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The Boomer Bulletin - 2011
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Practice Management in the Progressive CPA Firm

Posted By Ken McCall & Chris Gryskiewicz, Tuesday, October 18, 2011
The Management Challenge

The challenge of managing a CPA firm has never been more difficult than it is today.  Firms of all sizes are grappling with volatile economic conditions, changing expectations by clients and staff, and rapid evolutions in technology.  Is there some magic solution that will bring all this into harmony and allow the firm to cruise calmly forward into the future?  Hardly!  But, firms positioning themselves for success will usually look for a careful alignment of people, processes, and technology.

The first essential for this alignment is a shared vision of the future, articulated clearly in a written strategic plan.  One thing that a strategic plan will reveal is that to be successful, a firm needs a commitment to growth.  A commitment to growth doesn’t necessarily mean more people, but it does demand that the staff on hand be as efficient as possible.  Part of this focus on efficiency will likely mean developing staff members and empowering them to work effectively from wherever they might be.  Most firms have some experience with staff working non-traditional hours, or working from home, or simply keeping up with their workload while traveling.  This requires the technology to make flexible work opportunities possible.  

Good firms view technology as a strategic multiplier, not an overhead expense.  But all the technology in the world won’t make much difference if the firm doesn’t commit to refining processes and procedures to take advantage of the opportunities technology presents.  Technology and process go hand-in-hand:  new technologies make new processes possible while new processes are necessary to get the most out of the technologies purchased.

Fortunately, the tools required to achieve this alignment of people, process, and technology are available across a wide spectrum of firm sizes.  Firms as small as 20 or so staff and a few partners have one set of needs and opportunities; multi-office firms of several hundred staff and a diverse partner group have yet another.    In both cases, however, partners must be free to focus on client service while using automated processes for maximum efficiency.  We will look at how well-integrated practice management software will allow both large and small firms to meet their own special needs.

Streamlining Functions

One way to improve results is to carefully review traditional ways of doing essential functions.  These functions include the sales and marketing tools used in client development, the ability to forecast staff availability and assign the right staff to a job, the ability to build accurate job budgets to ensure profitability, and the full integration of Work in Process (WIP) and Accounts Receivable (AR) into the firm’s own General Ledger (GL) accounting system.

Most firms have a variety of back-office systems in which they track multiple interactions with prospects and clients.  Far too often, these related functions are tracked in entirely separate systems, limiting the firm’s ability to share critical information at the right time.  These firms miss the competitive benefit of a full relationship view of all interactions with prospects as it nurtures them toward becoming clients and they miss the benefit of leveraging firm contacts and experiences with existing clients in new pursuits.  Once a "prospect” becomes a "client”, then the traditional time, expense, and billing processes come into play.  Combining those into a cohesive firm-wide relationship data base yields significant dividends but it doesn’t just happen, it requires a marketing plan and executive vision.  

Once a client engagement is secured, the key to maximizing the profitability of the engagement may have already been lost.  Most sales processes emphasize winning the pursuit first and then consider profitability after the fact.  The assignment of the proper staff to the job and the development of an accurate budget for the labor costs to be incurred are deferred until the time the project is initiated.  Firms use a variety of tools to do this, ranging from specialty software applications to the ubiquitous spreadsheet.  This process typically involves separate data sources limiting their ability to share common information across applications.

One of the most frustrating examples of the lack of integration comes from the firm’s own internal accounting process.  Many firms use a traditional "time and billing” application to track time and expenses, accrue WIP, and track AR after invoices are issued.   Far too often, however, these asset balances are not integrated with the general ledger accounting system and require one or more journal entries to produce the firm’s own financial statements.  The real breakdown in this system is the inability to "drill down” into the financials and analyze source information without resorting to multiple applications, each with its own database.  Perhaps even more damaging is that most systems do not integrate a preview of the engagement’s likely profitability into the pursuit.  As a result realization and profitability not known until the final invoice has been paid.

A step toward simplifying these back office processes is to move from a mixed array of software technology to a fully integrated Practice Management system which brings all these features together with a common shared database.

Templeton Solutions, LLP, a technology consulting company, and a division of Templeton & Company, LLP an accounting and management advisory firm with offices in West Palm Beach and Ft. Lauderdale, Florida has done this with their system TC Practice Management (TCPM). Providing time and billing, sales and marketing, project management, document management and analytics, all built on top of Microsoft Dynamics CRM 2011. TCPM offers an intuitive interface delivered directly from Microsoft Outlook. With a single log-in and folders visible on the left side of your screen linking you to the applications, the program is fully integrated and designed to provide a cycle in which to manage your business – from sales and marketing, to prospecting and planning, to winning and creating the project, to forecasting, to time and expense input on a periodic basis to generating invoices for clients. 

The Sales & Marketing function of the system manages contacts, clients and opportunities in a single location, charting the prospect to client process. Ultimately, firm leaders can see an estimated project realization before the opportunity is won. As in standard CRM, interactions are documented by emails, tasks, appointments and notes, and that information is also saved into Outlook. CPAs can look up the zip code where a client is located, the business type, the address, and have the ability to verify data as it is entered.

