OUTLOOK & ANALYSIS

Partner Aging Strikes Smaller Firms the Hardest

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older man and younger man in meetingAs partners work longer, average partner incomes decline.

The aging in the partner ranks of the CPA profession is by far most prominent at  smaller firms, according to the most recent edition “The National MAP Survey of CPA Firm Statistics.”

At firms with less than $2 million in fees, the percentage of partners over the age of 50 has risen to a startling 73.3 percent, up from 65.4 percent last year.

And at firms with fees of $2 million to $10 million, the number has risen to 66 percent from 65.3 percent. READ MORE →

When Experience Doesn’t Add Up

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Ed Mendlowitz CPA The Practice Doctor Q and ABy Ed Mendlowitz
The CPA Trendlines Practice Doctor

QUESTION: I need to hire an experienced person and am looking for someone with two to three years’ experience. I know you don’t think this is advisable. Why not?

RESPONSE: If you hire people who already had their first job, the chances are they were not trained your way, and something happened that made them want to leave that is still in them and will be duplicated in some form in your firm.

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Before Negotiations Begin: 18-Item Checklist for a First Meeting

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The “getting-to-know-you” stage for prospective buyer and seller

By Marc Rosenberg
CPA Firm Mergers

All merger discussions have to begin somewhere. After merger candidates have been identified, there obviously needs to be an initial meeting for the two firms to get acquainted.

Everything is confidential and informal. No exchange of financial statements.  The two parties simply spend an hour or two – you guessed it – getting to know each other.

Many firms like to convene this meeting over breakfast or lunch because meeting at a restaurant gives the encounter an air of informality and sociability.  Other firms like to do this in the larger firm’s office so that the smaller firm can get a “house tour.” READ MORE →

8 Times When Hourly Billing Trumps Value Pricing

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Ed Mendlowitz CPA The Practice Doctor Q and AAnd when it doesn’t.

By Ed Mendlowitz
The CPA Trendlines Practice Doctor

QUESTION: I am trying to switching to value pricing and am having trouble getting completely away from time-based billing in certain situations.

RESPONSE: Value pricing is a great method and concept. I suggest reading, and thoroughly understanding Ron Baker’s “Implementing Value Pricing: A Radical Business Model for Professional Firms.” I like what he suggests, have used some of his techniques even before he started writing and speaking about them, and recommend it in many situations.

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6 Reasons CPA Firms Fail at Succession Planning

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Plus: Making the math work.

By Marc Rosenberg
Retirements & Buyouts

Why are CPA firms deficient at succession planning?

It is abundantly clear that CPA firms have succession planning challenges. Partners overwhelmingly prefer the exit strategy of passing on the firm to younger partners vs. merging out of existence. But history shows that the vast majority fail at moving their firms into the next generation. What holds them back?

The answer lies in the classic Pogo cartoon line: “We’ve seen the enemy and the enemy is us.” READ MORE →