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Fewer Clients with Higher Realization? Spend More Time with Those Better Clients?

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Some live it, some dream it, and some say it can never happen. Where do you stand on the topic of realization and the role that it plays in your practice? These insightful, very brief video clips are a useful resource that I want to share with you. If you’re trying to get a better handle on realization, you’ll jump on this like a hobo on a ham sandwich.

How does continuous monitoring help you improve realization?

How do people know where they stand against realization targets?

How does early-warning of realization issues help your firm get paid?

How has better visibility of realization improved management of the firm and morale of the staff? 

What if realization just doesn’t improve?  When is time to let a problem-client go?

How do you enforce realization goals across the firm?  Is everyone “bought in?”

Workers 7

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As The Audit World Turns: Interview with Francine McKenna

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Meet one of today’s leaders in the accounting profession, Francine McKenna, CPA. With more than twenty-five years of experience in consulting and professional services including tenure at two Big 4 firms, both in the US and abroad, Francine has a lot say. Through her speaking engagements, articles, her blog re: The Auditors, and more, Francine lays it on the line. Smart, engaging material…spectacular reading, I must say.

Q: Coming from a Big Four background, you’ve carved out a very interesting niche for yourself. Was this by design?
When I look at all my experience I see a straight line through the scatter diagram that’s led to writing and to writing about what I know the best and am most interested in the world of business. I can’t say it was by design but I don’t do anything by default. I just create as many options as possible. I started out at the end of ’06 thinking the blog would be the platform for a book. I haven’t yet written the book. But the blog took off, mostly because of what started happening in 2007 then 2008. The more I wrote about the business of the big four firms in a critical way, the less employable at what I was doing before I was. And the more attention I got for my writing the more I wanted to write. So I committed to write as well as I could and make it a success, at least professionally.

Q: Any insights on where the future of auditing is headed? Or the future of Big Four (or whatever number that’s going to be)?
I would agree with PCAOB Chairman Jim Doty’s latest comments: “The audit industry is flirting with stagnation.” I said on Twitter that the industry is worse. It’s whoring for quarters, selling audit as a commodity again, capitulating to executives to save the engagements and looking for consulting to save the day. We’ve come full circle in ten years since SOx.

Q: If a young professional told you he/she wanted to get into auditing, what would you tell them?
Go into consulting instead.

Q: What would you most like the accounting profession to know about what’s going on in Washington D.C.?
There are good people in Washington DC who want to serve the public. Fortunately for the audit industry they are few and far between. Most from both parties can be bought. Unfortunately, it’s going to cost lobbyists and the audit industry PACs more and more to buy them and politicians are fickle. You have to keep paying to maintain their attention and loyalty.

Q: What’s the most rewarding aspect of what you do on a daily basis?
When journalists I respect say I’ve written something with impact. When my parents say don’t stop because I’m finally using my talents.

Q: What have been some of the key things you’ve learned throughout your career? What might you do differently if you could go back in time?
If I could go back in time I wouldn’t listen to anyone who said I had to wait to earn bigger pay and bonuses, to get my stripes first. I was doing the work well. I deserved to be rewarded for it long before I ever was.

Q: What’s in the future for Francine McKenna?
I just started in the Masters in Liberal Arts program at the University of Chicago. I want to teach. I’ve been visiting a lot of universities lately, talking with students and faculty. Before too much longer I’d like to fully live the life of the mind. And I will write a book, but it may be fiction.

Francine McKenna 1

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iShade is THE accounting news source (keep it open on your computer every day).
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Adding Onion to the Accounting Burger: The Tom Selling Interview

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Ever read The Accounting Onion? It’s a great addition to our profession’s giant accounting sandwich. Find out more about its creator, Tom Selling PhD, CPA, in this delightful, informative interview. You’ll never think about an onion the same way.

Q: What would you most like the accounting profession to know about what’s going on in Washington D.C.?
Ever since the FASB and IASB have embarked on convergence, it seems that the SEC has disengaged itself from accounting standard setting. The result, I believe, is that standard-setting projects take forever; because there is no longer a credible threat that the SEC could preempt a stalled or misdirected process by issuing its own guidance. For example, it seems to me that bankers, and not the SEC, are effectively the clients for the proposed loan impairment standards. The bottom line is that I don’t think the SEC is doing its part to ensure that low-quality accounting standards will not play a role in any future financial crisis.

