BY L. GARY BOOMER
Areas to invest in
– and areas to cut
Gary Boomer, CPA, is the president of
Boomer Consulting, in Manhattan, Kan.
Firm management has improved over the past year. I am not referring to the fact that most firms have cut costs and
managed head counts better than in prior
years. I am referring to the fact that many
firms are now focusing on managing to a
“shared vision,” rather than a “shared services” model where often there is competition
for resources, rather than leverage.
The best-managed firms are focusing on
organic growth and positioning themselves
to offer services desired by clients and leveraging their trusted relationships. Yes, there is
considerable growth in some firms through
mergers, but is there organic growth today,
especially in the traditional services? The
question for many firms is where do we invest and where do we cut?
The answer will vary from firm to firm;
however, there are some core areas of concentration. I have chosen what I believe are
the top three areas of investment and the top
three areas to closely manage costs for sustainability and success.
The top three areas to invest in are:
1. Talent development.
2. Technology and process improvement.
3. Marketing and sales.
The top three areas to manage or cut are:
1. Rent and office occupancy.
2. Deferred compensation.
3. Excess capacity — especially outside of
The accounting profession is changing,
and leaders must think differently. All progress starts with the truth, so let’s assess the
current situation and then develop strategies
to best position your firm.
I state firm, rather than the individual. In
some firms, the tail is wagging the dog, rather
than the dog following a shared vision. There
are always those who are at risk from change,
so one of the first questions you must ask is:
Does the firm want to promote mediocrity or
excellence? The majority of people will say
excellence, but that doesn’t make it easy. Ex-
cellence requires discipline, a plan, the right
talent and accountability. Accountability
does more to improve a culture and improve
results than anything. Accountability is em-
powerment, not punishment.
Most firms say people are their No. 1 asset,
but do they treat them as an asset? Typically
no. In fact, most firms expense them and
don’t even utilize their abilities to a reasonable level. This is primarily due to the beliefs
behind the “push economy,” in which the
challenge is to budget and project demand
while inventorying capacity to meet the
demand. According to firm metrics, firms
charged less than 48 percent of total time
worked in 2009. This tells me that talent was
generally undermanaged, underutilized and
probably didn’t have the necessary skills inventory to meet the demand.
Under the pull economy, firms should
position themselves to have access to tacit
knowledge (knowledge and skills at the edge)
while internally having core capabilities. This
is brought about by technology and the platforms that allow “meshing” or sharing of resources, rather than ownership.
Sourcing is much broader than just in the
area of tax preparation. The Web-based digital
platform makes sourcing feasible. Technology platforms today leverage what is known
as crowdsourcing, where firms can have access to the best talent and knowledge. The
best firms will continue to invest in excellent
talent. Firms that develop talent won’t have to
worry about retention and attraction.
MARKETING AND SALES
Everyone is a great fisherman when the fish
are jumping in the boat. Fish are no longer
jumping in the boat, and firms are realizing that they need growth for sustainability.
Firms are also realizing that many of their
services are being commoditized or are no
longer in demand.
Not everyone is a great sales person or
marketer. Professional sales and marketing
people invest in developing their skills, just
like excellent accountants. Invest in professionals and don’t expect all of your client service personnel to be great in sales. Use the
There are great programs available to develop these people.
Again, technology plays a role. Many firms
have tried to control or resist social media in
their firms, while a few firms have embraced
it. Those who accepted social media with
the idea of influencing it are learning how
to leverage and profit from the technology.
Marketing and sales have been the first to
see positive results. Human resources with a
focus on talent develop has profited, and now
technical areas of the practice are benefiting
from social media.
TECH AND PROCESS IMPROVEMENT
Technology is broad-based and impacts every area of the practice. Those who are incompetent with technology are at a distinct
disadvantage, and their life expectancy as
top producers has past. Current technology allows firms to significantly reduce the
number of steps in their processes, and to
improve the quality of the service, as well as
the client’s experience.
Investing in the technology that allows tal-
ent to work from anywhere at anytime will
be key. Some of the high priorities for firms
Internet connectivity to the cloud (public
Content management (a digital platform
so you can share work among offices and
Knowledge management (transfer and
leverage internal and external knowledge);
Integrated systems, rather than siloed
Process improvement in tax, audit/ac-
counting and practice management in order
to leverage the technology; and,
Technology is the accelerator.
RENT AND OCCUPANCY COSTS
Many firms are faced with excess office space
or even space that is configured in a manner
that is not in accordance with today’s requirements. Do partners really need large offices
that are seldom used, or do they need access
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