The art of accounting: the best everlasting principles
I share my experiences with these columns but bring them back to the present time and in many cases push some ideas for tomorrow. While the world of accounting and business was completely different when I started out than it is today, there are more similarities than one might imagine.
The techniques we use are completely different. When I first started I used a slide rule to get percentages. Today, they are almost automatic with the software we use. When I first started, a big thrill was having a new pad of accounting paper with a brand new sheet of never used carbon pencil paper. Today neither exists, and pencils are a relic too (unless you do a crossword puzzle and make sure you have a good eraser on them).
However, the underlying business principles are still the same. Here are the top 10 principles that have been consistent since the start of my career, and probably for many years before:
- Be courteous: Respect the point of view of others. Listen to them. Let them express themselves. Listening does not mean agreeing with them, but listening to them. I also have a simple rule that says the more you let other people talk to you, the smarter they think you are. In addition, follow the golden rule of treating others as you would like to be treated. It might be a cliché, but it’s an important way to relate to others.
- Customers pay your salary: The sales mantra is that the customer is always right, except when they want you to compromise your values, or when they hire you to help them go in a different direction and then insist on following the old ways that he is comfortable. You are committed to expressing your opinion and being clear about what you want to say that will cause positive action, so do it!
- Customers pay your pay cut: They can’t pay your salary if you don’t invoice promptly or ask for payment when your bills slip into the overdue area. Customers also need a clear understanding of what you would and wouldn’t do and the price. Indeterminate prices are unclear, leave you in doubt, put you in a possible fighting position every time an invoice is received by your customer, or cause a customer to withhold the call because they imagine that this interaction is moderated by a cash register.
- Staff creates leverage so you can grow: Staff must be trained and understand how they can evolve. Given this opportunity, they should adhere to your culture of superior customer service, be held accountable for below normal performance, be noticed and feel appreciated for superior performance, and be paid fairly. They should also be proud of their growth and your business.
- Your practice must grow: Growth comes from three sources: new customers, added services to existing customers and the acquisition of other practices. Satisfied clients hire your firm for additional services and refer new clients. Everything else requires additional marketing efforts, which divert energies that could be better applied to existing customers. If your business has a model that includes adding practices, it’s a different strategy and pushes your practice into an “enterprise” mode. Know what you want and do it next, but I don’t think all three can be done by too many companies simultaneously.
- Develop a strategic plan: Figure out where you want to be in five years and compare that to what you probably would be if you didn’t make any changes. For me, this is the start of your strategic plan.
- Meet all deadlines: Due dates are promises. Do not lie. Keep your promises. If you don’t think you can meet a due date, let the client (or the person you promised) know before that date, not after.
- Strengthen your brand: You have a mark whether you realize it or not. Explain it in everything you do, and how you represent your business and not just how you want to look to outsiders, but how you relate to each other.
- You are in a company: Businesses need clear leadership, management, direction, processes and systems, and profitability. Your actions must align with that. It also means buy-in from partners and no separate system or procedure for some partners.
- Availablity: Be available to your customers. Respond quickly to their calls, emails, and texts, and start calls, recordings, and meetings. Good crisis responses are great, and avoiding crises doesn’t give you extra credit, but a continued pattern of calm under your watch will elevate you to the status of a trusted advisor.
Nothing here is new, but these are as relevant and important today as they ever were. If you agree with me, try to adopt some or all of these principles as your best principles.
Do not hesitate to contact me at [email protected] with your questions about the management of your practice or about assignments that you may not be able to perform.
Edward Mendlowitz, CPA, is a partner at WithumSmith + Brown, PC, CPAs. He is on Accounting Today’s 100 Influential People list. He is the author of 24 books, including “How to Review Tax Returns”, co-authored with Andrew D. Mendlowitz, and “Managing Your Tax Season, Third Edition”. He also writes a twice weekly blog covering customer issues at www.partners-network.com as well as the Pay-Less-Tax Man blog for Bottom Line. He is an Assistant Professor in the MBA program at Fairleigh Dickinson University and teaches end user financial statement applications. Art of Accounting is an ongoing series where he shares autobiographical experiences with tips he hopes his colleagues can adopt. He welcomes questions about practice management and can be contacted at (732) 743-4582 or [email protected]