Is the Size of Your Firm a Strength or a Weakness?
New M&A deals are announced almost daily in the accounting profession, and this activity is expected to increase in the coming years as firms of all sizes look for solutions to fund retirements or grow their practices. As the profession consolidates and firms get larger, it begs the question: is the size of your firm your greatest strength or your greatest weakness?
Small firms may be able to function well even without strong leadership and a shared vision. Their flexibility, collegial atmosphere and ample opportunity for challenging work may help them excel in recruiting, retention and client service despite their modest size. But leadership weaknesses in firms of all sizes can’t be ignored as a firm grows.
We see this often in our Lean process improvement projects. Without a clear vision and leadership buy-in, a firm’s processes are messier, and staff members navigate more personal preferences of partners. With four or five partners, personal preferences may be manageable. But imagine being a new staff accountant at a firm with 30 partners and trying to keep track which set of work papers you need to use for each partner?
Personal preferences aren’t a minor annoyance; they’re a quality control problem. The only way to improve the quality of your product (tax returns, financial statements, etc.) is to build consistency into your processes. Without consistency, reviewers spend too much time in the weeds and your staff becomes frustrated because they recognize they are wasting time fixing personal preferences that don’t add value for clients.
These problems can appear when the growth is organic, but they’re especially problematic when firms merge. A new firm is brought in without gaining an understanding of vision or syncing processes. Suddenly one firm has two (or more) ways of doing the same work. Different geographical locations can’t work together to leverage their size because processes – and often technology – are different.
If these issues sound familiar, it doesn’t have to be this way. Partners are often the problem as well as the key to success. Start with strategic planning to get your firm rowing in the same direction. Once that is established, you can begin identifying weaknesses and designing consistent processes.
Growth is the lifeblood of a firm. To remain relevant in the face of increasing commoditization and automation firms need to grow and leverage their size. Whether your firm has four partners or four hundred, your ability to compete is determined by how efficiently you can leverage your existing assets (people and technology) to increase productivity and profits. This is what will differentiate you from the competition.
As a CPA, Consultant and Lean Six Sigma Black Belt for Boomer Consulting, Inc., Michael leverages his past CPA firm experience to provide factual, reliable and thorough results on client engagements. He now focuses on Lean Six Sigma projects and training, strategic planning, technology planning and engagements designed to fulfill the custom needs of CPA firms across the country.