Firms are faced with opportunities and challenges as they head into the 2005 busy season.

Most firms have had a good year, but are concerned over their inability to attract people and the challenge that they face in how to handle the workload during busy season.However, in the same sentence they are concerned about growing and marketing their services to a broader base of clients. Without growth, firms stagnate and lack the ability to provide opportunities for staff retention and maintaining income levels for partners. They often become over-partnered, creating other problems. The example in the box ("The No-Growth Model," right) demonstrates why growth is necessary in firms of all sizes.

This type of scenario points out numerous firm management challenges, but the pressure caused by reduced net income per partner is bound to create severe problems. It is far better for firms to focus on strategies that allow them to grow in revenue per full-time equivalent and profitability.

Let's look at some of the important strategies available today.

1. Plan and budget for better utilization of existing and integrated technology. Firms that view technology as overhead are missing the opportunity to leverage technology. Many firms are frustrated with the fact that they continue to invest increasing amounts in technology, but what they don't know is whether, if they had invested 1 percent to 2 percent more with a plan, they could have the necessary training and improved integrationAt the current time, many firms are managing redundant data in multiple databases that won't integrate for reasons ranging from the fact that the databases are proprietary, to the lack of internal IT skills. This applies to both the core production applications as well as the firm management applications. In fact, it may be worse on the firm management side in many firms, due to accountants' love of journal entries. Integration with journal entries is outdated and limits the ability to analyze and extract meaningful data.

2. Plan and budget for increased training and learning. Training and learning should be a two-way street, where those who are training also learn - and those who are learning can train others.

The No-Growth Model
Revenue is stagnant, but overhead grows 5% annually
Year 1
Year 2
Year 3
Labor and overhead
Net before
partner salaries
Number of partners
Average income
per partner
Percentage loss

Firms need to move beyond traditional continuing professional education for CPAs, and think of training for all employees, including administrative staff and partners. Everyone needs their own curriculum for growth.The curriculum should include soft skills and leadership as well as technical skills. In the infancy of a learning program, the focus should be on orientation, core technical skills, position training and industry updates. As the learning program matures, the focus will be more on people development, leadership development, practice development, position training and industry updates.

Two keys to success are buy-in from the managing partner, and hiring a training/learning coordinator who is responsible for implementation of the program. According to the Gartner Group, you get a return of five hours of increased capacity for each hour of training. Don't pass this entire savings on to your clients simply because you are caught in the hours-times-dollars billing mentality.

3. Capture the transaction or information digitally as soon as possible in the reporting cycle. Wean yourself from paper and redundant data entry. Paper is difficult to manage, and digital documents are powerful with search capabilities. Your focus should be on getting the clients to capture the transactions and then have those transactions flow into applications that allow you as the accountant to analyze and produce financial statements and tax returns without re-entering data.

The major vendors have all improved their applications to allow for better integration. The problem in many firms is that the majority of partners and staff have not had adequate training to utilize and take advantage of the capabilities. We continue to hear stories about partners who demand that workpapers be printed in order for them to review. This is a training issue and a resistance to change problem.

4. Improve workflow and eliminate redundant data entry. Many firms have focused on the "paperless transition" over the past few years. In order to get to the next level, they need to focus on workflow and utilize tools that will allow them to eliminate re-entry of data and the time spent in reconciliation.

As part of this process, firms should review the steps in their existing processes and eliminate inefficiencies and redundancy. This often requires people from outside in order to make significant changes. Vendors are building workflow tools into their software and firms should name a task force to improve processes and take advantage of the technology.

It does require the one-firm concept, rather than having as many processes as you have partners. This may be your biggest challenge.

5. Prepare and publish reports electronically to private client Web sites. While most firms talk about paperless, they are still printing and copying volumes of paper to be filed, stored, copied and destroyed. Recently I heard a statistic of four reams of paper per person monthly. There is a more efficient way, and firms that are publishing reports and tax returns to private client Web sites are finding the sites to be a competitive advantage. Clients like the capabilities and view those firms as progressive.

Don't sit back and tell yourself that you don't need to publish to the Internet because your clients aren't asking for it. Your competitors are doing it and you will soon be losing clients to them. I recently attended the Creative Solutions users' conference and was most impressed with the enthusiasm demonstrated by firms of all sizes over Web capabilities (gathering client data, integration with financial reporting and tax preparation, and publishing).

Most important, these capabilities allow firms to offer services globally. With industry expertise, the Internet can be a critical tool, allowing you to expand geographically.


Major barriers to successful planning are fear of change, ignorance, uncertainty about the future and lack of imagination. Don't let your firm get caught in the trap of ignoring issues rather than addressing them.

These five strategies require change, leadership and investment of both time and dollars. The time and dollars can be recouped quickly, and you will have a firm well positioned for the future.

Firms that can attract quality people and provide the opportunities associated with growth will continue to be successful and prosper.

L. Gary Boomer, CPA, is the president of Boomer Consulting, in Manhattan, Kan.

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