Art of Accounting: Juggling an accounting practice by the month

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Running an accounting business is overwhelming and because of that, little of the “should do” things ever get done. There are at least 2,000 things you “should” do, about 70 that you can do, only about 40 that you would want to do, and maybe 12 that you will do (that is one new thing a month).

I am not referring to the myriad daily client things we must do, but to the things that help us accomplish our long-term goals for our practice, provide the financial security we need, and recreate and regenerate the fun we had when we started our practices. Not doing what needs to be done leaves the firm, and its owners, stuck in a rut. I know because I’ve been there. But I’ve solved this problem and you can do it with an easy to swallow pill that can turn you into a Captain Marvel of the accounting profession. Here is what each pill will do for you.

January: Raise all your fees 5 percent across the board. If you’ve already programmed in raises, then good for you and just increase the fees for the clients you haven’t considered for the increases. And don’t forget the individual tax returns you will be doing — maybe push these increases to 8 percent.

February: Tell your staff that errors on returns will no longer be de rigueur. They must check and double-check their work before handing it in for review. Also, if you haven’t done it already, book your post tax season vacation now and tell your staff to do that also. Knowing about that relief will ease your tax season pressure somewhat. 

March: Close the Saturday after March 15. This way your staff can catch their breath, catch up on family duties and have a “whole” weekend to chill out. The reinvigoration will pay dividends and the rush rush attitude of tax season will be relaxed, resulting in a calmer atmosphere, better quality work and increased production from a group that could already be worn out while still facing a month of grueling work.

April: Three things: 1. Close the day after tax season ends (not the Friday afterwards); and 2. schedule a lunch, two hours maximum, in the office on April 22 for a tax season retrospective. Review things while they are fresh in everyone’s minds. I can send you a complete kit for this. Email me at GoodiesFromEd@withum.com. 3. File your own return on time with no extension!

May: Take your well-earned vacation. Start scheduling monthly off-site partners’ meetings, or if you are a solo, then with yourself and key staff if any.

June: June is always a good month to get married, but it is also a good month to review your clients’ tax returns and any notes you made about additional services they might need. Not just tax, but any sort of financial or investment planning, long-term goals or business strategies. Try my 1/20th rule, which is to provide additional services to 5 percent of your individual tax clients each year. If you want my method of how to do it, include it in your email to me. Continue with your monthly partners’ meetings. Try taking off every Friday from now until at least Labor Day.

July: Visit or meet with every business client that you haven’t been with since April, or earlier than that. They pay your salary and contribute to your future financial security and growth of your practice and infrastructure. Meet with them, show your availability, and you might even come up with some ideas to help them in their business.

August: Continue the client meetings and the 1/20th calls. Get started with the returns with extensions so September and the first half of October won’t be so burdensome.

September: It’s a busy work month, but do not stop your monthly partner or owner meetings. Even though it is a mini tax season for many firms, they are not fully prepared because overtime is not usual nor is hiring extra help, as is done during the first tax season. If you did not plan last month, then resolve that you will plan ahead next summer.

October: Toward the end of the month, your CPE starts up again, as should calls to tax clients to find out what changes took place with them during the year that might have tax consequences. Anything that happened that can be worked on before the year ends will have that work shifted from the busiest part of tax season to a less hectic November or December.  Be smart — make the shift in the work happen. Some suggestions are sales of vacation homes and other real estate, the sale or acquisition of a business  interest, inheritances of depreciable property that could have its basis stepped up, and other time-consuming transactions that you could know about now. Make that call!

November: See last month and make the calls you didn’t last month. It’s also a good time for a second vacation. And you need to get started planning for your next tax season. Now is a good time to review your year and see how you did, and whether your goals were met or were on target. It’s also a good time to review your clients and determine if work was done that was not billed, was out of scope or was done inefficiently or should not have been done at all. Bill whatever you can and then some. Meet with clients to explain the necessity of the bill and establish the fee or fee basis for next year if it’s significantly different from this year or because of changes due to the scope creep and the new tax law and insufferable accounting changes.

December: Be a realistic business person. Did your firm do the best it could this year? Are your staff growing the best they can? Are you keeping up with your clients? Are they keeping up with your growth and increased and improved and expanded capabilities. If the latter hasn’t happened, then determine why not and make it happen next year.

FYI, my partners and I did everything in here, making one change a month and carrying the changes forward. We continued the pattern of one change a month, making our practice very profitable and much more fun with even greater client service and very low staff turnover.

Have a happy, healthy and peaceful new year.

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, and “Managing Your Tax Season, Third Edition.” Ed also writes a twice-a-week blog addressing issues that clients have at www.partners-network.com along with the Pay-Less-Tax Man blog for Bottom Line. Ed is an adjunct professor in the MBA program at Fairleigh Dickinson University teaching end user applications of financial statements. 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 emendlowitz@withum.com.

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