Q: How did The Accounting Onion come about?
I took early retirement from university teaching about seven years ago.  I have to say that the 25-year cumulative effect of petty politics from life as a faculty member was becoming unbearable; so I reluctantly left classroom teaching to focus on my consulting practice and a software company (www.grovesite.com) I had started with two other partners. I knew that a web presence would be essential for visibility and networking, and I had also discovered that search engines particularly favored blogs, ostensibly because of the relatively more current content that blogging generated — as opposed to static websites.   But, those practicalities aside, I think that blogging was also providing me with a source of stimulation that I missed by no longer being in academia on a day-to-day basis.

Q: I love how you describe The Accounting Onion with the line: “Peeling away financial reporting issues one layer at a time.” What motivates you to keep that garden growing?
I don’t know if “motivation” any longer describes what drives me to blog. It feels more an addiction! Seriously, I do miss the classroom, and I’m fortunate that blogging to inform my readers, and perchance to provoke decision-makers, has been a very fulfilling experience for me. You’re supposed to blog about what you know, and I was worried at first that I would run out of pet peeves to write about in fairly short order. But, even though my perspectives and philosophy on financial reporting have stayed relatively fixed, events like the financial crisis, international convergence and other regulatory developments continue to add to the complexity and uncertainty of the financial reporting environment. For me, as a blogger, it’s been like a gift that keeps on giving.

Q: The world of accounting has obviously changed dramatically during your lengthy career. What has surprised you in terms of what public accounting firms have done (or not done)–both positively and negatively?
The professional ethics rules emphasize that the “P” in CPA is paramount. Our government-granted franchise as gatekeepers to the public capital markets must be predicated on the principle that conscience, rather than the financial bottom line, will drive our actions as professionals— both individually and as firms. This, I believe, is the real “expectations gap.” Everybody knows to a certain extent that, even in ideal circumstances, audits and other assurance services are not panaceas. But, perhaps starting with the Enron debacle, the public is starting to realize that there is little to differentiate the motives and actions of the AICPA from other powerful and widely resented political lobbies. I have been a member of the AICPA for about 35 years, and this more than anything disappoints me.

On the bright side, though, I never cease to be amazed at the quality of reference resources that the international firms put out on the web for free. The Accounting Standards Codification by the FASB has largely been a very positive development; however sometimes it can make both new and old standards more difficult to read, in part because the topical organization of the Codification means that the main message of a standard is dispersed and no longer self-contained in one relatively readable document. Perhaps, the firms realize this shortcoming, and that’s one reason why they do such an excellent job of providing summaries, detailed explanations and examples. It seems like the firms compete with each other to have the highest quality free materials, and I am extremely grateful for that.

Q: What have been some of the key things you’ve learned throughout your career? What might you do differently if you could go back in time?
That’s a difficult question for me to answer, because I’ve always enjoyed my work and have had a great life, in no small part due to my wonderful family. I really do consider myself extremely fortunate to be able to enjoy learning and working.  I suppose there are times when I could have been more diligent or humble enough to admit my ignorance and seek one-on-one support. I have come to realize that conventional education formats were not always the most suitable learning environment for me. I think that’s why I have a lot of empathy for students who don’t get the message the first time around, and it’s also why the emergence of new learning technologies excite me, and make me want to try them in a classroom setting.

Q: What’s in the future for Tom Selling?
I wasn’t kidding when I said that blogging had become an addiction! I’m not getting any younger though, and I would really like to transition from consulting to serving on audit committees of boards of public companies. I recently accepted a part-time position at SMU where I’ll be teaching accounting theory and M&A to both their graduate and undergraduate students. The prospect of going back into the classroom makes me as excited about my future as the day I realized that I had changed my last diaper.

Tom Selling

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Shake, Rattle and Roll: The Latest from iShade

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Sure, there have been quite a few of those “Harlem Shake“ viral videos going around, but before the shake settles down completely, we thought we would give it a spin. So many characters in green…bringing back memories of a St. Patrick’s Day parade that steered off course. Or does it? You be the judge.

