Art of Accounting: Writing a Christmas letter redux

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Last year, I wrote a column suggesting writing a Christmas letter for your practice. Upon reflection, I think this is even more important this year.

This letter would be similar to the many letters we all get from family and friends recounting the past year. I think there would be great benefit to doing this for your practice.

We are closing the chapter on a terrible year, primarily because of the pandemic but also because of many social and political issues. Consider reflecting on how you dealt with it, how you propose to handle it in 2021, and perhaps where you see your practice (and perhaps many of your clients) in five years. This can be reassuring to staff and clients, inject transparency, and express and share hope and optimism. I suggest these letters for all size firms, including sole-proprietor practices.

In case you haven’t figured it out, I like to write. I wasn’t always a published writer, but I was always a writer. I also liked to do “T accounts” with pros and cons. I always did this, even before I learned what T accounts were. I wrote out the issues, stated my case, played out all the probable moves as a chess player would do, put it aside to brew a while, then relooked at it and finalized it. I then usually made a decision and never looked back at it. I kept some of these notes and would show them to you, including one I did when I was 12, but I won’t because then you would not just think I am crazy but would have proof of it. Anyway, writing it out is a cathartic exercise that has served me well, and I highly recommend it.

You can also include some disappointments, as long as you’ve learned and grown from them. If you are not in business, you can still do it, but you would not have anyone to share it with except your spouse or partner. On some level, every public company does something similar in the form of a CEO’s letter in their company’s annual report. Actually, you can use some of these as a guide. A great one is Warren Buffett’s letter in Berkshire Hathaway’s annual report. His letters have become legend, myth and lore in the investment community.

Humor me if you never wrote such a letter before. Spend two hours, then stop and assess what you did. If you think it’s not beneficial, then drop it. Chalk it up to a bad idea from me. However, if you feel it is helpful, look it over and decide if there are some action items for you and also whether you want to continue with it, send it to your clients or staff. In any event, consider this time as working on your business rather than working in your business.

Additional information and a template can be found in last year’s column.

Write your Christmas letter.

Thank you for reading my columns. Have a happy holiday season and New Year.

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.” Ed 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. Ed 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 Ed shares autobiographical experiences with tips that he hopes can be adopted by his colleagues. Ed welcomes practice management questions and can be reached at (732) 743-4582 or emendlowitz@withum.com.