The compensation trap that turns winners into losers. By August Aquila Creating the Effective Partnership The focus on most CPA firms is on billable hours. While there is nothing inherently wrong with this focus, it has become the overriding focus of firms. There is nothing wrong with making money today, but what about building for the future? With “today” being the dominant focus, what is the encouragement to CPAs to innovate? In most firms there is no alignment with innovation and compensation. You will never have innovation unless you allocate some time and reward to making it happen.
Readers’ Forum: Hours worked. Firing clients. Setting prices. Chris Basom, managing partner of Your Money Matters in Mission Viejo, Calif., wants to know the “one thing you wanted to implement before tax season but just couldn’t get to.” “Is cash still relevant?” asked solo practitioner Roxann Otto of Otto Tax & Accounting Services in Slinger, Wis. Charles G. Read in the Melbourne, Fla., area would like to know how other accountants arrive at the charges they present. Deborah McDowell Cain of her eponymous firm in Fort Worth, Texas, asked, “Does your firm work five, six or seven days a week? Is overtime for staff mandatory? Are senior staff hourly, salaried, offered overtime or comp time?” And harking back to the busy […]
The 9 essential elements for a successful partner comp plan. By Robert J. Lees and August J. Aquila Creating the Effective Partnership Every compensation plan should be constructed to help the firm achieve its strategic goals, including servicing its clients and attracting and retaining the right people.
How to create a fair and effective comp plan that unites partners and pushes the firm forward. By Robert J. Lees and August J. Aquila Creating the Effective Partnership The right partner performance bonus plan encourages and rewards partners for achieving firm, team and individual goals, enabling the partners to see a clear cause-and-effect relationship between what they do, what it means to the firm and how they get rewarded. Unfortunately, in too many firms, partners can’t see these linkages. The compensation system is a failure. Consider, for a moment, these six questions for your firm:
What 80% of firms agree on. By Marc Rosenberg The Rosenberg Survey If partner compensation is the single most critical and sensitive aspect of CPA firm practice management today, then a close second is partner retirements and buyouts – the money partners receive for the purchase of their ownership in the firm when they retire or leave the firm due to death, disability, withdrawal or expulsion. The amount of money involved is quite significant. Roughly 80% of all firms consider the value of the firm to include:
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, […]
Lessons from the best-managed firms. By Marc Rosenberg Author of “CPA Firm Management and Governance: The Managing Partner’s Guide to Running a CPA Firm Like a Business.” Baby boomer partners are rapidly approaching retirement age, resulting in a dramatic increase in new managing partners at firms. In fact, CPA Trendlines estimates that up to 25% of multi-owner firms are operating under managing partners who are relatively new to the job, with tenures under three years. And over the next five years, one-third of multi-owner firms will undergo a change in ownership and/or control.
But many CPA firms appear to be missing out on the recovery. by Rick Telberg CPA Trendlines Research The nation’s tax and accounting industry appears to have re-started expansion with new hiring in January, after a two-month pause at the end of 2012 in November and December, according to CPA Trendlines research. But the gains appear to be concentrated in non-CPA-owned offices. Analysts are attributing the 2012 year-end economic stall to two major storms which slowed economic activity: One, Hurricane Sandy, and, the other, Congress, which has been gridlocked under a bubble of hot air. CPA Trendlines PRO members: Get the instant download full report (PDF, 20 pages), here.
Business demand drives hiring, new competition for talent. Special to CPA Trendlines Fueled by new demand from business clients, CPA firms of all sizes are looking to expand audit and tax practices and pursue new new market segments, according to a fresh report on the accountant jobs market. (PRO members: Get the full report, courtesy CPA Trendlines.)