- People mix / selection. You’ve probably heard the term ‘get the right people on the bus in the right seats on the bus’. Nothing could be truer. There are hundreds of thousands of great people you could employ – they just currently don’t work for you. The better your people the better your business. Do not accept anything but the “A” team. Get rid of the cancerous terrorists on your team. They will want to recruit others into their little gangs. Give everyone a chance to be coached – then fire fast if they are not with you.
- Capacity model. Are you building capacity before you need it? Most Accounting firms do not. They seem afraid to hire the $100K plus person in fear of no work to get a return on the salary. A $100K person is really only $400 per day in hard costs. With the amount of opportunity out there and the amount of low level work that a partner does I am sure you could find $2k per day in work for this person to do! Hire the good ones and you’ll generate the work.
- CSC Admin team. Most firms run their administration team at 10-15% of their total headcount. Somehow partners have a belief that because the administrators are not ‘charging time’ then they are a cost and therefore ‘not worthy’. My research shows that Accountants spend around 20% of their day doing administration work. If you hire more administrators (what I like to call Client Service Coordinators – CSCs) and delegate those tasks to them – then the Accountants capacity can increase and you can do more work for less cost. Some of the most profitable firms I know have their administration headcount at 30% – 40%.
- Training / Development. Your professional bodies/associations demand 30-40 hours each year of ‘professional development’ and nothing on personal or business development. This is crazy. It is breeding more technical accountants but not better people skills or business skills. Make sure you invest heavily (weekly) in non technical training. Your business will better off for it.
- Implementation process. An idea worthy of implementing should be implemented. Many Accountants have great ideas and they just go by the by. To implement any idea you must allocate the time and do it. You need a structured process. A list of actions, to do’s and projects is just that. Yes, start there but do not FTI – fail to implement. They will not implement on their own. Give the worthy idea to someone on your team to implement. Most partners of Accounting firms are lousy implementers. They are best seeing clients and selling.
- Management / Leadership. Q. Where did a partner of an Accounting firm learn how to manage or lead? A. Hmm – from the partners they worked for. So where did those partners learn how to manage or lead? You guessed it. From the partners they worked for. Management is not leadership and leadership is not management. Leaders need to inspire by being inspiring. Accountants are supposed to be the leaders of business. Would you like to be lead by you?
- Team performance. It’s very simple to see how well a team in an Accounting firm is performing. Just look at the revenue per full time equivalent person (FTE). That is a measure of the entire team – including administrators and partners. Most firms have revenue per FTE at around $125k – $175K. That’s very very low. If the leadership, people mix, methods, pricing, services, efficiency and clients are close to right then revenue per FTE should be well over $300K person. What’s yours?