Art of Accounting: Moving staff up or out

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Let’s assume you have a staff person working on the same tax return for 10 years. How can that person grow? If staff do not grow, then the owners cannot grow. Now, if the owner or partners do not want to grow, that is their prerogative, and it is not my place to criticize them. However, if they want to grow, then they cannot have their staff stuck on repetitive work that can likely be passed down to lower-level staff. After all, that staff person was at the lower level when they started working on that client’s return.

Earlier this month, I wrote a column suggesting a three-year cycle for staff on a client and received quite a few emails with questions. This column follows up with additional information.

The three-year cycle referred to business clients (at least that was what I was thinking of when I wrote the column). I was asked what I suggest for a practice that primarily does tax returns and no audits, reviews or compilations. I would follow the same pattern. Let me explain.

I have always wanted to build an accounting business and recognized that I needed staff to do the work. I made more money when lower-cost staff did the work than higher-paid staff. I also needed growth or none of this would have worked out. So, what I did was move staff up, and while doing this, lower-level people were trained and got the work done. The longer-term staff moved up, taking over some of the owner’s or partner’s (i.e., my) work. As I was freed up from much of the work, I used the extra time to get additional business and grow the practice. That’s what I did, and it worked.

Other questions were about what to do with “Lone Rangers,” who are staff who “refuse” to train others and who are comfortable working by themselves. Well, they were dead ended. From my standpoint, if it was one or two staff members out of five or six (or more), then it became easier for me to not upset the situation and I usually left it alone. However, leaving it alone put me in the position of abandoning my plan and sowing seeds of future discontent. These people would not be growing in value, which would mean lower raises than they would expect, and then having them continue to work while being unhappy until they pushed the button and gave notice. They controlled the situation. That happened and it took me a while to realize it. Once I did, I either took control by telling the underperforming staff they needed to bring up the lower level staff or they no longer would be permitted to work for me. Of course, it also meant that I needed to train them to train. But I had a big-picture plan and steered my ship toward it. It didn’t happen without some rough winds, but it did happen.

Another group of questions came from partners who felt they were unable to hire the right staff and were afraid to let go of who they had, even though they were not performing well. This is an entirely different topic and I wrote about this with my "30:30 Training Method" e-book published by CPA Trendlines. You can get a free copy by emailing me at GoodiesFromEd@withum.com

The comments I received indicated to me that staffing is a perplexing issue for many firms and not really any different than I experienced in the 1970s when I started my practice.

Do not hesitate to contact me at emendlowitz@withum.com with your practice management issues or questions.

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) 743-4582 or emendlowitz@withum.com.

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Practice management Tax practice Practice structure Career advancement Ed Mendlowitz