Happy Thanksgiving!
Ronald Reagan once said, “There are no great limits to growth because there are no limits to human intelligence, imagination and wonder.”
As we continue to experience times of financial uncertainty, this Thanksgiving in addition to being thankful for friends, family and good health, we can be thankful for our intelligence, imagination and wonder. For these are the things that will bring our businesses growth and prosperity during the next year.
Wednesday, November 26, 2008
Monday, November 24, 2008
Keeping Strong
The last few months have certainly been certainly been volatile financial times, leaving business owners and managers with a heightened sense of uncertainty.
This does not have to be bad news. Uncertain economic times create opportunities.
Traditionally recessions are times when the weak get sorted out and the complacent get pushed aside. They are therefore times of great opportunity for companies that see and seek the opportunity to break away and experience unprecedented growth. When times are good, virtually anybody can make a profit. But, in tough times true strengths and weaknesses are revealed.
Strong companies will continue to do what strong companies have always done. They will stick to their mission and vision.
In order to be strong, stick to my mission and vision, and to enhance my existing Delta4 advisory services and skill base, I recently attended the Principa Alliance Annual 2020 Conference. The conference was great, and provided me with new tools to help my customers in the uncertain financial times ahead. My firm is stronger as a result of attending the conference.
Strong companies continually ask themselves these crucial burning questions about their business:
This does not have to be bad news. Uncertain economic times create opportunities.
Traditionally recessions are times when the weak get sorted out and the complacent get pushed aside. They are therefore times of great opportunity for companies that see and seek the opportunity to break away and experience unprecedented growth. When times are good, virtually anybody can make a profit. But, in tough times true strengths and weaknesses are revealed.
Strong companies will continue to do what strong companies have always done. They will stick to their mission and vision.
In order to be strong, stick to my mission and vision, and to enhance my existing Delta4 advisory services and skill base, I recently attended the Principa Alliance Annual 2020 Conference. The conference was great, and provided me with new tools to help my customers in the uncertain financial times ahead. My firm is stronger as a result of attending the conference.
Strong companies continually ask themselves these crucial burning questions about their business:
- How can I offer better service than anyone else?
- How do I build better systems & controls?
- How can I make my team more productive?
- How can I compete on something other than price?
- How can I make my business stand out?
- How can I keep track of everything without burning out?
- How can I improve my profits, my lifestyle and realize the value of my business as an asset?
Wednesday, August 27, 2008
Who's In Your Pool?
The Olympics ended on Sunday. It’s nice to get back to a full night’s sleep. The one event from this Olympics that will most likely be talked about for years to come is Michael Phelps’ eight gold medals. Phelps now holds the record for the most gold medals won at a single Olympics, and in doing so broke seven world records. Phelps is now among one of the most decorated Olympic athletes of all time.
How did Phelps do this? Well, first of all he got the right people “on the bus”, or in his case “in the pool”. First he had mom. She recognized something special in her son, and she recognized the need for him to have a venue to channel his energy and develop focusing skills. She took him to swimming lessons, and had him join a swim club. There, Phelps met up with two types of coaches. The first taught him how to swim. They provided him with technical know how. The second group of coaches saw Phelps’ natural talent. They taught him how to win. They helped provide him with goals and a plan and a strategy to reach those goals. The final group of people in the pool were Phelps’ team mates who helped him win two gold medals in the relays. With preparation in place, Phelps had created a goal worth believing in and a plan to achieve it. He was able to inspire his team mates to swim beyond themselves and achieve what some had said would be impossible.
Jim Collins author of Good to Great found that companies that achieved greatness first got the right people “on the bus”. (see chapter 3) Your business already has some people “on your bus” or as with Phelps “in your pool”. Your business has a “mom”. That would be you. The one person who recognizes what’s special about your business and what it can become. Your business has the first type of coaches. They were the ones who helped you in the past as teachers to teach you your technical skills. Currently, your business has an attorney to help you’re the legal technical issues of being in business. And, your CPA help you other technical matter by preparing your tax returns. However, who’s in your pool helping you set your goals and design a strategy to achieve those goals? Who’s helping you create a vision that your team members can believe in? Who’s giving you the support you need to inspire your team to achieve what some would say is impossible?
A CPA who is a member of the Principa Alliance can be the coach that helps provide your business with goals and a strategy to achieve them. In addition, these CPAs have the financial knowledge to assist with establishing the budget that aligns with those goals. They also work with you and your team to provide systems to measure and monitor your progress.
Brenda Richter, CPA is a member of the Principa Alliance.
