CPA Trendlines

Others dread it. Guess who wins.

How do you compare? Join the tax season study.

by Rick Telberg
At Large
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Tax season has a way of strengthening the profession. For some, it’s a grueling marathon of survival of the fittest, and for others, it’s a lesson in what to do differently next year. So, what does it take to be a top-performing firm? Surprisingly, there is something different about these best firms, and it is not always what you’d expect. The best-managed, most successful CPA firms are not necessarily the largest, the oldest or the newest. They also don’t always pay their staff the best, or spend the most money.
Here are a few basic traits:
1. Continuous Improvement — a tireless dedication to living up to the best standards, working with leading-edge technology, honing new processes and regularly setting new goals
2. A Great Staff — no one succeeds if they can’t recruit, train and retain employees. Hint: It’s not always about money.
3. Delivering Real Value — but not necessarily the way the CPA defines it. Real value must be the kind of value a client can see, feel and understand — things like prompt, attentive service and the ability to solve problems, not just answer questions.

If you can get these three things right, and do it consistently, you have a better chance of being the rare one in six CPAs who can make the cut as a pacesetter. You know you are a pacesetter by any of the standard business metrics, if your practice is growing in revenue and profit; your firm is a great place to work, dedicated to client service and at the vanguard of new technologies and techniques.

“We care about our staff,” said one managing partner. “We provide them with very good technological equipment. And we communicate our expectations to them.” As a result, the firm is reporting smoother than average operations, with fewer surprises and hiccups; however, that hasn’t stopped the managing partner from focusing on the essentials: planning, scheduling and continuing to look for good recruits.

Overall, the top performing firms are as stressed out as the lagging firms. Among leaders and laggards alike, about one in three report high anxiety. Yet, the stress pays off for the top performers in ways laggards can’t fathom. For instance, top performers are twice as likely to operate efficiently (overall) when compared to a year ago at the same time.

Overcoming key benchmarks allow leaders to strut their stuff, making them:
– 40 percent more likely to be reporting year-over-year revenue gains
– 48 percent more likely to be pocketing more net profit
– 18 percent more likely to have more clients this year
– 10 percent less likely to put a client on extension
– 24 percent more likely to be getting more revenue per client
– 45 percent more likely to be getting more profit per client

Moreover, top performers don’t blame clients. While late or unprepared clients are a problem for 43 percent of laggards, only 36 percent of top performers report it to be a problem. Laggards are twice as likely to be suffering from planning and scheduling problems, three times more likely to be feeling the effects of an uneven economy and half again more likely to be suffering technology glitches.

Still, technology shouldn’t be blamed. There’s no difference in the number of leaders or laggards who adopted new software packages this year; however, leaders are twice as likely to feel good about their software.

So, what’s to love about the tax grind? Maybe the answer comes from a manager at a Florida CPA firm: “We have the best employees around! A great cohesive team, all willing to help each other out and very motivated and supportive.”

Who’d want to work anywhere else during tax season?

NOW IT’S YOUR TURN: Join the tax season tracking survey. Check the Stress-O-Meter.

COMMENTS: Rants, raves, idle thoughts, or questions? Contact Rick Telberg.

[First published by the AICPA]

Posted March 18, 2007