Along the way, see and hear what’s in the works at iShade. You’ve probably been reading our comprehensive and dynamic news section on the site and have also been taking part in our free Ask The Expert sessions. If you haven’t done these things, then make it a priority. We won’t make you wear green or dance, we promise.

Click on the iShade logo below to view the short “Harlem Shake” press conference!

i-green circle only

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iShade is THE accounting news source (keep it open on your computer every day).
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A Moment With Rita: The Keller Interview

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Meet one of today’s leaders in the accounting profession, Rita Keller. A nationally known CPA firm management consultant, speaker and author…Rita is a former shareholder and Chief Operating Officer of a successful, regional CPA firm. Savor the Q&A…

Q: You spent a lot of time being a public accounting firm administrator. How has that role changed over the years and where do you see it headed?
I became a CPA firm administrator when the role was in its early stages inside a CPA firm. Law firms had already successfully established the role years before but CPAs were slower to adapt. Most firms had someone inside the firm who took care of the day-to-day – it was usually a high-level administrative person, secretary to the managing partner, although we don’t use the “s” word anymore.

Once ambitious CPAs learned that they could trust someone else to take care of the operational details, freeing them up to serve clients and obtain new ones, the role expanded significantly.

There are still many levels of firm administrators today, depending on the size of the firm and delegation skill of the MP and other partners. Titles include: Office Manager, Office Administrator, Firm Administrator, Director of Administration, Chief Operating Officer and Chief Administrative Officer. A handful of firm administrators have actually, like me, achieved shareholder status at their firms.

With all of the succession issues facing CPAs, I believe the role of the firm administrator is key into helping the departing generation make the transition as well as helping the up-and-comers expand and improve their management skills.

Q: How important is it that a firm administrator knows how CPAs work and what they encounter day-to-day?
This is extremely important. The more the firm administrator knows about the “business” of the firm, the more helpful they can be. They should strive to roll-up their sleeves and learn how the audit team puts together a financial statement and how the tax people prepare and process a tax return. This usually comes very naturally with experience.

It is also very important that the firm administrator role be considered a partner-level role in that they attend all partner meetings and retreats so they fully understand the issues first-hand.

Q: What has surprised you in terms of what public accounting firms have done (or not done)–both positively and negatively?
Over all my years working in public accounting, I have been pleased (surprised) at how CPAs have invested in technology to produce a better and more efficient work product. It has been one change that almost every CPA has embraced.

I also believe that even with the intense focus on due dates and the need to possess a great work ethic, CPA firms are wonderful places to work and create a career path. For the most part, CPAs are truly ladies and gentlemen and wonderful people to work with and for. I have found CPAs to be flexible and understanding with their team members almost to a fault. That brings me to some negative thoughts.

CPAs are often much too nice. They go to great lengths to avoid any form of confrontation and thus high performers and low performers are treated almost identically. In fact, high performers get rewarded by receiving more assignments (more work) and low performers receive less work and can almost coast along for years on end. This has to change!

CPA owners/partners need to focus on leadership development and better communication skills. As owners of the firm they should be more focused on their business and less on doing the work of the business (audits, accounting and taxes). Too many firms are under-managed, which is different from micro-management.

Q: What have been some of the key things you’ve learned throughout your career? What might you do differently if you could go back in time?
The most important thing I have learned is that nothing is ever handed to you. Especially as a woman, you have to be proactive, speak-up and work hard to achieve your goals. I like a mantra used by Sheryl Sandberg in her book, Lean In – “Done is better than perfect.” I believe CPAs could learn so much from that simple statement. When it comes to improving their firms (on the inside), I always say, “CPAs have good intentions but no implementation.” They revisit the same management topics year after year.

If I could go back in time, I would start my own business sooner!  I see so many people inside CPA firms – owners and employees – who stay put when they are not really happy.

Q: What are some of the things that you love most about the accounting profession?
I love the people. I have met thousands of wonderful people over the years and had a chance to speak to and work with so many.

