The CPA Firm. CPA Mark Omona. 28-Nov-17. Practice Management Course

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1 The CPA Firm CPA Mark Omona

2 Agenda Change is the new constant Its a Business Too! Firm Structures Managing Yourself Professional Fees Balancing Risk and Reward

3 The Profession is Changing! New competitors new entrants into the market place Even the Big Four now have products for SMEs Using technologies such as Xero are providing real time services to SMEs?

4 Future Accounting Firms More change in the profession than ever before Clients are able to use technology to deliver results to prepare their own tax returns & accounts Govt is increasingly requiring online filing Technology companies are delivering cloudbased applications Accountants are increasingly the replaceable middlemen

5 Lessons from the UK ICAEW Report on the Value Added Profession and The Profitable & Sustainable Practice Some firms brought in specialists for particular services Develop a range of advisory services to meet an existing need

6 Research from the UK Firms with a 30% one-year growth said: Developed proactive, hands on advisory services Had continous contact with their clients Look for new opportunities for their firm Advisory services account for 50% of their turnover Rebranding differentiate yourself Integrated marketing strategy online & offline Client referrals dedicated client manager

7 Research from the UK Firms with a 30% one-year growth said: Professional referrals Investment in staff & internal promotion Investment in recruitment Sales & marketing alignment Prospect targeting target sectors Performance metrics measure everything Strong framework of values Manage efficiency levels Enhance customer experience Innovation

8 Why do you want to go into practice?

9 Its a business! Highly regulated environment Strongly ethical environment Strong compliance demands Where will you find the clients?

10 Its a business! Stick to What You Know Talk about the value that you provide Contact your professional references Partner with other professionals in your space Be patient, be confident, keep growing & keep expanding!

11 Firm Structure Sole Practitioner Income from Personal Services or Loan? Full time or part-time? What are the risks? Continuity arrangements Separate the business from your private dealings?

12 Firm Structure Partnerships Partnership Agreement Share profits, risks and responsibilities Risk of joint and several liability Succession Limited partnerships Non-equity partnerships

13 Firm Structure Partnerships Other Considerations Have you delegated decision making authority (power of attorney)? How are disputes resolved? Frequency and timing of meetings. Managing outside interest & obligations Specific roles and responsibilities Productivity levels How is entry/exit price determined? What happens on death/disability of partner?

14 Managing Yourself Improve Your Self Management Skills Stop Holding Yourself Back Prepare yourself adequately before jumping in. Learn how to market yourself.

15 Your Personal Development Plan Assess your own competence Are you still up-to-date? Rate of change is high May need to specialise Revitalise your development plan Develop your unique advisory skills Go beyond compliance Clients do not care how the engine works Assume you are technically competent and until they discover you are not

16 Trusted Business Advisor Understand your client Are consistent Help clients see things from a new perspective Challenge assumptions Make the client feel comfortable Don t force the solution down on the client Criticise and correct gently Are in it for the long haul Help the client to think Give options to the client & help them understand the options Are smart in ways that the client is not Client can depend/rely on you

17 Firm Structure Why do partnerships in Uganda struggle?

18 Firm Structure Partnerships Other Considerations Non-chargeable work Managing partner Retirement age How do you share the rewards?

19 Professional Fees Time-based billing Pre-packaged services Value pricing

20 Balancing Risk and Reward

21 Change It is not necessary to change (W. Edwards Deming) It is not the strongest of the species that survives nor the most intelligent, but the one most responsive to change (Charles Darwin) Survival is not mandatory (Deming)

22 Worth quoting The chains of habit are too weak to be felt until they are too strong to be broken Samuel Johnson You can t solve a problem with the same thinking that created it Albert Einstein

23 Recommended reading Clients4Life Mark Lloydbottom, FCA and Dave Cottle, CPA Published by ICAS

24 The meaning of success

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