Art of Accounting: Perennial best principles

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I share my experiences with these columns but bring them to the current time and in many cases I push some ideas for tomorrow. While the accounting and business world was completely different when I started than it is today, there are more similarities than might be imagined.

The techniques we use are completely different. When I started, I used a slide rule to obtain percentages. Today they are almost automatic with the software we use. When I started, a big thrill was getting a new pad of accounting paper with a brand new, never used sheet of pencil carbon paper. Today neither exists, and pencils are also a relic (except if you do crossword puzzles and make sure you have a good eraser on it).

However, the underlying business principles are still the same. Following are the 10 best principles that have been constant since I started my career, and probably for many years before then:

1. Be courteous: Respect other people’s points of view. Listen to them. Let them have their say. Listening doesn’t mean agreeing with them, but hear them out. I also have a simple rule that says that the more you let others talk to you, the smarter they think you are. Further, follow the golden rule by treating others as you would want to be treated. It might be a cliché, but it is an important way to act with others. 
   
2. Clients pay your salary: The sales mantra is that the client is always right works except when they want you to compromise your values, or when they hire you to help them go in a different direction and then insist on following the old ways they are comfortable with. You are being engaged to express your opinion and to clearly articulate what you mean that will cause positive action, so do that!
   
3. Clients pay your salary redux: They cannot pay your salary if you do not bill promptly or if you do not ask for payment when your invoices creep into the past due area. Clients also need a clear understanding of what you would be doing and not doing and the price. Open-ended prices are not clear, leave doubt, put you in a position of possible combat every time an invoice is received by your client, or have a client hold back calling because they picture that interaction being moderated by a cash register.
   
4. Staff create leverage so you can grow: Staff need to be trained and to understand how they can grow. Given that opportunity, they need to buy into your culture of superior client service, be held accountable for sub-par performance, be noticed and made to feel appreciated for superior performance, and be paid fairly. They also need to be made proud of their growth and of your firm.
   
5. Your practice needs to grow: Growth comes from three sources: new clients, added services to existing clients, and acquiring other practices. Satisfied clients engage your firm for added services and refer new clients. Anything else needs extra marketing efforts, which divert energies that could be better applied to existing clients. If your firm has a model that includes adding practices, that is a different strategy and pushes your practice into a “corporate” mode. Know what you want and then proceed toward it, but I do not think all three can be done simultaneously by too many firms.
   
6. Develop a strategic plan: Figure out where you want to be in five years and compare that to where you likely would be if you do not make any changes. To me, that is the start of your strategic plan.
   
7. Meet all due dates: Due dates are promises. Do not lie. Keep your promises. If you do not believe you can meet a due date, let the client (or whomever you made the promise to) know before then, not afterward.
   
8. Strengthen your brand: You have a brand whether you realize it or not. Articulate it in everything you do, and how you represent your firm and not just how you want to look to outsiders, but how you operate among yourselves.
   
9. You are in a business: Businesses need clear leadership, management, direction, processes and systems, and profitability. Your actions should align with this. This also means partner buy-in and no separate systems or procedures for some partners.
   
10. Availability: Be available to your clients. Respond promptly to their calls, emails and texts, and initiate calls, check-ins and meetings. Great responses to crises are great and heading off crises does not give you extra credit, but a continuous pattern of calm under your watch will elevate you to trusted advisor status. 

Nothing here is new but these are as relevant and important today as they ever were. If you agree with me, try adopting some or all of these as your best principles.
Do not hesitate to contact me at emendlowitz@withum.com with your practice management questions or about engagements you might not be able to perform.

Edward Mendlowitz, CPA, is partner at WithumSmith+Brown, PC, CPAs. He is on the Accounting Today Top 100 Influential People list. He is the author of 24 books, including “How to Review Tax Returns,” co-written with Andrew D. Mendlowitz, and “Managing Your Tax Season, Third Edition.” He also writes a twice-a-week blog addressing issues that clients have at www.partners-network.com along with the Pay-Less-Tax Man blog for Bottom Line. He is an adjunct professor in the MBA program at Fairleigh Dickinson University teaching end user applications of financial statements. Art of Accounting is a continuing series where he shares autobiographical experiences with tips that he hopes can be adopted by his colleagues. He welcomes practice management questions and can be reached at (732) 743-4582 or emendlowitz@withum.com.