I love the opportunity public accounting has provided me to learn new things, continually improve my knowledge and skills. Life-long learning is a fact of life in the CPA management world.

When I first walked into an accounting firm I thought to myself, “This is probably going to be boring but I will give it a try.” I have not been bored for one minute in over 30 years.

Q: You travel a ton. How about sharing a funny travel story?
Sad to say, I can probably tell you more horror stories than funny stories. That being said, I usually enjoy the Southwest flights the most and use Herb Kelleher stories in my workshops. One flight we had a guy flight attendant who was quite the entertainer. From his seat in the front, as the plane took off and was climbing, he slid bags of peanuts down the aisle (that slid rather quickly because of the incline of the plane) and you could grab them as they went by.

Q: What’s in the future for Rita Keller?
A few years ago I decided on an early retirement from daily life inside a CPA firm to become a fulltime management consultant. So, some day in the not too distant future, I’ll be facing retirement again. I feel like I have a lot to contribute for a while but I will be cutting back on the travel.

I am just getting started with SurveyCPA, a people-survey tool for public accounting firms and I have a couple of other exciting projects in the works.

I have a loyal following for my daily blog and my newsletter is also very successful. I’ve been blogging daily for seven years so I have a lot of content “out there.” Maybe it’s time to write a book.

Rita Keller

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World On A String: Interview With Rebecca Ryan

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Meet one of today’s brilliant minds in the accounting profession, Rebecca Ryan. As the Founder of NEXT Generation Consulting, Inc., in Madison, Wisconsin, Rebecca walks the walk and talks the talk. I particularly love her statement “I’d love to see a list of ‘Best Firms’ that’s based on firms that really make a difference in the world.” You’ll really enjoy this Q&A.

Q: What are some of the key issues facing public accounting firms right now that managing partners need to keep on their front burners?
A: The diversity of the workforce. Currently, half of all CPA grads are women, and 13% of high potentials are nonwhites. That means that ten years from now, half of all our high potentials should be women and one in every six new partners should be nonwhite.

In addition, firms have to start innovating. They’re getting caught in a commodity/price war trap because they don’t know how to differentiate themselves. And the only way you do that in this environment is through service or a client experience.

Q: How challenging is it to run your business? How do you juggle it all?
A: So that’s two questions. Let me break those apart.

#1: Challenge?

It depends how you define “challenging?” The hardest thing I’ve ever done was steer my business through the recession. It was extremely stressful and I felt like a giant loser.

But that was nothing compared to what others face every day. For example, last week one of my clients lost his spouse unexpectedly from a massive heart attack at age 60. THAT is a challenge.

Compared to the really hard stuff we face in life, running a business is easy-cheesy.

#2: Juggling?

I can’t juggle. I’m absolutely horrendous at doing multiple things at once. Anyone who’s ever been in a car with me knows this. I cannot drive responsibly and talk to someone in the car. I run red lights, speed…it’s not good.

Because I can’t juggle, I need other strategies. Here are mine:

From “Master Your Workday Now,” I identify a few things that I want to get done each week. And then each day, I identify no more than six things I am totally committed to getting done that day. I have been blessed with the ability to really focus, so that works for me.

Oh! And recently I signed up for “IDoneThis” based on a tip from Dan Pink. You get an email at 6 each night and reply with all the things you accomplished that day. They track it…and it’s very satisfying to see what I can get done in a month or so.

Q: What’s going on with your writing and speaking engagements these days?
A: Bless you for asking! My new book, ReGeneration, is out in June. And we’re running this cool campaign: people who pre-order before April 30 will get their name in the book. http://tinyurl.com/rrb00k

Speaking is going great. I’m increasingly being used to fill the “futurist” slot at conferences. It’s not very often that meetings have a female futurist and economist…who wears tennis shoes. It’s going well.

