Art of Accounting: Some Mistakes I Made
IMGCAP(1)]I’ve been around a long time and did some really great things. I’ve also made some mistakes. The mistakes linger on my mind more than many of the great things, and I am sharing some of the mistakes here.
I was once negotiating on behalf of a client with three other accountants each representing their clients. My client was the dominant of the four and pretty much was going to have things the way I wanted them. One of the accountants was clearly over his head and when he suggested something that was clearly erroneous, I embarrassed him into admitting it. I immediately lowered my stature and effectiveness and eventually was replaced by my client. I still feel bad about embarrassing the accountant. It was uncalled for. I also never did anything like that again.
I once had an accountant working for me who seemed like she was not growing professionally. She was very pleasant and great around the office, and we liked her a lot. However, no matter how hard we tried, she seemed to max out with her technical skills. At that time I only wanted people working for me who could develop and grow to the next step—whatever that was. She was with us quite a few years, and we finally reached a conclusion that we would let her go. Within a few days my partners and I started to get calls from clients we hadn’t really dealt with in a couple of years—except for a year end and occasional other meeting. Now they were calling with all sorts of questions. The person we let go was handling over 30 clients in the nicest bestest way they could be treated and they missed her greatly and so did we. We totally misjudged her value.
We had a salesman working for us who brought in 36 clients his first year. Most were very small and we really wanted larger clients. We had a talk with him and wanted him to refocus toward larger clients. He hit a dry spell refitting and went six months without a lead, and we let him go. He immediately found a job with another accounting firm and was very successful with them for about a dozen years until he retired. We misjudged his ability and did not properly factor in the time for him to refocus properly.
Once upon a time long, long ago I was engaged to prepare projections for a client who wanted to buy a business. It was very involved and included four meetings with my team of clients and two meetings with the seller. When I completed the work the investors did a count and turned out short. I said I could make up the shortfall but would need more points than were assigned to that amount, and they agreed. Eventually the deal fell apart and nothing happened. When I presented my bill, they said I was part of the deal and the projections were my contribution to the decision whether or not to do it. I got stuck and that was the last time I ever said I wanted to be part of a deal before I was paid in full.
A client owed me money for a long period for work I did that helped him immensely and for which he profusely thanked me. Well, the past due balance was getting older and older and I met with him to get paid. He started badmouthing the work I did and said I was grossly overpaid (after a year and half of receiving monthly statements). I lost my temper and told him off while calling him some ungrateful names. At that moment, I realized I wasn’t going to get paid anything. As long as he owed me money, I should have been more humble and I likely would have received a good portion of the bill. In this case I got nothing.
There are others, but luckily I can’t recall them so they couldn’t have been that great. There are also the normal errors we make doing business, but these just happen and we push them aside and go forward. The ones mentioned here created important lessons which benefited me going forward. Thankfully I really have not had that many really bad mistakes or misjudgments.
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, firstname.lastname@example.org.