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Firm Management

Your Firm and Your Fundamentals

What is best to keep in your practice, and what needs to go away? For many firms, getting the fundamentals right will help you pick the right ...

A Top Technology Initiative Article.

As discussed in last month’s column, the opportunity to connect with many of you at live conferences this year was valuable and insightful. It made me think about your firm’s strategy and technology stacks. While I could have done without the gift of COVID (the gift that keeps on giving), the downtime was valuable.

I could reflect on your sincere questions that were looking for independent guidance. Your questions have reminded me that many of the problems you are trying to solve now are like the problems of the past. And one of the most significant issues is that you can’t find vendors or products that meet your expectations or your fundamental needs. One of my favorite clients is looking for a stack of solutions that will meet the needs of a tax and accounting practice.

Another is looking for solutions for a tax and advisory practice. A new client wanted to discuss the needs of a tax and growing CAS (Client Accounting Services) practice. Consulting engagements have been in larger firms that needed guidance on Tax, Audit, and growing CAS practices. When economic pressures mount, businesses, including CPA firms, look for a better, more profitable, and more efficient & effective way to deliver products and services.

My latest wake-up call hit during the Independence Day weekend. After setting up to play in our town’s parade with the Hutchinson Municipal Band, we were sitting in the sun waiting for the parade to start, and I watched families and groups of all kinds organize at the start of the parade. While we rehearsed our patriotic numbers to play in the parade, I had enjoyed playing traditional favorites.

Then, I started thinking about other favorite songs. Oddly, a 1983 song from the Eurythmics became an earworm. “Sweet dreams are made of this, Who am I to disagree? I travel the world And the seven seas, Everybody’s looking for something.” And then I realized that each of you is looking for your “something.” Some of you have found it, but many have not. Some of us have become very professional at helping clients and managing our practices, and some have not.

A few of you have focused on the client experience, and most have not. Some of you have learned how to manage a practice effectively, enjoy business development, understand business operations management, or manage personnel well, but many have not. We have been watching the fundamentals of business being lost by your clients. Have you lost sight of the fundamentals, too?

What are Fundamentals?

What do I mean by the fundamentals? Try a few of these on for size. For example, hiring and terminating the right people, truly providing excellent client service, managing day-to-day costs for profitability, getting processes (workflow) right to optimize operations, spending the time on personal relationships inside your firm and with your clients, staying informed on regulatory & technical changes, and innovating your delivery models to minimize wasted effort.

It is easy to get caught up doing things the same way, but life and business are changing all around us. So while we can continue doing the same thing, and you’ll likely get better at it, your comfort level will eventually lull you into performing below your optimum level.

A few famous sports stars understood the value of fundamentals. For example, Larry Bird of basketball fame said, “I wasn’t real quick, and I wasn’t real strong. Some guys will just take off, and it’s like, whoa. So I beat them with my mind and my fundamentals.” Michael Jordon said, “Get the fundamentals down, and the level of everything you do will rise.” Vince Lombardi noted, “Excellence is achieved by the mastery of the fundamentals.”

Earl Weaver, coach of the Baltimore Orioles, stated that “the key to winning baseball games is pitching, fundamentals, and three run homers.” Certainly, skill combined with luck doesn’t hurt, but do you note how many successful athletes understand the importance of fundamentals? Fundamentals help us plan our next move. Two of my favorite golf quotes are from Arnold Palmer “Golf is a game of inches. The most important are the six inches between your ears,” and from Ben Hogan, “the most important shot in golf is the next one.” What is your next shot?

Do you have your firm fundamentals right?

It has become apparent (again) to me that you must think about the fundamentals you want for your clients, your team, and your firm in every functional area, from tax to audit to practice management to Client Accounting Services (CAS) to Advisory.

  • What does it take to prepare and deliver tax returns effectively?
  • What should the end-to-end experience be for your clients and your firm? Can you describe it?
  • Have you got a workflow diagram that shows the process?
  • Have you reviewed your tools and technology stack?
  • Are there better options in the market?
  • Where are you wasting time?
  • What are the bottlenecks when you are in the thick of tax season?
  • What are recurring issues that you can address?

This year I’ve had many discussions about end-to-end tax workflow. Automating and enabling business development, engagement letters, PBC requests, organizer completion, business trial balances, 1040 workpapers, tax preparation software, review, assembly, delivery, and payment (plus more like extensions and estimates) are steps that all tax practices take. How can you make the steps easier and faster while maintaining quality and accuracy? Are there processes and tools that can help? Yes!

Likewise, for practice management, there are steps that firms have in common. Typical issues include engagement/project progress, due date monitoring, scheduling, time tracking for cost or billing purposes, reporting, profitability, expense management, workflow, document management, eSignature, portals, business development, CPE Tracking, and many more issues are everyday needs. Are there processes and tools that can help? Yes!

By the way, we’ve seen the same thing in audit, CAS, Advisory, wealth management, litigation support, and every other niche offering we have reviewed. Are there processes and tools that can help? Yes!

We’ve found in each practice area that we have reviewed that there are similar needs among firms with no solution able to satisfy everyone’s needs. And what continues to happen is that you are looking for solutions, perhaps an ideal solution, and there is so much inaccurate market noise that it is hard to pick a viable, long-term solution. There is no “silver bullet” to solve the problems, but you can improve the situation.

Brian Tankersley and I are pleased to produce our weekly podcast, The Technology Lab, to cover the numerous available tools. But point solutions, sometimes called best-of-breed, must be integrated into a larger framework or technology stack. It also became obvious (again) this past month that it was time to revise our stack recommendations. While Brian and I have helped many organizations develop their stack offerings, it has become clear that several approaches offered by organizations and consultants are long in the tooth. While they were fine in 2000 or 2010, they don’t fit the 2020s very well. And this realization was a great reminder that innovation must continue, but we must get the fundamentals right.

So, What Do I Do Now?

As I’ve pointed out in prior articles, the teams at Liscio and Suralink have repeatedly taught me about this client experience thinking. Your technology stack (= choices of tools) PLUS workflow procedures make all the difference in everyone’s experience. And as I noted in last month’s column and above, there does not seem to be a magic solution that works for every firm. While there are many good products in the market, you must look for tools and products that fit your firm’s fundamental needs. You don’t want to overbuy or underbuy the capabilities needed.

We will continue to share our evolving understanding of solutions, stacks, and best practices for CPA firms in this column, in our podcasts, and at every CPE event where we speak. Striving for the best client experience, team experience, and firm experience with quality is a fundamental we always try to get right.

The summer is an excellent time to reflect on Ecclesiastes 3:1-8 “For everything there is a season, and a time for every purpose under heaven…” The season is right to return to the fundamentals. Now is “a time to seek, and a time to lose; a time to keep, and a time to cast away.” What is best to keep in your practice, and what needs to go away? For many firms, getting the fundamentals right will help you pick the right platforms, products, and tools to serve your clients best.

See inside August 2022

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