Q: What have been some of the key things you’ve learned throughout your career? What might you do differently if you could go back in time?
A. Okay, that’s two questions again. And as you know, I can only do one thing at a time…

#1: Key Things

  • It’s as easy to sell a $5,000 project as a $50,000 project.
  • Nice people really DO get ahead in business. For example, we sold $10,000 of books in 13 days on Kickstarter. That happened because I have spent 15 years trying to be kind to every person I’ve met…and they want to return the favor.
  • You have to have a vision and values beyond the bottom line if you really want your life to count for something. That’s one of the things that always bothers me a little about CPA firms: they measure themselves on revenue and don’t make the connection to people’s hearts and values. I’d love to see a list of “Best Firms” that’s based on firms that really make a difference in the world.

#2: Do differently

  • I would’ve been a better friend to my real friends. Often, I sacrificed friend stuff (like class reunions or weddings) for work. I regret that now.
  • I would’ve fired people earlier, when I knew they weren’t a fit. It would give me fits to fire people, but it was faster and more painless than trying to make someone fit in.

Q: What’s in the future for Rebecca Ryan?
In the very immediate term, an airplane ride home.

In the longer term, we are helping a developer with a “next generation community” in the Dallas area. And I hope, someday, I will give a TED talk.

Oh! And beer. I love to sample beer.

Q: If you had to suddenly choose a completely different line of work, what might that be?

  • Shoeshine girl. There’s nothing more satisfying than shining shoes.
  • College professor. All that tweed and those cigars!

Ryan_R

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Effective Networking: Not Fade Away

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It’s Friday and it’s Networking Pet Peeve Day at my desk.

To network effectively, it can’t all be about you. Here are two real scenarios for our Networking Pet Peeve Day illustration:

1) Someone you know loses his/her job and then seeks your advice and assistance on looking for a new position. You then provide that assistance and connect him/her to other business people and float a couple of open job opportunities to this unemployed person. You continue to keep your eyes and ears open in a genuine effort to help him/her, and then one day you tell this person of a new position that you feel would be a good fit for them and are told, “Oh, I started my new job three weeks ago.”

Result: That person will never get help from me again.

2) Someone you helped find a new position, they worked it for a couple of years, then they contact you asking for your help to find another position—without having had the slightest bit of contact with you the past two years. Make no mistake, I have no problem with them trying to find a better job, but this reaching out “only when you need something” doesn’t fly. I am all for lending a hand to assist someone, but where was this person the last two years? You can’t go that long and then show up out of the blue asking for something. It’s kinda like the bratty teenager who doesn’t lift a finger to do anything to help around the house or pick up his/her room…and then have both hands out at Christmas saying “Give it to me!”

Result: That person will never get help from me again.

Networking Conclusion: A two-way street must exist.

Alas, for those of you heading into the final pre-April 15 work weekend, Godspeed!

Opinion

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The Best Accounting Joke In The History of The World? Well, Maybe Not…

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We’re almost to April 15. In that spirit, enjoy this fine accounting joke! Pass the link around to your co-workers, clients and referral sources.

A local bar was so sure that its bartender was the strongest man around that they offered a standing $1,000 bet. The bartender would squeeze a lemon until all the juice ran into a glass, and then give the lemon to a patron.

Anyone who could squeeze another drop of juice out would win the money. Many people tried, but no one could do it.

One day a scrawny little man came in, wearing thick glasses and a polyester suit. He said in a squeaky voice, “I’d like to try the bet.” After the laughter died down, the bartender grabbed a lemon and squeezed it. Then he handed the wrinkled remains of the rind to the little man who clenched it in his small fist.

Soon the crowd’s laughter turned to total silence as six drops of juice fell into the glass. As the crowd cheered, the bartender paid the $1,000 and asked the little man, “What do you do for a living?”  The little man replied with a winning smile, “I work for The IRS.”

Lemon Drink

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Interview with Sarah Galley, Firm Administrator

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Meet one of today’s experienced public accounting firm administrators, Sarah Galley. A key part of a firm that started in the early 90’s, Sarah lives and breathes firm administration and its various issues every day in Dayton, Ohio. Enjoy the Q&A…

Q: What’s it like being a public accounting firm’s administrator?
Being the firm administrator at Pohlman & Talmage CPAs, Inc. is exciting, fun, challenging, frustrating, difficult and very rewarding. As a firm administrator of a 20-person firm I wear many different hats and have to be able to switch gears in a matter of seconds. I’m a cheerleader, process and procedure enforcer, a therapist, a teacher, an IT person, just the all around “fixer.” Honestly, I wouldn’t have it any other way. I get to come in to work every day and do a job I love and work with intelligent and extraordinary individuals. I would be lying if I said it wasn’t stressful at times, of course it is. I have three partners and 16 employees with very different personalities and expectations. We also have the external stressors like any organization that we can’t always control, such as the IRS or DOL. However, I feel that if our firm leadership creates a positive work environment, we as a team can tackle those external stressors in a more productive and efficient manner.

