THE PARTNERSHIP

Why Buying Into a Firm Is Such a Great Investment

By

Hand watering small plant in pot shaped like upward arrowCAUTION: Don’t get hung up on ownership percentage.

By Marc Rosenberg
How to Bring in New Partners

Accepting a partnership invitation offers two terrific, lifetime benefits to new partners that for most people cannot possibly be matched in any other career pursuit.

MORE: Four Philosophies for Managing a CPA Firm | How Partner and Staff Actions Impact Profits | Nuts and Bolts of Mentoring Staff | Nine Ways to Measure Staff Performance on the Path to Partner | Sixteen Duties of a Partner
GoProCPA.comExclusively for PRO Members. Log in here or upgrade to PRO today.

If they don’t see this and agree with it, then perhaps it would be unwise for them to accept the partnership offer.
READ MORE →

Rate Managing Partners in Six Areas

By

Blue pencil on survey formINCLUDED: Six tables to help you do just that.

By August J. Aquila
What Makes a Great Partnership

According to Marc Rosenberg, managing partners should focus on the following six areas:

  • Leadership
  • Profitability
  • Strategic planning
  • Team building
  • Learning/Training
  • Asset protection

MORE: Eight Ways Managing Partners Make a Real Difference | Ten Steps to a New Managing Partner | What Managing Partners Must Be Doing | Do Your Partners Pay Their Own Way? | How to Create Firm Accountability
GoProCPA.comExclusively for PRO Members. Log in here or upgrade to PRO today.

Each of these areas is important and worthy of further discussion. The size of your firm, number of partners/owners and the existing management team will influence the areas of importance. The following rating scale applies:
READ MORE →

Four Philosophies for Managing a CPA Firm

By

Closeup of businesswoman writing on a flipchartBONUSES: Org charts for small, medium and large firms, plus 25 best practices.

By Marc Rosenberg
How to Bring in New Partners

When we discuss how CPA firms are managed, there are two kinds of firms.

MORE: How Partner and Staff Actions Impact Profits | The Business Side of CPA Firms | It Shouldn’t Take So Long to Make Partner | Three Types of Skills You Need to Become a Partner | Seventeen Basic Expectations of Partners | Nine Ways to Woo a Prospective Partner
GoProCPA.comExclusively for PRO Members. Log in here or upgrade to PRO today.

The first kind of firm argues that there is not much that needs to be managed at a CPA firm. These cynics might say, “Come on. Running a CPA firm isn’t rocket science. You hang out your shingle. You get clients. You hire staff. You do the work. Bill and collect. What needs to be managed?”
READ MORE →

Experts: What It Takes to Become Partner

By

https://cpatrendlines.com/2021/04/29/industry-experts-speak-on-partner-competence/
Dobek, Tierney, Baker

First, consider why you want it.

By Martin Bissett
Passport to Partnership

The skill in producing financial reports is limited by the quality of the information presented to the CPA by the client. The motivation of the client to influence that financial information comes in many forms, some intentional and some unintentional. Competence comes first in being able to resist pressure and present a true and accurate position of the client’s organization.

MORE: Business Won’t Come to You | Win Your First Client: Yourself | Perception Is Reality, Client Version | 10 Questions for Reconsidering Your Prices | Would You Make Yourself a Partner? | Prepare the Next Generation Now
GoProCPA.comExclusively for PRO Members. Log in here or upgrade to PRO today.

Sounds obvious, doesn’t it? But there’s a twist.

Competence doesn’t actually rank highly among the requirements for partners in our study at all.
READ MORE →

Eight Ways Managing Partners Make a Real Difference

By

Friendly business team looking at tablet in office lobbyWant to play at the peak of your game?

By August J. Aquila
What Makes a Great Partnership

So, what do the truly successful managing partners do that differentiates them from their peers? In this short post I will quickly summarize the results of my research, which entailed interviewing 150 practicing and managing partners in a cross-section of consulting, accounting and law firms across Europe and the U.S., before focusing on the things great managing partners did to ensure they were always at the top of their game.

MORE: Ten Steps to a New Managing Partner | Five Ways to Keep Your Edge as a Leader | Managing Partner: The Toughest Job in the World | Why Partners Need Written Goals | Eight Criteria for Partnership | How You Can Get Partners to Change
GoProCPA.comExclusively for PRO Members. Log in here or upgrade to PRO today.

The Model

This model of what successful managing partners do is adapted from the leadership model in “When Professionals Have to Lead,” which Rob Lees co-authored with Tom DeLong and Jack Gabarro. I have used the same overarching dimensions of Direction, Commitment, Execution and Personal Example and added Context to reflect its impact on what firm leaders need to do.
READ MORE →

Ten Steps to a New Managing Partner

By

Three people standing, smiling and talking in an office walkwayHow to execute a smooth, graceful transition.

By August J. Aquila
What Makes a Great Partnership

One of the most difficult events that a firm faces is the transition of power from one managing partner to another, especially when it’s the first time. Knowing when to pass the baton and how to pass it are critical decisions every firm will have to make.

MORE: Five Ways to Keep Your Edge as a Leader | Five Reasons That Leaders Fail | Eleven Things Partners Must Do | Seven Keys to Becoming an Equity Partner | How to Achieve Partner Unity | The Seven Building Blocks of a Great Partnership
GoProCPA.comExclusively for PRO Members. Log in here or upgrade to PRO today.

The most important thing you can do at this point is to plan, plan and plan some more for the transition. The sooner you lay out your plan, the easier it will be for you to achieve it.
READ MORE →

How Partner and Staff Actions Impact Profits

By

SeniorBusinessman5Others_a-31774-629Six specific examples, plus benchmarking norms.

By Marc Rosenberg
How to Bring in New Partners

These four metrics are key to any analysis of CPA firm profitability.

  1. Fees per equity partner. The firm’s billings divided by the number of equity partners. This is one of the ways we measure leverage. The more billings each partner can manage, the higher the firm’s profit margin.

MORE: The Business Side of CPA Firms | Public Accounting as a Business, 101 | 16 Steps to Creating a Partnership Path | Six Ways New Partners Differ from Managers | The Four Essentials for Every New Partner

GoProCPA.comExclusively for PRO Members. Log in here or upgrade to PRO today.

On average, partners do 10-15 percent of all work performed for clients; the remaining 85-90 percent is performed by staff under the partners’ supervision. The higher the percentage of client work the partners perform, the harder it is for them to find the time to build their client base and help the firm achieve a high fees-per-partner ratio. To manage a large client base properly, partners need to delegate as much of the client work as possible to staff.

READ MORE →

The Business Side of CPA Firms

By

Four ways to increase revenue. Four reasons that employees should care.

By Marc Rosenberg
How to Bring in New Partners

Future CPA firm leaders must have an understanding of how their firm operates as a business, including how it makes money and what holds back profitability. With this knowledge, team members will make better decisions about how they spend their time and perform their work.

MORE: Public Accounting as a Business, 101 | Nuts and Bolts of Mentoring Staff | Nine Ways to Measure Staff Performance on the Path to Partner | Sixteen Duties of a Partner | Five People to Keep Out of Partnership
GoProCPA.comExclusively for PRO Members. Log in here or upgrade to PRO today.

All businesses have economic structures unique to their industries:

  • Grocery stores are high volume, low profit margin.
  • Real estate ventures use accelerated depreciation and other tax angles to generate cash flow and healthy ROIs.
  • Professional sports teams focus on increasing the value of the franchise so it can eventually be sold for a gigantic profit.

The typical CPA firm is a low-volume, high-priced business, with a relatively high profit margin (generally 30-45 percent of revenue).
READ MORE →