How did Phelps do this? Well, first of all he got the right people “on the bus”, or in his case “in the pool”. First he had mom. She recognized something special in her son, and she recognized the need for him to have a venue to channel his energy and develop focusing skills. She took him to swimming lessons, and had him join a swim club. There, Phelps met up with two types of coaches. The first taught him how to swim. They provided him with technical know how. The second group of coaches saw Phelps’ natural talent. They taught him how to win. They helped provide him with goals and a plan and a strategy to reach those goals. The final group of people in the pool were Phelps’ team mates who helped him win two gold medals in the relays. With preparation in place, Phelps had created a goal worth believing in and a plan to achieve it. He was able to inspire his team mates to swim beyond themselves and achieve what some had said would be impossible.
Jim Collins author of Good to Great found that companies that achieved greatness first got the right people “on the bus”. (see chapter 3) Your business already has some people “on your bus” or as with Phelps “in your pool”. Your business has a “mom”. That would be you. The one person who recognizes what’s special about your business and what it can become. Your business has the first type of coaches. They were the ones who helped you in the past as teachers to teach you your technical skills. Currently, your business has an attorney to help you’re the legal technical issues of being in business. And, your CPA help you other technical matter by preparing your tax returns. However, who’s in your pool helping you set your goals and design a strategy to achieve those goals? Who’s helping you create a vision that your team members can believe in? Who’s giving you the support you need to inspire your team to achieve what some would say is impossible?
A CPA who is a member of the Principa Alliance can be the coach that helps provide your business with goals and a strategy to achieve them. In addition, these CPAs have the financial knowledge to assist with establishing the budget that aligns with those goals. They also work with you and your team to provide systems to measure and monitor your progress.
Brenda Richter, CPA is a member of the Principa Alliance.
Sunday, August 24, 2008
Write It Down
Congratulations to Team USA in winning the Olympic gold medal in women's basketball.
Congratulations to Lisa Leslie for her record fourth Olympic gold medal in women's basketball.
In a post game interview, Ms. Leslie said:
The same is true for business. Studies have shown that those with clear, written goals, accomplish far more in a shorter period of time than those wothout them could ever imagine.
So, write down your goals.
A business needs more than just goal alone. Businesses need a strategy for achieving their goals and a process for measuring and monitoring their progress. Business owners can get a jump start on defining their goals, creating a strategy and establishing a monitoring system by holding a strategic planning session with a Principa CPA.
Brenda Richter, CPA is a member of the Principa Alliance.
Congratulations to Lisa Leslie for her record fourth Olympic gold medal in women's basketball.
In a post game interview, Ms. Leslie said:
"I always say to all those kids out there, Just write down your goals. You
can do what ever you want to achieve."
The same is true for business. Studies have shown that those with clear, written goals, accomplish far more in a shorter period of time than those wothout them could ever imagine.
So, write down your goals.
A business needs more than just goal alone. Businesses need a strategy for achieving their goals and a process for measuring and monitoring their progress. Business owners can get a jump start on defining their goals, creating a strategy and establishing a monitoring system by holding a strategic planning session with a Principa CPA.
Brenda Richter, CPA is a member of the Principa Alliance.
Saturday, August 16, 2008
Sunday, August 10, 2008
DID YOU BRING YOUR "A" GAME TODAY?
Friday marked the start of the 29th modern Olympic Games with a spectacular opening ceremony in Beijing. No doubt that over the next couple of weeks blogs around the world will reference the events, stories, victories and defeats of these games. Since I am an avid fan of the Olympics, my blog site will be no different.
One of the first events I sat down to watch was Men’s Beach Volleyball. Gold medal favorites Rogers/Dalhausser of Team USA were matched against bottom seeds Samoilovs/Plavins of Latvia. I would be cheering Team USA on to certain victory. Yet within in the first few points of the first game, I found myself drawn to rooting for the Latvians. There was something about the look in their eyes and the way they played together. And, as the game went on, there was the look on the face of the Latvian coach. Clearly he was satisfied that his team was playing the strategy that they spent countless hours practicing at the Baltic Sea. After two sets, my choice to root for the Latvians proved a good choice as the Latvians advanced from first round play undefeated. The game analysts described the Latvian victory as the biggest upset in Beach Volleyball history.
With results final, Team USA was interviewed as to the reasons for their unexpected loss. Rogers responded by saying that the team played its “D” game when their “B” game was all that was needed. Why would one ever consider bringing their “B” game as suggested by Rogers? Team USA had become complacent. They failed to develop a winning strategy. They failed to develop an attitude to bring their “A” game everyday no matter what the circumstance.
