also: manage your non-charge hours.
by jeff pawlow, the growth partnership
the rosenberg survey: national study of cpa firm statistics
all of this m&a is coming at a price. yes, top lines are growing, but often the challenge of successfully assimilating a disparate culture causes challenges to the bottom line.
more from the map survey: 2019 trends: client service changes | 2019: shifts in hiring & office space | 2019: firms grapple with change | staff policies improve, but not mentoring
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this is a relationship business – and it is almost impossible for a practitioner to function at an advisory level absent true professional intimacy with their clients. sadly, most firms don’t have programs in place to drive these dynamic relationships and are still stuck managing the compliance services at the expense of the advisory work.
every year, we ask the industry’s top consultants to share their observations of what they are seeing at cpa firms. we provide their comments in this section as they were provided with virtually no editing.
specifically, we ask the following questions:
- what kind of year was 2017? what were the major trends you observed? what were the issues you saw firms struggling with the most?
- 2018 is half over. based on your experiences this year, what are you seeing? what are the major trends? what are firms struggling with and what are they working on as the year progresses?
practitioners continue to work in their business at the expense of working on their business.
more and more firms are adopting a formal digital strategy to help take advantage of emerging technologies that impact the way the core services are delivered.
the association/alliance landscape is rapidly evolving. new models and approaches (like the bdo alliance) are causing some of the legacy associations to evolve or rethink the traditional model. look for more options along the lines of what bdo has built as other providers seek to keep pace.
business development programs that are focused on helping firms make the transition from compliance to advisory are exploding. firms are placing more emphasis on the leading measures of success (i.e., activities that are predictive of growth) as opposed to the ultimate lagging measure (actual growth) as they tighten the level of accountability within the structure of these programs.
firms that have a formal system to proactively manage their non-charge hours – in alignment with annual goals – are outperforming firms that simply manage their charge hours.
firms that invest in formally developing their future leaders outperform those that don’t. this year’s survey highlights this metric and it is a material difference in terms of average net income per partner.