IMGCAP(1)]There are accountants who only do accounting and accountants who also do other things such as selling financial products and doing deals with the client. There is nothing wrong with this, but with some very minor exceptions, I never did the other things.
Accountants have many openings and opportunities to sell life insurance, annuities, mutual funds and tax shelters, broker mortgages, find buyers for a client’s business, manage investments, introduce investors, perform executive searches, and even invest along with clients.
At some point I recognized that public accounting was a business and needed attention, dedication and complete focus. Trying to sell products diffuses your energies and waters down your efforts.
Early on I had a partner who tried to “do deals” with clients and nothing seemed to work out. Not only that, but it caused problems for our other partner and me. A simple analysis showed we would have made more if we just did our accounting work and charged the right fees.
Another time I was doing a tremendous amount of projections for new businesses. Instead of getting paid the normally high fees for the work, we were supposed to get a piece of the action. Well, many of the deals did not close—not because they were bad, but because the client somehow lost interest and went in another direction— sometimes just taking a job he had been looking for while we were doing the work on the business plan. This ended abruptly when we decided to not get pieces of the business but to ask for retainers upfront.
Do you know what happened? The workload dropped 90 percent, but we got paid for the work we did. Some deals did close, and of those, we picked up about half of them as clients. We found ourselves building an accounting business.
In the late 1970s through the mid-1980s we had over 100 clients investing in at least one “tax shelter.” We never took a commission, and when the promoter sent us a check, we credited it to the client. Some years we turned down over $250,000 (in 1982 dollars). But we got paid for every deal we reviewed, every tax return we did, and every tax audit we handled, and we learned an interesting thing. And we were never sued for any of the shelters that backfired or went south.
You can do very well getting paid for what you do. You won’t become wealthy, but you can do very well and sleep soundly since you won’t have to worry about anything rebounding in your face.
I did digress a few times—very few. But on balance, I am glad my partners and I refrained from jumping on the bandwagon, which was really a rickety stepstool.
We did what we did well and better than most and never looked back. We did very well for ourselves.
Edward Mendlowitz, CPA, is partner emeritus at