Jim Collins author of Good to Great sums up this with the Phrase: “Good is the enemy of great.” In other words, businesses become satisfied with being good that do not strive to go to the next level and achieve greatness. Does your business have a strategy (“A” game) to succeed? Do you and your team members show up everyday ready to play your “A” game?
Collins’ Good to Great found that businesses that ignited the transformation from “good to great” first got the right people “on the bus”. (see chapter 3) Small businesses find that once they get their team on the bus, that there are still several empty seats. One seat that can often get neglected by small businesses is the CFO. Usually these businesses are too small to require a full time CFO. Such companies now tap into the skills of top accounting and finance professionals through outsourcing arrangements.
A CPA who is a member of the Principa Alliance can help you with outsourced CFO services. In addition, such a CPA can assist you in developing your strategic plan (“A” game) and the fusion of strategy, operations and budgets. Principa CPAs also have a program (Towards Awesome Service) designed to inspire your team to come to work everyday with their “A” game.
Brenda Richter, CPA is a member of the Principa Alliance.
One of the first events I sat down to watch was Men’s Beach Volleyball. Gold medal favorites Rogers/Dalhausser of Team USA were matched against bottom seeds Samoilovs/Plavins of Latvia. I would be cheering Team USA on to certain victory. Yet within in the first few points of the first game, I found myself drawn to rooting for the Latvians. There was something about the look in their eyes and the way they played together. And, as the game went on, there was the look on the face of the Latvian coach. Clearly he was satisfied that his team was playing the strategy that they spent countless hours practicing at the Baltic Sea. After two sets, my choice to root for the Latvians proved a good choice as the Latvians advanced from first round play undefeated. The game analysts described the Latvian victory as the biggest upset in Beach Volleyball history.
With results final, Team USA was interviewed as to the reasons for their unexpected loss. Rogers responded by saying that the team played its “D” game when their “B” game was all that was needed. Why would one ever consider bringing their “B” game as suggested by Rogers? Team USA had become complacent. They failed to develop a winning strategy. They failed to develop an attitude to bring their “A” game everyday no matter what the circumstance.
Jim Collins author of Good to Great sums up this with the Phrase: “Good is the enemy of great.” In other words, businesses become satisfied with being good that do not strive to go to the next level and achieve greatness. Does your business have a strategy (“A” game) to succeed? Do you and your team members show up everyday ready to play your “A” game?
Collins’ Good to Great found that businesses that ignited the transformation from “good to great” first got the right people “on the bus”. (see chapter 3) Small businesses find that once they get their team on the bus, that there are still several empty seats. One seat that can often get neglected by small businesses is the CFO. Usually these businesses are too small to require a full time CFO. Such companies now tap into the skills of top accounting and finance professionals through outsourcing arrangements.
A CPA who is a member of the Principa Alliance can help you with outsourced CFO services. In addition, such a CPA can assist you in developing your strategic plan (“A” game) and the fusion of strategy, operations and budgets. Principa CPAs also have a program (Towards Awesome Service) designed to inspire your team to come to work everyday with their “A” game.
Brenda Richter, CPA is a member of the Principa Alliance.
Saturday, August 2, 2008
When Was Your Last HSD?
An HSD is a High Satisfaction Day. In business, HSDs are the days when mission, vision and strategy come together. They are the days when business owners and/or team members are high fiving with a sense of accomplishment. They are the days you say to yourself, “This is why I do what I do.”
Things that trigger an HSD include signing up a new customer, the creation of a new innovative product or service, the completion of a major project, or receiving a heartfelt thank-you from a customer. Michelle Golden shares an example of the latter in a recent blog.
My friend, Ron Baker, was introduced to HSDs by the New Level Group in Napa, California. Ron writes about HSDs in his book Measure What Matters, and suggests that companies should log their HSDs on a community calendar. This makes perfect sense, since as the title of the book suggests, we should measure what matters. And don’t HSDs matter?
If you or a business you know would like assistance in creating a strategy and the related budget that will help you and your team achieve more HSDs please contact a Principa CPA.
If you have an HSD that you would like to share with others, please do so by adding a comment to this post.
Things that trigger an HSD include signing up a new customer, the creation of a new innovative product or service, the completion of a major project, or receiving a heartfelt thank-you from a customer. Michelle Golden shares an example of the latter in a recent blog.
My friend, Ron Baker, was introduced to HSDs by the New Level Group in Napa, California. Ron writes about HSDs in his book Measure What Matters, and suggests that companies should log their HSDs on a community calendar. This makes perfect sense, since as the title of the book suggests, we should measure what matters. And don’t HSDs matter?
