[IMGCAP(1)]One time I got a client who was on the verge of going out of business and he asked if there was anything we could do to stop it from happening.
After my usual tour of looking around, I sent in a staff person to get some numbers for me. I didn’t want the numbers in the financial statements, but the numbers that would show me how the business was really doing, what the trends were, how much business he did with his top five or 10 clients and vendors, the largest-selling items, his pricing methods, who his higher-paid employees were and maybe whether there was hidden value in the business. My staff guy was told what to do, that he had three days, and this was a very high priority.
I called him at the end of the first day to check on his progress, and he told me it was too early to give any conclusions but would have something for me the next day.
I called around 2:00 the next day and was told that he spent a good day with the client working on a break-even analysis and methods to better price his products.
At that point, I got a little upset. In those days I did not hide my anger too much. I told him I would be coming over there, at which time I then fired him after hearing his explanation about why he did not follow my instructions. He explained that the client had no understanding of his costs and he priced willy-nilly.
I explained that I was trying to save a dying business, and the pricing, while important, at that point would make no difference in the business surviving or not; at a later point it would. I also explained that he did not follow my instructions, and after his almost two days of work, I still did not have any information I could use to analyze and apply my skills.
This staff person was a very smart, if not brilliant person —from a book-learning or pedagogical standpoint—but seemed to lack a practical understanding of our role and how to apply his (and our collective) knowledge to the situation at hand. He also did not follow my instructions—a cardinal sin! I had to start all over and did most of the work myself with assistance from a lower-level accountant on my staff.
Takeaway: Besides explaining what to do and making sure your staff person knows how to do it, you need to make sure they understand that is their job, and that if they want to digress, they need to call to get agreement on the diversion.
It also never hurts to over-supervise when a job gets started and to have definite benchmarks in the form of a deliverable at reasonable intervals over which the work will be done. This is a recurring theme and is part of overall project management.
A secondary takeaway is that once you are sure you have a staff person who does not listen, you have to let them go—and the sooner the better.
Edward Mendlowitz, CPA, is a partner in WithumSmith+Brown, PC, CPAs. He has authored 20 books and has written hundreds of articles for business and professional journals and newsletters plus a Tax Loophole article for every issue of TaxHotline for 27 years. Ed also writes a blog twice a week that addresses issues his clients have at www.partners-network.com. He is the winner of the Lawler Award for the best article published during 2001 in the Journal of Accountancy. He has also taught in the MBA graduate program at Fairleigh Dickinson University, and is admitted to practice before the U.S. Tax Court. Ed welcomes practice management questions and he can be reached at WithumSmith+Brown, One Spring Street, New Brunswick, NJ 08901, (732) 964-9329, email@example.com.