By Ron Kranzler CPA.CITP
Managing Partner of HKMP, LLP in New York, NY
Member Firm of Boomer Technology Circle #2 since 2003
The dust is starting to settle following the tumultuous shift the economy has made over the last year. By now, most firms have made the critical adjustments needed in order to endure the downturn. They have trimmed staff, reined in spending, and renegotiated contracts, leases and agreements to cut costs wherever possible.
But while the drastic and immediate measures taken as CPA firms engaged in survival mode signified the gloom and doom brought about by an economic downturn, new opportunities have emerged that serve as the proverbial silver lining for the dark cloud that does not appear to be retreating any time soon.
CPA firms now have leaner headcounts comprised of their top talent. With lighter workloads to manage and staff resources more available than ever, now is the time to leverage the knowledge, talent and availability of the firm's best and brightest by revisiting firm policies and procedures. In an article from his company’s website, called Strategic Decisions for Cost Savings in an Economic Downturn, Jim Cashin, Vice President at Caturano and Company, said “Today, more than ever, companies need to review their operational and organizational strategy. In doing so, companies can identify where they can optimize their processes resulting in cost savings but also positioning for growth.”
One way to optimize processes happens on several levels. Larry Perry and Patricia Williams of CPA Firm Support Services, LLP, listed in their article titled Practice Alert: It Is Time to be Proactive a list of considerations a CPA firm should make in order to maintain profitability during difficult times. Here is a condensed version of their recommendations:
- Review Firm Policies—Whether formal or informal, policies regarding staff utilization, billing, managing receivables collections, realistic engagement budgets, engagement efficiency and minimum engagement fees should be considered.
- Make Engagement Efficiency a Priority—For every functional area of practice, firms must be willing to change traditional approaches to engagements to get work done in less time, even if we must make investments of time and money to achieve results.
- Invest in Technology—As the costs of computer hardware and software decrease, many CPA firms are investing in equipment and electronic practice aids that save engagement time.
- Plan, Plan, Plan—For audit and review engagements particularly, CPA firm staff personnel and management should be planning each engagement to maximize efficiency. The extent of client assistance, assigning the right personnel to engagements, engagement approaches and the nature and type of documentation are a few of the opportunities for reducing costs.
Positioning the firm for growth should be at the forefront of every manager’s mind. HKMP Technologies, LLC has spent years consulting with CPA firms of all sizes to help clients prepare for growth by maximizing integration and automation opportunities within their clients’ technology investments. Over the course of our experience, we observed that most CPA firms were struggling with the management of their engagement forms and checklists (also known as “audit methodology”) because this area has failed to evolve from a technological standpoint.
Because we knew that every firm would benefit from having a better way of managing, updating, completing and archiving their audit methodology, we developed a software product that accomplishes these things. As a result, firms stand to experience tremendous efficiency gains, possess greater control over how their audit methodology is managed, and much more.
Now is the time to position your firm for growth, and reforming the processes surrounding your audit methodology is a great place to begin. Join us for an insightful and FREE webinar on Thursday, September 10th at 2pm to learn more about how to get started and to meet our new product, amelio™!
Click here to reserve your seat for this webinar!