If you or a business you know would like assistance in creating a strategy and the related budget that will help you and your team achieve more HSDs please contact a Principa CPA.
If you have an HSD that you would like to share with others, please do so by adding a comment to this post.
Friday, July 25, 2008
In Memorial
Thoughts and prayers are with the Pausch family today.
Randy Pausch, subject of a previous post, passed away today. His Last Lecture video and book can be an inspiration to us all.
Randy Pausch, subject of a previous post, passed away today. His Last Lecture video and book can be an inspiration to us all.
Thursday, July 24, 2008
You Are What You Read
You are what you read. Who is your CPA? Find out what they’re reading by visiting their Shelfari site. Shelfari is an internet resource that allows participants to share, discuss, rate, tag and organize books on their own virtual bookshelf.How many a man has dated a new era in his life from the reading of a
book.
Henry David Thoreau
See the link to the right to visit my Shelfari site.
Thursday, July 17, 2008
DOING BUSINESS IN UNCERTAIN TIMES
News reports currently suggest a broad range of terminology to describe current economic conditions. We hear that there is a simple slow down with expectations of recovery before the end of the year to a full blown recession bordering in depression lasting as long a five years. No matter what your beliefs, one thing is for sure, we are experiencing an economy that includes an enhanced feeling of financial uncertainty that is having an impact on business and consumer activity.
This does not have to be bad news. Uncertain economic times create opportunities.
Traditionally recessions are times when the weak get sorted out and the complacent get pushed aside. They are therefore times of great opportunity for companies that see and seek the opportunity to break away and experience unprecedented growth. When times are good, virtually anybody can make a profit. But, in tough times true strengths and weaknesses are revealed.
Strong companies will continue to do what strong companies have always done. They will stick to their mission and vision. They create a strategic plan and related budget. They focus on their core values, customer service and they run their business for continual improvement and innovation.
If your business needs assistance with being a strong company during our current economic times, call a Principa CPA so that you can start a focused discussion.
This does not have to be bad news. Uncertain economic times create opportunities.
Traditionally recessions are times when the weak get sorted out and the complacent get pushed aside. They are therefore times of great opportunity for companies that see and seek the opportunity to break away and experience unprecedented growth. When times are good, virtually anybody can make a profit. But, in tough times true strengths and weaknesses are revealed.
Strong companies will continue to do what strong companies have always done. They will stick to their mission and vision. They create a strategic plan and related budget. They focus on their core values, customer service and they run their business for continual improvement and innovation.
If your business needs assistance with being a strong company during our current economic times, call a Principa CPA so that you can start a focused discussion.
Thursday, June 26, 2008
Are You Working With A World Class CPA?
Recently Michael Gerber, author of The E-Myth, held a teleconference for CPAs titled “Learn the Secrets of Creating a World Class Accounting Firm”.
At one point in the teleconference Gerber describes what business owners want from their CPAs. He sums it up in one word – RELIEF. Gerber says that clients want their CPAs to provide relief from:
Listen to a snippet of Michael Gerber’s teleconference.
At one point in the teleconference Gerber describes what business owners want from their CPAs. He sums it up in one word – RELIEF. Gerber says that clients want their CPAs to provide relief from:
- The unknowns of operating a business
- The frustrations of day-to-day business activities
- Mis-understandings relating to arcane financial reports
- The billable hour
- Reduce your concerns about the unknowns in your business by helping you create a strategic plan complete with alternate courses of action for different scenarios
- Minimize your frustrations with your business by assisting with the creation and documentation of your business systems and related KPIs
- Present you with your financial information in an easy to understand format with full color graphs and plain English commentary
- Provide you with a fixed price agreement with every project
Listen to a snippet of Michael Gerber’s teleconference.
Sunday, June 22, 2008
Are We Buying & Selling "Time"?
Sunday, May 25, 2008
Peter Not So Perfect
Recently a new show launched on the Style network – Peter Perfect.
Peter Perfect features stylist Peter Ishkhans as a business make over guru. In 3 days, he “helps a business go from sluggish to spectacular”. He does this by remodeling the shop and giving new hair cuts to the business owners and associates. In between Peter’s rants, the general fluff of the show and the somewhat phony drama, a small business can pick up some valuable lessons.
With just 4 episodes aired so far, the Peter Perfect message board is wrought with small businesses requesting a “me too” help for their business. This reflects a genuine need among small businesses to work with an outside advisor to provide assistance in working through the day-to-day activities as well as going to the next level.
What the show fails to demonstrate is that there is more to running a successful business than a new hair style. Even with a good hair cut, you can still have a bad hair day. Successful businesses have a solid set of core values and a well thought out and written strategic plan that includes a back up plan for bad hair days. They have systems in place to help them achieve their goals, and they measure and monitor their progress on an on going basis.
