[IMGCAP(1)]One time I had a client who became his company’s CEO. This was a public company and I knew him as well as I could know someone whose tax returns I prepared and met with two or three times a year and spoke to over the phone another two or three times a year. At one meeting I asked him how he spent his days and how he managed the transition to CEO.
He had a PhD in chemistry. His career took him from technical product development and manufacturing to marketing for his NYSE-listed chemical products company. He described a typical day (I could write a book about that). The real shock for him was the amount of time and attention he needed to spend on financial data. He estimated it was about a third of his time. He said he knew virtually nothing except his own narrow budgets.
For the first few months after becoming CEO he spent about an hour and a half every evening with his CFO learning about the financial reports he needed to understand and how to master them. These meetings seemed like a mini MBA program and only eased when he started to feel confident enough to ask questions and not feel embarrassed.
I know the importance of financial data and the power of informed uses, but to hear this from a nonfinancial person was very enlightening and gratifying. I also learned the benefits of understanding what clients do in their jobs, and now I almost always ask them.
Edward Mendlowitz, CPA, is partner at WithumSmith+Brown, PC, CPAs. He is on the Accounting Today Top 100 Influential People List. He is the author of 24 books, including “How to Review Tax Returns,” co-written with Andrew D. Mendlowitz, published by www.CPATrendlines.com and “Managing Your Tax Season, Third Edition,” published by the AICPA. Ed also writes a twice-a-week blog addressing issues that clients have at www.partners-network.com. Art of Accounting is a continuing series where Ed shares autobiographical experiences with tips that he hopes can be adopted by his colleagues. Ed welcomes practice management questions and can be reached at (732) 964-9329 or email@example.com.