Art of Accounting: Secret Five-Year Plan
IMGCAP(1)]Planning is a trait of most accountants including me. Maybe that is one reason we become accountants. I always seemed to write out plans—for myself, partners, staff and sometimes personal activities.
One time I had a plan for a new staff person who became our tax manager and eventually ran our firm’s tax department. He was very bright, aggressive and eager, plus I liked him a lot, right from the beginning. He also was the only person ever who wanted his wife to meet with me before he accepted the position. He wanted a career, not a job. I liked that.
We started him at a generous salary and I made note of what I believed would be his salary progression over the next five years. At the end of the first year his raise was right on target with my plan, and I told him that. He then asked me what that plan was and what he could expect over the next few years. I told him that while I had a generous plan for him, I wanted to keep my options open and also needed to consult with my partners so I was not going to tell him what it was.
As it turned out, the later raises he got were substantially greater than my plan. His value far exceeded our expectations, and while he did not become a partner, he along with our firm administrator made up our five-person management committee.
If I would have told him my planned raises, he would have eventually left. A ceiling on his advancement would have been created, his surpassing our expectations would not have been factored in, and he would feel short-changed and dead-ended.
Make plans. Discuss them with your partners and other involved people. But sometimes, keep them to yourself. Use discretion and never put yourself in a position that creates a ceiling for someone that you want to reach for the stars.
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.