
of Voltaire’s often-quoted thought. Thomson Tax & Accounting’s
Jon Baron opined in his User Conference keynote that “first is best,”
further explaining that his vision includes delivering great tools in a timely
fashion. His example: Creative Solutions’ Practice CS, a completely new,
redesigned from the bottom up practice management product that takes full advantage
of Microsoft’s new .NET secret sauce and clearly the first of what promises
to be a new genre of product for those practicing public accounting. Practice
CS provides highly customizable “digital dashboards” and promises
to forever change the old “time and billing” paradigm. Another “first
to market” leader in the practice management space is Commercial Logic’s
Practice Engine, which offers a dashboard approach to practice management but
as a pure web service. These “first to market” solutions are driving
their competition to meet new, higher standards, and the better news is that,
based on prior performance, this will probably result in a whole raft of great
new improvements. The not-so-good news is that, to date, only a few thousand
firms have adopted these fantastic new systems. The vast majority seem content
to wait … and wait … and wait … and wait for perfection while
passing up really good, solid benefits today.
CCH’s CEO Kevin Robert has repeatedly demonstrated his group’s
penchant for acquisition and quick integration. But when they bought ePace several
years ago and rolled it out as ProSystem fx Engagement, the product met a similar
adoption rate. Very clearly first to market, it provided its users with tremendous
efficiencies. Yet, to date, this and its few-years-later-to-market competitor
from Thomson, Engagement CS, have yet to claim even a quarter of the market.
The rest of the firms, it seems, are content to pass on good and continue to
wait for perfect. And wait. And wait.
And what does the wait cost? Well, for those early adopter firms, it costs
nothing. In fact, for them, their peers’ reticence to move forward is
actually a competitive advantage! The 2006 PCPS/TSCPA MAP Survey recently concluded
its 2006 data gathering phase, and the results are being tabulated as I write
this column. My prediction is that, once released, they’ll again demonstrate
an ever widening divide between the upper quartile of highly productive (read
highly profitable!) firms and “the rest.” I first looked at these
numbers four years ago and found the gap astonishing. Two years ago (the survey
is biannual), much to my amazement, the gap widened. The upper quartile practitioners
actually work slightly less (3 percent — not huge, but it’s an extra
seven or eight days of vacation, and heading into my 35th busy season that sounds
pretty nice to this old bean counter!) than their colleagues in the “average”
pool while earning a spectacular 65 percent more money!
So why the great divide? I submit that it’s both nature and nurture.
As conservative and cautious beings, we’re led to the profession (nature)
where we’re taught skepticism, suspicion and wariness (nurture). And while
our clients often value these traits, they usually don’t serve us well
as business people because, as a group, we tend to lag in implementation. But
(more good news), it doesn’t HAVE to be that way. Firms can change (pun
absolutely intended) and adapt more quickly. Now, I don’t mean to imply
that the very first adopters are always smartest; to the contrary, there is
a certain wisdom in good timing. But being late to adopt is almost always more
expensive. Otherwise, good firms lose huge efficiencies and, more importantly
in today’s market, they risk losing good staff by not embracing commonly
accepted best practices.
My suggestions? Ask your staff! What would THEY have you do? What tools do
they hear about and covet when you send them to training sessions. (Wait a minute.
You DO send them to training sessions, right?) Ask you peers. Ask your suppliers.
Our profession is blessed to be served by truly excellent vendors that understand
practice. Ask them what you might be missing.
I recently attended annual user conferences of ~600+ CCH users, then ~800
Thomson Creative Solutions users, and finally >500 Intuit QuickBooks users.
I found that all three groups were engaged and excited and were taking in all
the training and instruction the respective vendors could provide. And in return
they were pushing and challenging those vendors to provide more and better solutions.
It’s a virtuous circle. Together we’re better and smarter than any
of us is alone.
P.S. — A couple more thoughts: If you’re not employing
a true practice management system, make it your first priority after busy season.
And if any of your engagements entail a trial balance, you really should look
at engagement software. Really!
Mr. LaFollette is Executive Editor of The CPA Technology Advisor. He was
a Tax & Technology partner in a large local firm for 23 years, and VP of
Product Strategy for a major tax and accounting software developer for five
years. He is the President and CEO of Accounting Technology Resource Network,
LLC and can be reached at firstname.lastname@example.org.
He also publishes the tax and accounting blog at www.TheTechGap.com.