STRATEGY

Culture Due Diligence Is Real and Necessary

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Woman and man shaking hands in office conference room

A six-point road map to follow.

By Domenick J. Esposito
 8 Steps to Great

Over the last several years, there have been over 200 merger, acquisition, alliance and joint venture announcements by the Top 100 and other fast-growing CPA firms. Every indication is that these combinations will continue at a very rapid rate as CPA firms are:

  • Facing an aging partner group that usually includes the most effective relationship and business development partners. Baby boomers have been a home run for CPA firms.
  • Finding organic growth very difficult to attain with little prospect that business is going to dramatically improve in the foreseeable future.
  • Realizing an inability to attract an adequate supply of high-quality talent to help perpetuate the firm.

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CPA firm CEOs and other senior management are very effective at financial and operational due diligence, tracking results and holding partners accountable for hitting timely targets. On its face, an observer would tend to conclude that these 200+ combinations are very accretive to partner profitability after an integration period of 18 to 24 months.
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Time to Initiate Planning: What Do We Want to Accomplish?

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four businesspeople seated around table with whiteboard behind them

Why psychological safety is so important.

By Matt Rampe

You’re at the starting line! You know what strategic planning is and why it matters, and you’re ready to begin. This article will tell you all about how to start strategic planning. It’s called Stage 1: Initiate.

MORE: Why Strategic Planning Matters More Than Ever
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While we eventually will cover the whole 5i process, it’s worth noting that this process can be tailored to your firm, so feel free to take pieces of it that may apply and leave behind any that don’t, based on your situation. You’ll find many useful tools and ideas even if you don’t use the whole framework.
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Tax Season Winds Down and Strategic Planning Season Begins

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Coffee cup by napkin with words including "action plans."

Take your firm from good to great.

By Domenick J. Esposito
8 Steps to Great

It is often said that leading a CPA firm is like herding cats (everyone going in different directions), because many firms are very good at talking and planning about their future (it’s in their DNA), but terrible at execution and implementation.  It’s a little like the shoemaker’s shoes. Partners get distracted with client service or low-hanging fruit and give up too quickly in creating change within their own firms.

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If you are ready to take the first big step of moving from a merely good firm to a mid-market sustainable brand, then a strategic plan, with specific implementation tactics and accountability measures, is the absolute first step.  I would encourage you to begin the process with your partners as soon as possible.

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Why Strategic Planning Matters More Than Ever

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Ten benefits and ten challenges.

diagram
Based on a concept by Eric Teller, director of Google X

By Matt Rampe

Our world is changing at an increasing rate.

Eric Teller, CEO of Google X research and development lab, says that “even though human beings and societies have steadily adapted to change, on average, the rate of technological change is now accelerating so fast that it has risen above the average rate at which most people can absorb all these changes.”

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This probably will not come as a surprise. Artificial intelligence, cloud-based solutions, automation and data analytics are rapidly advancing and changing the way accountants work forever.

And the rate of change is not limited to just technology. Barry Melancon, former CEO of the AICPA, said, “We faced a level of disruption none of us had ever experienced before,” at the end of 2020, but the changes have not stopped or slowed. Similarly, in an Accounting Today article, current AICPA CEO Mark Koziel said, “You’re going to hear, ‘Disrupt, disrupt, disrupt.’ I hate that word. How many people want to be disrupted? How many people want a root canal? But the whole marketplace is being disrupted – it’s not just us.”
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Is Your Non-Billable Time Working for You?

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Time is money : clock hands on $100 bills

Make sure that business development is part of your firm DNA.

By Domenick J. Esposito
8 Steps to Great

Today, at many smaller firms, client service partners (defined as partners who devote 100 percent of their time on clients with no firm administration responsibilities), generate, on average, about 1,500 to 1,600 billable hours per annum.

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At most of the Top 100 CPA firms, client service partners generate about 1,200 billable hours per annum. That should be the absolute minimum at the Top 100 firms. Without breaking much of a sweat, client service partner billable hours at the Top 100 could and should easily reach 1,300 to 1,400 billable hours per annum.
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