Q: What’s the most rewarding aspect of what you do on a daily basis?
Helping! That is why I am in this position. I enjoy and want to help the firm, my partners, our employees and our clients. When I go home at night if I can think back through the day and know that I was able to help us get to a more efficient place, solve a personnel or partner problem, or see our staff evolving and just becoming a stronger team, that is my reward!  

Q: If a young professional told you he/she wanted to get into accounting firm administration and management, what would you tell them?
I would tell them it is an excellent career choice if you like to help and lead people. You have to have the ability to talk with the partners and be honest with them even when they may not like it. You have to be able to cultivate relationships and gain trust and be willing to work hard. It isn’t always easy and fun, but if you like helping, if you like being part of something successful…then this is a career choice you should consider.

Q: If you weren’t in the accounting or business administration world, what career path might interest you?
I think I would have taken the route of counseling or teaching. I enjoy helping others and working towards a common goal; I like to figure out what works and what doesn’t work…and be able to be a little creative along the way.

Q: If you had to jump on a time machine and go forward 20 years, what would you tell CPAs? What would you tell firm administrators?
I would tell CPAs that it isn’t all technical. Yes, you must have the technical skills, but you also need the soft skills and be willing to change. As a CPA you are not just required to crunch numbers–you need to learn how to build relationships and talk with your clients and your employees–you have to be able to be evolving constantly. People want to know you care…that you are invested in their future. That is the key to retaining lifelong clients and employees. I would tell administrators almost exactly the same thing. As an administrator you do need to have those technical skills but you must be able to change and cultivate relationships.

Q: What’s in the future for Sarah Galley?
Besides continuing to enjoy my three wonderful children and husband, I plan to continue at Pohlman & Talmage CPAs and help the firm grow, develop and be successful. I would like to go back to school for my Master’s degree in Leadership Development or Organizational Behavior and apply that knowledge to not only Pohlman & Talmage but also to our clients’ organizations. I am fascinated by human beings and their interactions and am truly interested in all the inter-workings of a successful organization.

Sarah Galley 1

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On This Sunny Afternoon, The Tax Man’s Wanting to Tax the Dough

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Is the double-edged sword striking down on that lunchtime chicken salad sandwich? I’ve often wondered when Silicon Valley’s culture of providing meals to employees at all hours–and I’m speaking of Google, Facebook and other companies in this free food mix–would be more of a hot Tax vs. Don’t Tax topic. Well, my friends, that day is officially here.

While this debate has certainly come up in the past, the lunch wagon has it on the front burner again, most likely because the IRS is on a mission to scrape up dimes in the gutter with a putty knife.

Looking at both sides of the controversy, on the pro-tax view of those company-provided lasagnas, smoothies and various cookies, crème puffs and gelatins, I venture to say that the average employee at these companies is enjoying at least a couple of thousand dollars a year in free eats and drinks. That’s clearly compensation and should be taxed.

Now, for the anti-tax view, it can all be taken in the same “de minimis” vein as the free donut and coffee of yesteryear. Why? Today’s work culture has changed. These companies that go to great lengths and costs to establish a high level of perks feel that they must do so in order to remain competitive with recruitment and retention in their respective industries. Few would argue that fact, I think. With that being the case, it doesn’t seem right to tax the free salad bar and barbecue hut, does it? If a Yahoo employee has to declare these edible fringe benefits as compensation, does that really seem fair?

What do you think about this issue? This matter isn’t in the same realm as a public accounting firm bringing in evening meals during busy season…this is a whole other kettle of fish. Drop it like a hot potato, IRS.

Cucumbers

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