By Marc Rosenberg
The Rosenberg Practice Management Library
There are two cases for heavy managing partner oversight in practice development.
First case. CPA firms are very top-line-oriented businesses. Expenses are largely fixed because most are for personnel compensation and benefits, so opportunities for increasing profits from cost-cutting are greatly limited. As a result, increases to the revenue or top line often fall directly to the bottom line. It’s easy to see why, far and away, increasing revenue is the most effective way to increase profitability. Because the managing partner is (or should be) responsible for the firm’s profits, it makes total sense for the managing partner to play a major role in the firm’s growth.
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Second case. If a firm’s staff is its most important asset (or at least tied with clients), then revenue growth is the firm’s life-giving force. Without revenue increases, firms become stagnant and die a slow death. Therefore, revenue growth requires heavy involvement by the managing partner.