Apparently, the businesses asking for help through a TV show message board are unaware of where to turn in their business community. If your business is in need of an outside advisor to actively work with you to achieve your business goals, then look for a CPA in your area who is a member of the Principa Alliance. These CPAs are a global consortium of consulting CPAs who are dedicated to working with small businesses. Business owners that work with Principa CPAs have access to tools and resources to help them grow their business, gain a better understanding of their business, develop greater management control, increase profitability, and, perhaps, most important – achieve peace of mind when it comes to their business. Learn more about Principa CPAs at: The Principa Alliance
Brenda Richter, CPA is a member of the Principa Alliance.
Peter Perfect features stylist Peter Ishkhans as a business make over guru. In 3 days, he “helps a business go from sluggish to spectacular”. He does this by remodeling the shop and giving new hair cuts to the business owners and associates. In between Peter’s rants, the general fluff of the show and the somewhat phony drama, a small business can pick up some valuable lessons.
With just 4 episodes aired so far, the Peter Perfect message board is wrought with small businesses requesting a “me too” help for their business. This reflects a genuine need among small businesses to work with an outside advisor to provide assistance in working through the day-to-day activities as well as going to the next level.
What the show fails to demonstrate is that there is more to running a successful business than a new hair style. Even with a good hair cut, you can still have a bad hair day. Successful businesses have a solid set of core values and a well thought out and written strategic plan that includes a back up plan for bad hair days. They have systems in place to help them achieve their goals, and they measure and monitor their progress on an on going basis.
Apparently, the businesses asking for help through a TV show message board are unaware of where to turn in their business community. If your business is in need of an outside advisor to actively work with you to achieve your business goals, then look for a CPA in your area who is a member of the Principa Alliance. These CPAs are a global consortium of consulting CPAs who are dedicated to working with small businesses. Business owners that work with Principa CPAs have access to tools and resources to help them grow their business, gain a better understanding of their business, develop greater management control, increase profitability, and, perhaps, most important – achieve peace of mind when it comes to their business. Learn more about Principa CPAs at: The Principa Alliance
Brenda Richter, CPA is a member of the Principa Alliance.
Tuesday, May 6, 2008
Achieving Your Dreams
If you haven't received a link and taken the time to watch Randy Pausch's "Last Lecture", please give consideration to taking the time to watch it now. The lecture lasts about 76 minutes.
This lecture is the perfect inspiration for taking the time to evaluate your current business goals, and ask your self: "What do I want from my business?"
If you need assistance aligning your personal goals with your business strategies, contact your local Principa CPA to arrange for an all day planning session.
Thursday, May 1, 2008
Have You Met WOFIE?
Have You Met WOFIE?
WOFIE
Watching Out For Ideas of Excellence
WOFIE is the fictional character used by my firm to present business ideas and wisdom to my business customers.
WOFIE is not a canned news letter. Rather, random emails arrive with great ideas as they happen.
To date, my customers have received information on the following topics:
- The Power of a Guarantee plus a 4 page white paper on the subject
- Marketing with blogs
- Author Keith McFarland featured at a local luncheon
- Introduction to KPIs
Currently the “WOFIE Pack” is participating in a virtual jelly bean guess.
Contact your local Principa CPA, and ask to receive ideas of excellence for your business.
Tuesday, April 29, 2008
More on Guarantees
In my last post, I wrote about the power of creating guarantees for your business.
Thank you to Dr. Joe Hwang for his comments and excellent question.
Dr. Joe, a dentists, was wondering how professionals who must operate under the restrictions of a governing body can offer guarantees.
As a CPA, I too have restrictions on the guarantees that I can offer. For example, CPAs cannot not guarantee a tax refund when they prepare a tax return. Nor can CPAs guarantees that a business will receive a bank loan as a result of financial statements that they prepare. However, CPAs can provide service guarantees. They can guarantee that phone calls and emails will be responded to within one business day. They can guarantee that work will be completed within a certain time frame. And, they can guarantee up front pricing.
Professionals can create strong guarantees by looking at a combination of their unique value proposition and the key frustrations of their customers.
Professionals who are still uncomfortable with using guarantees can implement something similar through the use of service commitments, performance standards or a customer’s bill of rights.
The VeraSage Institute recommends The Consultant Customer’s Bill of Rights.
Other professionals offering guarantees in some form include:
Biggs Kofferd, CPAs
Fitchitt & Benedict, CPAs
Michael Anderson & Company, CPAs & Business Advisors
RFCO Services, LLC
Contact your local Principa CPA for tools on preparing your unique value proposition and developing the appropriate guarantee for your business.
