The Essential Managing Partner’s Guide to Running a CPA Firm Like a Business.
By Marc Rosenberg CPA
The key to success in any organization resides in its management and leadership. But effective management is elusive to many CPA firms because the partners are neither trained nor skilled at it.
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This is a must-read for partners who want to run their firm like a real business. This monograph provides firms with best practices for managing and structuring the leadership group, how decisions get made, voting systems, how committees function, and the role and responsibilities of partners.
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- The Managing Partner
- How decisions are made
- Organization structures for various firm sizes
- Job descriptions of key management positions
- How voting works
- Firm governance styles
- The role of strategic planning
- Role/expectations of a partner
- Partner accountability
- Partner communications
- Partner systems
- Role of committees
A Special Message from Marc Rosenberg, CPA:
If I’d written this monograph prior to, say, 2005, the title would have simply been "How to Manage a CPA Firm." But in recent years, a new term began being used by CPA firms: Firm Governance. Since the use of “governance” is clearly on the rise, we simply had to include this term in the title.
I gave a lot of thought to what “governance” means, what “management” means, how they are alike and how they are different.
I sought out the opinions of several other CPA firm consultants and their responses were, as they always are, enlightening and insightful. Their major conclusions were:
1. Today, when people use the term “firm governance,” they refer to formal, written rules and bylaws for making decisions such as voting and defining authorities of the MP and other individuals and committees. Two of my colleagues summed it up with “who does what.”
2. “Management” is the implementation of goals, policies, procedures, planning and holding people accountable, all related to the execution of decisions made. Management is the process of making sure everyone knows what to do and managing them to make sure it gets done.
Until 2005 or so (my guess at when “governance” became in vogue), there was very little thought given by managing partners and consultants to the fine distinction between these two terms. Management was clearly the all-encompassing term, with governance being a subset of it.
I would like to share an insightful quote from a friend and colleague: “Leadership is a whole other subject. If you want to understand the difference between leaders and managers you look to where their power comes from. Leaders derive their power from the consent of the people (partners). Managers derive their power from the organizational hierarchy. Leaders do not need titles. Managers always have titles."
I hope you find the mongraph useful and, most of all, profitable.
Marc Rosenberg, CPA
TABLE OF CONTENTS
CHAPTER 1: INTRODUCTION
CHAPTER 2: MANAGEMENT & LEADERSHIP
— Leadership vs. management vs. administration
— Management philosophy of a CPA firm
CHAPTER 3: STYLES OF MANAGEMENT
— Partnership style
— Corporate style
CHAPTER 4: THE MANAGING PARTNER
— Two types of managing partners
— 25 Best Practices For the Firm
— How should the Managing Partner be compensated?
CHAPTER 5: KEY MANAGEMENT POSITIONS
— The COO/Firm Administrator
— Marketing Director Job Description
— Human Resources Director Job Description
CHAPTER 6: CPA FIRM COMMITTEES
— Executive Committee
— Compensation Committee Best Practices
CHAPTER 7: ORGANIZATION STRUCTURES
— How governance structure changes as firms grow
— Why CPA firms departmentalize
CHAPTER 8: NON-EQUITY PARTNERS
— Comparison chart: equity vs. non-equity partners
CHAPTER 9 : HOW DECISIONS GET MADE
— Voting decision grid
CHAPTER 10: PARTNERSHIP AGREEMENTS
— Retirement plan/partner buyout
— General partner agreements
CHAPTER 11: THE ROLE OF A PARTNER
— What do partners owe their firms?
CHAPTER 12: PARTNER ACCOUNTABILITY
CHAPTER 13: BRINGING IN A NEW PARTNER
CHAPTER 14: PARTNER COMPENSATION & RETIREMENT SYSTEMS
— Partner compensation decisions to be made
— Partner retirement/buyout: what firms are doing
CHAPTER 15: STRATEGIC PLANNING
CHAPTER 16: PROFITABILITY
CHAPTER 17: PARTNER COMMUNICATIONS.
CHAPTER 18: CONCLUSION
ABOUT THE AUTHOR
MARC ROSENBERG, CPA
CPA Trendlines commentator Marc Rosenberg is a nationally known consultant, author, and speaker on CPA firm management, strategy and partner issues.
President of his own Chicago-based consulting firm, The Rosenberg Associates, he is founder of the most authoritative annual survey of mid-sized CPA firm performance statistics in the country, The Rosenberg Survey, also available from Bay Street Group. He has consulted with more than 700 firms throughout his 20+ year consulting career.
Accounting Today magazine annually acknowledges Marc Rosenberg as one of the 100 most influential people in the CPA profession and INSIDE Public Accounting has repeatedly recognized him as one of the ten most recommended CPA firm consultants in the country.
Click here to see him on CPA Trendlines.