The basics of running a CPA firm are indisputable: clients need to be served, billings and collections completed. For most accounting professionals, these activities are top of mind and top of the priority list, like a football team running plays in a game.
But what sets outstanding firms — ones that achieve their goals for profitability and culture — apart from those that are just getting by? What are the actions, behaviors and outcomes that make for a winning year?
A diversity of plays and partner actions are valuable to the CPA firm, even if you're not making it to the end zone. It takes a team to be successful, not just a quarterback and a wide receiver. And just like your favorite NFL or college team, your firm has opponents, and you need to manage all aspects of a successful firm to stay competitive.
Defining the plays
Having clarity within the partner group around the expected actions, behaviors and outcomes is an important facet of firm management. I've grouped some point-worthy actions and penalty-worthy detriments you can use to assess your firm's fitness for winning over the next year and beyond.
(Note: Whether any item listed here is a touchdown or only an extra point for your firm will depend on your current roster and record and where the focus is needed to achieve success. Rearrange your list to your heart's content.)
Touchdowns! (6 points)
- Prioritizing strategic planning, goal setting and accountability as a partner group.
- Winning a significant new client for the firm.
- Successfully implementing or expanding offshoring.
- Proactively and appropriately using AI.
- Individually exceeding stated billing and profitability targets.
- Developing staff promoted to the next level of responsibility.
- Successfully integrating an acquisition.
Field goals (3 points)
- Culling bad-fit clients.
- Moving toward value pricing.
- Exploring whether PE is the right fit for your firm.
Extra point (1 point)
- Implementing upward feedback.
- Terminating (finally!) that problem employee the partners can't stop ruminating about.
- Delegating administrative tasks to administrative professionals.
Penalties
- False start (5-yard penalty): Not entering time in accordance with firm policy.
- Delay of game (5-yard penalty): Taking sales calls solo.
- Holding (10-yard penalty): Excessive WIP balance > 90 days
- Pass interference (automatic first down): Not reviewing work prepared by others in a timely manner.
- Helmet-to-helmet collision (15-yard penalty): Not supporting firm decisions in front of staff. (Note: A football player not acting in accordance with their own team's goal of winning/following the play is pretty uncommon.)
- Unsportsmanlike conduct (15-yard penalty): Inappropriate language or behavior toward any team member.
- Ejection from the game: Failing to meet baseline professional and ethical standards.
Player compensation
Now that you've identified the actions, outcomes and behaviors you'd like your partners to be doing, achieving and displaying, let's think about how to reward them. Talented CPA firm leaders can out-earn some NFL players without even needing to bench 300 pounds!
NFL compensation can offer some interesting perspectives for CPA firms to consider.
Workout bonuses (e.g., attending offseason workouts)
Speaking of benching 300 pounds, should your partners be incentivized to do something in the offseason? In the weight room of CPA firms live the following opportunities: training and development of team members, networking and business development, execution on strategic initiatives. It's what partners do with their nonchargeable time that often sets the firm up for more success than logging the next billable hour.
Incentive bonus (e.g., passing yardage)
Your compensation system could include a financial reward for exceeding baseline partner expectations on billings, collections and realization. A balancing factor is often needed to ensure the firm's overall success is prioritized over individual pocket-lining. Avoiding the negative culture of "mine/yours" is very achievable through culture, tone at the top and adjustments by those allocating income when needed for actions like hoarding clients.
Performance bonus (e.g., making the playoffs)
If your firm as a whole performs well, CPA owners are in an obvious position to achieve a performance bonus — after all, in the traditional firm model, this is an owner-operator team. Looking more broadly, have you communicated to employees how they can contribute to the firm's success overall and offered a reward if goals are exceeded? If the ticket sales are sky high for the Super Bowl, it makes sense to share some of that with the extended team.
In the end (zone)
Playing to your team's strengths and being clear on what they need to be doing will set you on the path to greater success. Label what a touchdown is for your firm this year. Define the penalties when needed in your rulebook, and, most importantly, hold your team accountable for their contributions to the season's objectives.
