One Miami CPA’s challenge managing a CPA firm has never been more difficult
Miami CPA’s Firms of all sizes are grappling with volatile economic conditions
Miami CPA’s expectations by clients and staff, and rapid evolutions in technology. Is there some magic solution that will bring all this into harmony and allow the firm to cruise calmly forward into the future? Hardly! But, Miami CPA’s positioning themselves for success will usually look for a careful alignment of people, processes, and technology.
The first essential for this alignment is a shared vision of the future, articulated clearly in a written strategic plan. One thing that a strategic plan will reveal is that to be successful, a Miami CPA’s needs a commitment to growth. A commitment to growth doesn’t necessarily mean more people, but it does demand that the staff on hand be as efficient as possible. Part of this focus on efficiency will likely mean developing staff members and empowering them to work effectively from wherever they might be. Most Miami CPA’s have some experience with staff working non-traditional hours, or working from home, or simply keeping up with their workload while traveling. This requires the technology to make flexible work opportunities possible.
Good Miami CPA’s view technology as a strategic multiplier, not an overhead expense. But all the technology in the world won’t make much difference if the Miami CPA’s don’t commit to refining processes and procedures to take advantage of the opportunities technology presents. Technology and process go hand-in-hand: new technologies make new processes possible while new processes are necessary to get the most out of the technologies purchased.
Fortunately, the tools required to achieve this alignment of people, process, and technology are available across a wide spectrum of firm sizes. Miami CPA’s as small as 20 or so staff and a few partners have one set of needs and opportunities; multi-office firms of several hundred staff and a diverse partner group have yet another. In both cases, however, partners must be free to focus on client service while using automated processes for maximum efficiency. We will look at how well-integrated practice management software will allow both large and small firms to meet their own special needs.
One way to improve results is to carefully review traditional ways of doing essential functions. These functions include the sales and marketing tools used in client development, the ability to forecast staff availability and assign the right staff to a job, the ability to build accurate job budgets to ensure profitability, and the full integration of Work in Process (WIP) and Accounts Receivable (AR) into the firm’s own General Ledger (GL) accounting system.
Most Miami CPA’s have a variety of back-office systems in which they track multiple interactions with prospects and clients. Far too often, these related functions are tracked in entirely separate systems, limiting the firm’s ability to share critical information at the right time. These firms miss the competitive benefit of a full relationship view of all interactions with prospects as it nurtures them toward becoming clients and they miss the benefit of leveraging firm contacts and experiences with existing clients in new pursuits. Once a “prospect” becomes a “client”, then the traditional time, expense, and billing processes come into play. Combining those into a cohesive firm-wide relationship data base yields significant dividends but it doesn’t just happen, it requires a marketing plan and executive vision.
Once a client engagement is secured, the key to maximizing the profitability of the engagement may have already been lost. Most sales processes emphasize winning the pursuit first and then consider profitability after the fact. The assignment of the proper staff to the job and the development of an accurate budget for the labor costs to be incurred are deferred until the time the project is initiated. Firms use a variety of tools to do this, ranging from specialty software applications to the ubiquitous spreadsheet. This process typically involves separate data sources limiting their ability to share common information across applications.
One of the most frustrating examples of the lack of integration comes from the Miami CPA’s own internal accounting process. Many firms use a traditional “time and billing” application to track time and expenses, accrue WIP, and track AR after invoices are issued. Far too often, however, these asset balances are not integrated with the general ledger accounting system and require one or more journal entries to produce the firm’s own financial statements. The real breakdown in this system is the inability to “drill down” into the financials and analyze source information without resorting to multiple applications, each with its own database. Perhaps even more damaging is that most systems do not integrate a preview of the engagement’s likely profitability into the pursuit. As a result realization and profitability not known until the final invoice has been paid.
A step toward simplifying these back office processes is to move from a mixed array of software technology to a fully integrated Practice Management system which brings all these features together with a common shared database.
The Sales & Marketing function of the system manages contacts, clients and opportunities in a single location, charting the prospect to client process. Ultimately, firm leaders can see an estimated project realization before the opportunity is won. As in standard CRM, interactions are documented by emails, tasks, appointments and notes, and that information is also saved into Outlook. Miami CPA’s can look up the zip code where a client is located, the business type, the address, and have the ability to verify data as it is entered.
Once a project work plan is created by a team leader, it can be confirmed as the project’s budget and used to benchmark the actual time for completion with a preview of the project’s realization before work had begun. When a particular professional service is chosen as an opportunity within TCPM, a unique template of standard work steps or “tasks” for staff is presented. Those tasks come with an estimated time of completion and a fee based on the staff levels needed to complete the project. Once a prospect becomes a client, managers will be able to view the actual time vs. planned time on a day-to-day basis. Ultimately this function allows forecasting and a better understanding of time management for each staff person. Team leaders can now see which staff person is working on what, if time revisions need to be made, the rates per hour and how work is distributed between staff members.
Rising to Meet the Management Challenge
At the outset of this article, we recognized that large and small firms alike are facing unprecedented challenges to profitable operation. The key to profit in today’s environment is efficiency, and efficiency comes in large part from simplified and integrated back office operations. Achieving these back office efficiencies becomes much easier when the tools are based upon industry standard applications. TC Practice Management, built upon Microsoft Dynamics CRM and Microsoft SharePoint, provides robust back-office integration, flexible installation configurations, simplified licensing, all built on industry standard platforms.
Has your firm committed to the alignment of people, processes and technology? Are you positioned the way you want to be to meet the management challenges of the future? If so, congratulations! If not, it’s time to get started!