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:

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.

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.

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?”