Inside a Partner Comp Committee

How buyout was affected.

By Marc Rosenberg
The Rosenberg Practice Management Library

We worked with a 10-partner CPA firm a few years ago to change their income allocation method from an incredibly complicated formula that was deeply flawed to a compensation committee (CC). We talked to the partner group recently to get their feedback on how things worked out.

MORE: Rewarding Partners for Seniority: Pros and Cons | What If Founders Don’t Want to Buy Each Other Out? | When CPA Partner Votes Go Wrong | Why Billing Less May Mean Earning More
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Why did you adopt the CC? It embraces the fundamental concept that an accounting firm’s success depends on its partners’ production and intangible attributes such as management, leadership, mentoring staff, and teamwork, among others.
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Where the Jobs Are (and What You Need to Get Them)

Salaries, job openings and unemployment rates
Salaries, job openings, and unemployment rates

BONUS: Salary ranges and top markets.

By Beth Bellor
CPA Trendlines

Everyone knows there are jobs to be had in the accounting profession. But exactly where are they, and how much do they pay?

MORE ON JOBS: CPA Firms Post 5% Growth Rate | How to Set Your Firm Apart to Recruits
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According to new CPA Trendlines research, the number of accounting and finance jobs available now tops 200,000. Where they geographically vary by position.
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CPA Salaries Projected to Advance 3.7% in 2017

Excerpt from new Robert Half Salary Guide
Excerpt from new Robert Half Salary Guide

Firms jockey for best recruits.

By CPA Trendlines Research

CPA firms should be braced to pay more and further improve their workplace offering perks to attract top talent, according to staffing firm Robert Half International.

The already hot market for hiring is stoked to get even more heated with RHI predicting that starting salaries for accounting and finance professionals will increase by an average 3.7 percent in 2017. That’s the second highest level of pay hikes projected for all major professional employment sectors nationwide, trailing only the white-hot technology sector, where it sees average starting pays rising 3.8 percent.

The Menlo Park, Calif., firm warns that “competition for top talent can be fierce,” and notes that many firms are already increasing salaries and bonuses to be tops in their local market areas or business niches. “With skilled professionals in high demand and short supply, more employers are willing to negotiate compensation with potential hires,” said Paul McDonald, senior executive director at RHI.

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How Much Do Partners Earn? And Why

Dollar on Question MarkBONUS: The 18 factors that drive partner pay.

By Marc Rosenberg

What do CPA firm partners actually earn?

MORE ON PARTNER COMPENSATION: How Partners View Compensation: It’s Not All about the Money | Why Most Partner Comp Systems Are Performance-Based

The statistics below usually vary by the size of the population market, though our experience working on numerous client projects with firms in small markets has shown that it is quite possible for firms in small markets to earn “large market” income.

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Why Most Partner Comp Systems Are Performance-Based

Handshake

To perform well, partners need to work hard every year.

By Marc Rosenberg
Partner Comp: Art & Science

Any discussion of partner compensation must start with a fundamental concept: Should a partner group’s income allocation system be performance-based?

MORE ON PARTNER COMPENSATION: What Partners Earn and How They Earn It | Partner Compensation: An Art, Not a Science | How Partners View Compensation: It’s Not All about the Money | Why Most Partner Comp Systems Are Performance-Based

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The fact is: Compensation motivates performance.

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Today’s Top Six Partner Compensation Trends

Money in hand

Why so many pay-for-performance plans are a flop.

By August Aquila
Creating the Effective Partnership

Many of us, including myself, thought that the right compensation plan would solve the answer to underperformance and motivation. Over the last ten years or so, firms have moved from a formula-based plan to a pay-for-performance plan which takes into consideration, production, business development, value enhancement and behavioral factors. And, while this has helped place more emphasis on performance, it hasn’t been a magic bullet. Why are so many firms still missing the boat when it comes to motivating partners and staff to perform at a higher level?

MORE on LEADERSHIP: 5 Questions About Your Firm’s Direction | 6 Reasons to Keep Partners from Retiring | 6 Reasons Why CPA Firms Fail in Innovation | 6 Steps to Handle Staffing Problems in a Merger | 7 Signs Your Firm Is Headed for an Implosion | It’s Not Always about Money: 16 Tweaks for Your Comp System | Eight Key Goal Areas for Partners | Like Herding Cats: Partners Must ‘Walk Together’ | Managing Partners Must Remember Partners’ Needs | New Times Call for New CPA Firm Metrics | Partners Have Love-Hate Relationship with Leadership | 6 Things Leaders Must Do | 8 Financial Ducks to Line Up Now| Partnership Is About Persuasion

Janice Kaplan, in the new book, “The Gratitude Diaries: How a Year Looking on the Bright Side Can Transform Your Life,” refers to a survey on gratitude in which some 80% Americans say that receiving gratitude makes them work harder, but only 10% of the survey respondents managed to express gratitude to others on a daily basis.

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Industry Employment Surge Shows No Signs of Slowing

Chart showing number of employees in the accounting industry according to Bureau of Labor Statistics
All employees in the accounting and bookkeeping industry; numbers reported in thousands

Record highs seen in overall employment, staff wages, CPA firm employment and staff, and more.

By CPA Trendlines Research

The U.S. tax, accounting and bookkeeping industries show no signs of slowing down, according to CPA Trendlines sources.

Here CPA Trendlines reports on:

  • Current hiring trends in each of the bookkeeping, tax, payroll and CPA segments of the industry.
  • Average hourly wages for key segments.
  • Typical hours worked per week.
  • And trends concerning women in the accounting workforce.

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CPA Trendlines Forum: Tax Season Prep Tips?

Readers’ Forum: Hours worked. Firing clients. Setting prices.

Chris Basom
Chris Basom
  • 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 season, she also asked, “How many people touch a return? Why?” READ MORE →