Thank you to Dr. Joe Hwang for his comments and excellent question.
Dr. Joe, a dentists, was wondering how professionals who must operate under the restrictions of a governing body can offer guarantees.
As a CPA, I too have restrictions on the guarantees that I can offer. For example, CPAs cannot not guarantee a tax refund when they prepare a tax return. Nor can CPAs guarantees that a business will receive a bank loan as a result of financial statements that they prepare. However, CPAs can provide service guarantees. They can guarantee that phone calls and emails will be responded to within one business day. They can guarantee that work will be completed within a certain time frame. And, they can guarantee up front pricing.
Professionals can create strong guarantees by looking at a combination of their unique value proposition and the key frustrations of their customers.
Professionals who are still uncomfortable with using guarantees can implement something similar through the use of service commitments, performance standards or a customer’s bill of rights.
The VeraSage Institute recommends The Consultant Customer’s Bill of Rights.
Other professionals offering guarantees in some form include:
Biggs Kofferd, CPAs
Fitchitt & Benedict, CPAs
Michael Anderson & Company, CPAs & Business Advisors
RFCO Services, LLC
Contact your local Principa CPA for tools on preparing your unique value proposition and developing the appropriate guarantee for your business.
Wednesday, April 16, 2008
THE HEDGEHOG CONCEPT
Chapter 5 of Jim Collins’ Good to Great introduces the Hedgehog Concept.
Put simply, the Good to Great companies had developed a deep understanding about the intersection of the following 3 circles within their organization.
- What you can be the best at?
- What drives your economic engine?
- What are you deeply passionate about?
Once a business has their Hedgehog Concept in place, they can plan a strategy and a set of systems all around achieving that goal. One of the strategies a business will want to consider is a guarantee.
In 1993, Christopher Hart wrote a book called Extraordinary Guarantees. In the book he outlines the extraordinary power that guarantees have to help businesses build market share. The book details his research into guarantees and their power to also create extraordinary organizations.
Guarantees give your customers a reason to believe your stated benefits. Customers respond well when a business is willing to stand behind its product or service. Consider this additional fundamental point – Whenever a customer makes a purchase, they take a risk as to whether or not the product or service will meet their needs. When you think about it logically, then the fact that they’re taking a risk can hamper the decision making process. A proper guarantee can reduce or remove the risk.
Consider this guarantee from the Valorem Law Group of Chicago:
“If you’re interested in seeing whether we are right for you and your team, try
us on a manner. What separates us from our competitors is that you have
our value promise on every invoice. If you don’t think we’re worth the
amount you agreed to pay, you make whatever adjustment you think is
necessary. If your other firms don’t walk that talk, it’s time to try
Valorem.”
Sunday, April 13, 2008
Business Performance Measures
Our current system of accounting and financial reporting is based on a model created by an Italian monk over 500 years ago, and the modernized version was created over 100 years ago during the industrial revolution. These financial reports are lagging indicators of how the business is doing, and put an emphasis on cost of goods sold, return on assets, and other historical cost measures. This type of reporting often leads business owners and mangers to focus on the wrong aspects of the business.
Business Performance Measures represent the evolution of the accounting process to create meaningful and predictive measures for today’s modern business structures that tend to rely on human capital rather than hard assets and inventory.
Business owners and managers that incorporate performance measures into their business create organizations that are aligned for achievement. They have a set of Key Performance Indicators that are a collection of financial and non-financial measure that measure results against stated goals. And, they have a set of Key Predictive Indicators that are a collection of financial and non-financial measures that provide information regarding where the business is headed.
Last week, the Santa Barbara Chapter of the Institute of Management Accountants invited C.S. “Bud” Kulesza to speak at their monthly meeting. Mr. Kulesza is recognized across the country as an expert on Business Performance Measures. He provided information on the successful criteria for performance measures, proper goal setting techniques and different types of performance measure reports including benchmarking and the Balanced Scorecard.
I was the only CPA in public accounting in attendance.
Hmmmmmm…
When your CPA has the opportunity to learn more about leading edge accounting models – where is he/she? At the event, or back at the office working on the past?
Business Performance Measures represent the evolution of the accounting process to create meaningful and predictive measures for today’s modern business structures that tend to rely on human capital rather than hard assets and inventory.
Business owners and managers that incorporate performance measures into their business create organizations that are aligned for achievement. They have a set of Key Performance Indicators that are a collection of financial and non-financial measure that measure results against stated goals. And, they have a set of Key Predictive Indicators that are a collection of financial and non-financial measures that provide information regarding where the business is headed.
