Head of Accounting Firm Blues

I’m sad and blue. What I’m about to write is completely fresh. It happened about two hours ago.

From time to time as I travel around Australia seeing clients and the like I make an offer to accounting firms that I bump into to come and present the key findings of the book I authored last year titled “What do Accounting Clients Really Want?”  I do this for no charge. However, I really like it when they give me a sandwich to munch on.

I’m travelling to another mainland city next week and wanted to meet with the managing partner of a top ten accounting firm. I know this firm’s national network quite well. If he was interested I was more than happy to present to his partners/staff. If there was no interest I suggested in my last email that perhaps we could get together over a coffee and chat about subjects of mutual interest. So over the last couple of weeks I sent two emails and followed up with a phone call and got no response. Which I thought was odd.

Never wanting to lose the opportunity to meet someone new I tried one more time and phone the managing partner’s office. Within a couple of rings he picked up. I explained in a polite tone who I was, referring back to the dates of my emails and my phone message. The reply he gave me make my jaw drop.

“I would have thought that my non-response to your emails and phone message would have told you I have no interest.” He stated in a slow and clear manner.

I replied that I thought a person of his station as the managing partner of a top 10 accounting firm would have had the professionalism to write me a one line email saying “thank you, but no thank you.”

If I had a second jaw it too would have dropped in reaction to what was then said by the managing partner. He stated, “I’ve been accussed of being too curt in my use of email. So there is no point sending you one”

Hmmm …. in other words our managing partner “doesn’t do email.” How disappointing that this particular chap is not comfortable with the no.1 communication medium in business – not just now but for the last 15 years!

Its guys like this that reinforce the image that the accounting profession is behind the times 🙁

All my best,

James E


Updating the accounting practice

The other day I was reading through the website and came across a most interesting article written by Steve Erickson – an accounting firm consultant based in the US. To be honest I’ve never given the area of changing roles within the firm much thought before since my focus is on the client side. However, Steve’s insights got me thinking about how changing roles can help make firms more effective in serving their clients. Enjoy the read below! (source

I have been giving quite a bit of thought to the cost/price squeeze facing many CPA firms. Salary and benefit costs are at an all time high as a percentage of net revenue and profit margins have been decreasing for a number of years.

This is, in many cases, due to the upward delegation of routine tasks to experienced accountants just because they have scanners and computers on their desks.

Technology is supposed to replace high cost labor, not the reverse. As a result we have many of our best and brightest performing clerical tasks in an inefficient manner. CPA Firm staffing choices can make a significant impact on bottom line and overall firm performance.

Bill Gates once said: “The first rule of any technology used in a business is that automation applied to an efficient operation will magnify the efficiency. The second is that automation applied to an inefficient operation will magnify the inefficiency”

I have come to realize that the CPA profession is operating by the second rule in many instances.

It is time to rethink your staffing models to make sure you have employees with the right skills to perform certain tasks.

Here are a few that come to mind:

1. Data Management Specialist — An employee that prepares and files electronic data for use by the professionals in the firm. This year I have been in firms where $100,000-plus managers are preparing PDF documents. It’s really hard to make money with this cost structure. Hire an expert in electronic documents. Costs will go down and productivity will increase.

2. Email Expediter — An employee who files email into folders for use by the professionals. According to a survey I recently conducted, professional staff are spending in excess of 1 hour per day dealing with email. In a firm with 25 professionals with an average billing rate of $150 this represents almost $1,000,000 in potential lost fees every year. I have no doubt that this position would pay for itself many times over in the span of a year.

3. Technology Coordinator — Hire some folks who really know the software and can become expert in its application. Let your professionals focus on professional matters. I’m not saying to not allow professionals to use software. I’m just saying they shouldn’t have to become software experts to practice public accounting. Just look at all the training costs and lost efficiency simply due to the lack of expertise in software use.

Keep smiling and bye for now,

James E

Information overload? (3 of 3)

Here is the last installment of the mini series courtesy of the big guns @ McKinsey (they really seem to know their stuff) This latest extract is a little on the long side – but the material is too worthwhile to cut!

So if multitasking isn’t the answer, what is? In our conversations with CEOs and other executives trying to cope, we heard repeatedly about some fairly basic strategies that aren’t very different in spirit from the ones Drucker described more than 40 years ago: some combination of focusing, filtering, and forgetting. The challenge for these executives, and all of us, is that executing such strategies in an always-on environment is harder than it was when Drucker was writing. It requires a tremendous amount of self-discipline, and we can’t do it alone: in our teams and across the whole organization, we need to establish a set of norms that support a more productive way of working.

