Start with this 20-item checklist.
By Marc Rosenberg
Author of “CPA Firm Management & Governance“
If you ask the partners, they will tell you that the most critical and sensitive aspect of CPA firm practice management is the allocation of partner income.
Because of the sensitivity of partner compensation, firms change various aspects of their allocation system quite often. For this reason, the smart firms include wording in their partnership agreements on partner compensation that is very short and quite general. This way, the firm doesn’t have to revise the partnership agreement every time a change is made.
It’s a complicated task. There are seven different systems in use today, three basic tiers, a couple ways firms are calculating bonuses, and at least a dozen other items to ponder and work through.
Here is a checklist of decisions that the best firms are making to determine the compensation of each partner:
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