Last week, the Santa Barbara Chapter of the Institute of Management Accountants invited C.S. “Bud” Kulesza to speak at their monthly meeting. Mr. Kulesza is recognized across the country as an expert on Business Performance Measures. He provided information on the successful criteria for performance measures, proper goal setting techniques and different types of performance measure reports including benchmarking and the Balanced Scorecard.
I was the only CPA in public accounting in attendance.
Hmmmmmm…
When your CPA has the opportunity to learn more about leading edge accounting models – where is he/she? At the event, or back at the office working on the past?
Thursday, April 3, 2008
Walk the Talk
Earlier this week, a fellow CPA sent me and several of our colleagues a link to a Simple Truths video. Since I am an avid fan of Simple Truths, I was interested to see which link he sent. He sent Walk the Talk.
Two of the statements from the video struck me.
I immediately thought about how CPAs bill their customers.
I wonder, where is the integrity in hourly billing. Is it really “right” to take a customer’s information, rack up some hours, and send out a bill. In this scenario, the customer has no say as to the price until after the fact.
Would it not be more “right” to provide customers with up front pricing and payment terms regarding the services to be rendered?
Currently in the CPA industry, “the crowd” is billing by the hour. Yet, there are CPAs and Chartered Accountants around the world who are following their conscience and providing up front pricing.
Ask your CPA about their core values. Are they “just words”, or does your CPA “Walk the Talk”?
Two of the statements from the video struck me.
Integrity –
Choose rightness over ease and convenience.
I immediately thought about how CPAs bill their customers.
I wonder, where is the integrity in hourly billing. Is it really “right” to take a customer’s information, rack up some hours, and send out a bill. In this scenario, the customer has no say as to the price until after the fact.
Would it not be more “right” to provide customers with up front pricing and payment terms regarding the services to be rendered?
Courage –
Follow your conscience instead of “following the crowd”.
Currently in the CPA industry, “the crowd” is billing by the hour. Yet, there are CPAs and Chartered Accountants around the world who are following their conscience and providing up front pricing.
Ask your CPA about their core values. Are they “just words”, or does your CPA “Walk the Talk”?
Monday, March 24, 2008
Is Your CPA Right for Your Bus?
First Who…Then What
That is the title of Chapter 3 of Good to Great by Jim Collins. The main point of this chapter is not just about assembling the right team—that’s nothing new. The main point is to first get the right people on the bus (and the wrong people off the bus) before you figure out where to drive it. The second key point is the degree of sheer rigor needed with regard to people decisions in order to take a company from good to great.
The problem for small businesses is that when they look at their bus, there are still many empty seats. In order to fill all the seats, as a small business owner, this means that you must expand your concept of “The Bus” to include not just your Team but also your professional advisors and service providers such as their CPA, lawyer and IT consultant.
Core Competencies
When you think of your CPA as one of the “right” people to be on your bus, what core competencies would you like him/her to bring along? For each business, the answer will be a different combination of skills. However, most will include such things as tax knowledge, GAAP knowledge, financial savvy, and the like.
When you invite your CPA to be on your bus, be sure to ask about their core competencies and how they will meet your needs. Verify their core competencies by asking about the systems they have in place to control, improve and enhance their core competencies. Also, ask them what KPIs they use to measure the effectiveness of their core competencies.
The Disconnect
Recently, I was having a conversation with my friend Catherine. Catherine works at a local CPA firm in Seattle. Her firm started a “Good to Great” journey about a year ago. At first Catherine was quite excited. Each team member received their own copy of Jim Collins’ book Good to Great. Leadership roles in the firm were reassigned. And even though it was difficult, the firm took steps to get the wrong people off the bus. A committee was formed to discover and articulate the firm’s core values and the annual performance review form was redesigned to match those values.
However, Catherine has started to notice a disconnect between the firms stated core values and desire to add value to their customer’s businesses and lives and the systems the firm has in place for managing the day-to-day activities.
Catherine sent me the following interoffice memo that was sent to every team member of her firm:
I couldn’t agree more with Catherine. A firm this focused on time keeping can only bring one core competency to the table, and that is the ability to track every activity in their lives in six minute intervals.
So ask yourself: “Is the inordinate amount of resources that your CPA is putting into time based billing really making them the “right” person for your bus?”
That is the title of Chapter 3 of Good to Great by Jim Collins. The main point of this chapter is not just about assembling the right team—that’s nothing new. The main point is to first get the right people on the bus (and the wrong people off the bus) before you figure out where to drive it. The second key point is the degree of sheer rigor needed with regard to people decisions in order to take a company from good to great.