The calendars of CEOs and other senior executives are often booked back-to-back all day, sometimes in 15-minute increments. Gary Loveman, CEO of Harrah’s Entertainment, describes the implication: “You have to guard against the danger of overeating at an interesting intellectual buffet. I often need to cover a lot of functional terrain over the course of a day, but I’m careful not to be too light on deserving topics and to make the time to get to meaningful depth on the most important ones.”10 Digital information overload compounds the peril of “overeating” by f looding leaders with a variety of questions and topics that frequently could be addressed by others, thereby distracting those leaders from the thorny, unpleasant, and high-stakes problems where they are most needed.

Many executives respond through the old strategy of creating “alone time.” Applied Materials CEO Mike Splinter, for example, finds time between 6:30 and 8:00 AM; Dame Christine Beasley, England’s chief nursing officer, uses her traveling time; Brent Assink, executive director of the San Francisco Symphony, schedules any time he can find in the middle of the day. Bill Gross, chief investment officer at Pacific Investment Management Company (PIMCO), takes an extreme approach: “I don’t answer or look at any e-mails I don’t want to. I don’t have a cell phone; I don’t have a BlackBerry. My motto is, ‘I don’t want to be connected; I want to be disconnected.’”

None of this can work, says Assink, unless the management team knows it must keep moving throughout the day without rapid-fire input from the top. Assink has been explicit with his staff: “If they want an immediate response, it will have to be a phone call. If they send an e-mail they will get a response at the end of the day.” What about the relentless barrage of information that pours in?

Managing it may be as simple—and difficult—as switching off the input. Shut down e-mail, close Web browsers, have phone calls go automatically to voice mail, and let your assistant and team know that you are in a focused working session. Christine Beasley says, “If you’re really addicted and can’t be trusted not to check the BlackBerry when it’s in your pocket or bag, you just have to leave it behind.”

Of course, turning everything off just means that your inbox will be overflowing when you reconnect. And there’s a danger of throwing out the baby with the bathwater: no one wants to lose the ability to stay in touch easily with the organization, customers, and other stakeholders or to “give a short and direct answer to quick questions,” as Mike Splinter puts it, adding that “you don’t want to be the blockade in the business cycle.”

A good filtering strategy, therefore, is critical. It starts with giving up the fiction that leaders need to be on top of everything, which has taken hold as information of all types has become more readily and continuously accessible. Rather, plain old delegation is as important with information as it always has been with tasks. As Gary Loveman says, “Keeping current on what is going on takes a lot of my time, but I only engage in depth personally on those issues that are best served by my involvement and are critical to the company’s performance, either now or in the future.” Christine Beasley has a similar view: “You cannot read everything. The things that I do look at are the things that matter, the things I really need to make a decision on.”

Some leaders now explicitly refuse to respond to any e-mail on which they are only cc’d, to filter out issues that others think require no action from them. You also may need to educate the people around you about what deserves to fill your limited time. Gary Loveman explains that “there is a substantial ante to get my time—you need to do some work, provide me with data and insight, let me read something in advance. That simple bar keeps a lot of the items of lesser importance off my calendar.”

Winning respect for your in-box, though, won’t get you all the way there. Establishing an effective, day-to-day information-management support structure has become a critical success factor for senior executives. This structure may be elaborate, including a chief of staff for the CEO of a major organization, or as simple as a capable assistant who “is fantastic at managing some of my e-mail traffic, weeding out the things that I don’t really need to see,” as Christine Beasley says.

It bears repeating that giving our brains downtime to process new intellectual input is a critical element of learning and thinking creatively— not just according to researchers, but also to corporate leaders. Bill Gross says, “Some of my best ideas literally come from standing on my head doing yoga. After about 15 minutes of yoga, all of a sudden some significant light bulbs seem to turn on.” Mike Splinter also sees value in physical exercise: “I find that just staying in shape helps me be more mentally crisp every day.”

Getting outside helps—recent research has found that people learn significantly better after a walk in nature compared with a walk in the city. And emotional interaction with other people can also divert attention from conscious intellectual processing, a good step toward engaging the unconscious. Sheri McCoy, chairman of Johnson & Johnson Pharmaceuticals Group, explains, “When I go home at night, I like to just say, ‘OK, I’m not looking at my BlackBerry for two or three hours.’ I’m just relaxing. I feel like that lets me conserve my energy and focus later.” Christine Beasley has rules that protect her personal time at weekends, reasoning that “people can always get hold of me if is an emergency”

Over to you focus, filter & forget!

See you next post,

James E