Once a project work plan is created by a team leader, it can be confirmed as the project’s budget and used to benchmark the actual time for completion with a preview of the project’s realization before work had begun.  When a particular professional service is chosen as an opportunity within TCPM, a unique template of standard work steps or "tasks” for staff is presented. Those tasks come with an estimated time of completion and a fee based on the staff levels needed to complete the project. Once a prospect becomes a client, managers will be able to view the actual time vs. planned time on a day-to-day basis. Ultimately this function allows forecasting and a better understanding of time management for each staff person. Team leaders can now see which staff person is working on what, if time revisions need to be made, the rates per hour and how work is distributed between staff members.

Executive Decision Support

For the firm to run efficiently, decision makers need timely and accurate information.  This means having the right information (not cluttered up with unnecessary distractions!) presented naturally, in a clear and concise form.  For many firms, this will mean rounds of customized reporting to get the information the partners need and oftentimes supplemented with individual spreadsheets where the reporting falls short or is suspect.

The high payoff activity in streamlining reporting is the consolidation of databases without the costly effort of developing data warehouses.  Instead of going to multiple places to change or enter common information, do it once and let the applications share the data!  Instead of drawing information from multiple sources, and compiling it for reporting purposes, let the reporting application draw upon the information it needs!  Best of all performance metrics are available in real-time – which offers powerful tools for management and accountability at all levels of the organization.

TCPM promotes a growth strategy supporting the philosophy that the clients belong to the firm, rather than to individuals or practice groups. The program allows managers and staff a bird’s eye view of the business and practice management processes happening at all times. Assessing clients across industry segment and service areas enhances cross selling ability and creates a one-firm concept. Each individual staff person can look at their billable goals and from their own dashboard view see how they are doing while their managers see how they are measuring up to others on the team and within the firm.  Open and pending WIP and prior Progress & Final Bills can be viewed in a single location and workflow notifications of pending tax and project deliverables are also easily accessible. Within the program’s time and billing capabilities, the Biller’s Workbench is a powerful one-stop resource for project/billing managers to quickly generate bills and see the impact of billing decisions on realization.

Flexible Implementation

So far, we have examined many benefits of a fully integrated Practice Management application with a shared database and common user interface.  These benefits are enhanced even further, and implementation and training become simpler, if the system is built upon industry standard tools.  Some of the most common (and most powerful!) back office support tools come from Microsoft.  Specifically, these include Microsoft Dynamics CRM and Microsoft SharePoint.  These tools have the advantage of being available for an "on-premise” server installation, or in the Software as a Service model "from the cloud”.  In either configuration the integration described above is readily available.  Smaller firms with less robust internal IT support may find the cloud model appealing, while larger firms with more engineering expertise available may opt for the on-premise model.  In actuality, though, either model can fit well with either firm profile allowing clients to choose the deployment option that is right for them. Clients or prospects looking to transition to the cloud can take their time – knowing they can make the move without buying additional software or building out new infrastructure. 

Using a standard set up to start, Templeton Solutions tailors TCPM to individual firms helping with initial data organization and setup.  Clients then take over to decide their service lines, tax codes, output templates, etc...  A firm administrator is trained to support the firm’s ongoing configuration of TCPM to meet their specific needs.  Typically the implementation process lasts about two weeks but most important is a two-day event that includes the project owner and more progressive leaders in the firm that helps them design and own their process.

Rising to Meet the Management Challenge

At the outset of this article, we recognized that large and small firms alike are facing unprecedented challenges to profitable operation.  The key to profit in today’s environment is efficiency, and efficiency comes in large part from simplified and integrated back office operations.  Achieving these back office efficiencies becomes much easier when the tools are based upon industry standard applications.  TC Practice Management, built upon Microsoft Dynamics CRM and Microsoft SharePoint, provides robust back-office integration, flexible installation configurations, simplified licensing, all built on industry standard platforms.

Templeton Solutions is primed to offer a practice management system because of their association with Templeton & Company. They’ve put their everyday working knowledge of what it’s like to be part of a CPA firm into practice – as the vision and direction of TCPM came directly from the founder and partners of Templeton & Company resulting in a solution for CPAs designed by CPAs.  Realizing that many firms don’t want to fix something that’s "ain’t broke,” TCPM integrates with other systems and can be customized to fit your firm’s needs.  Templeton’s practical approach to implementation allows you to take advantage of the capabilities you need when you need them.

Has your firm committed to the alignment of people, processes and technology?  Are you positioned the way you want to be to meet the management challenges of the future?  If so, congratulations!  If not, it’s time to get started!  

About the Authors

Christopher J. Gryskiewicz, CPA, CITP, is the Executive Vice President of Templeton & Company, LLP, an accounting firm headquartered in South Florida. He also serves as a senior executive with Templeton Solutions, a technology consulting subsidiary of Templeton & Company. It is in this role that he manages high-level IT projects and leverages his business and accounting background to identify opportunities for successful, thoughtful integrations.  If you have any questions or comments regarding the content of this article, you can contact Christopher at (561) 798-9988 or chrisg@templetonco.com

Ken McCall is a Senior Consultant at Boomer Consulting, Inc.  Ken assists CPA firms of all sizes in strategic planning and technology planning. He has worked extensively in the area of training management for CPA firms. Ken is a lead facilitator and the program coordinator for The Boomer Technology Circles™, the industry’s premier peer networking group for technology management in accounting firms.


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