The problem for small businesses is that when they look at their bus, there are still many empty seats. In order to fill all the seats, as a small business owner, this means that you must expand your concept of “The Bus” to include not just your Team but also your professional advisors and service providers such as their CPA, lawyer and IT consultant.
Core Competencies
When you think of your CPA as one of the “right” people to be on your bus, what core competencies would you like him/her to bring along? For each business, the answer will be a different combination of skills. However, most will include such things as tax knowledge, GAAP knowledge, financial savvy, and the like.
When you invite your CPA to be on your bus, be sure to ask about their core competencies and how they will meet your needs. Verify their core competencies by asking about the systems they have in place to control, improve and enhance their core competencies. Also, ask them what KPIs they use to measure the effectiveness of their core competencies.
The Disconnect
Recently, I was having a conversation with my friend Catherine. Catherine works at a local CPA firm in Seattle. Her firm started a “Good to Great” journey about a year ago. At first Catherine was quite excited. Each team member received their own copy of Jim Collins’ book Good to Great. Leadership roles in the firm were reassigned. And even though it was difficult, the firm took steps to get the wrong people off the bus. A committee was formed to discover and articulate the firm’s core values and the annual performance review form was redesigned to match those values.
However, Catherine has started to notice a disconnect between the firms stated core values and desire to add value to their customer’s businesses and lives and the systems the firm has in place for managing the day-to-day activities.
Catherine sent me the following interoffice memo that was sent to every team member of her firm:
Catherine feels that the onerous time keeping system and hourly billing techniques used by the firm distracts team members from the firm’s core values and provides no value to the customer.Weekly Time Summary Report to be delivered starting Monday,
3/17
As another step along our journey from Good to Great, all team members and mentors will receive, via an automated email, a weekly Time Summary with both
summarized billable stats, including budgeted, and a detailed listing of non-billable time. It is my hope that by providing this information regularly, each team member can better monitor their progress toward their budget and in turn, toward the firm’s goals.A couple things to keep in mind regarding this report: It will only report on time entered and/or released, so while we are required to enter time daily anyway, please make double-certain that your time is in by the end of the week. Also, when entering non-billable time, if you don’t enter a description, the report will ‘red-line’ the time entry with a reference of “Description Required for NonChargeable Time “, so please make sure to include references when entering non-billable time.
I expect that this report will lead to questions about time entry standards, especially with respect to non-billable time. After tax season, I expect to hold sessions for mentors and all team members aimed at consistency among time-keepers. In the meantime, continue to refer to the ‘XYZ Non-Chargeable Codes’ memo from the billing clerk, and forward time-keeping questions directly to me, as it will help me compile a list I make sure to address.
As a final comment, I hope this doesn’t seem like a ‘big brother’ thing. This information has always been available, and I believe that making it more visible and regular will help the ‘disciplined people’, ‘disciplined thought’, and ‘disciplined action’ of the Good to Great journey be just that much easier to implement.
I couldn’t agree more with Catherine. A firm this focused on time keeping can only bring one core competency to the table, and that is the ability to track every activity in their lives in six minute intervals.
So ask yourself: “Is the inordinate amount of resources that your CPA is putting into time based billing really making them the “right” person for your bus?”
Tuesday, January 22, 2008
Business Boot Camp
Every so often something NEW comes along.
Of course, it’s even better when that something new also happens
to be something that adds terrific value to your business.
With those two things in mind (new and adding value) I would like to tell you more about the Business Boot Camp™.
It is exactly the sort of program small business owners have been asking for.
Research from last year’s Good to Great event indicates that business owners want to be educated about the following:
Understand their business
Understand their financials
Understand problems and solutions
Enhance business ownership skills
In addition, business owners also mentioned that they enjoyed the opportunity to meet with other business owners to talk and learn about business processes.
The Business Boot Camp™ is an opportunity for small business owners to come together and develop their CEO skills, and in turn create extraordinary businesses and extraordinary lives.
Business Boot Camp™ groups are now forming.
If you would like to learn more about the Business Boot Camp™, please attend one of the following complementary meetings:
Friday February 1, 2008
5:30 pm – 8:00 pm (includes light dinner)
Location: 801 Garden Street, Santa Barbara
Also, if you know any other business owners who might be interested, please invite them to join you. If you would like, I can send this information to them.
RSVP to: Brenda Richter, CPA
Brenda@BrendaRichterCPA.com
If you are unable to attend either of these meetings, and would like more information, please contact me and arrange for a separate meeting.
I look forward to meeting with you. Please let me know if you have any questions.
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