7 Business Challenges Facing CPAs

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Principles taught in management courses sound so good in theory, working under the assumption everyone is even-tempered, well-organized, and process-driven.

However, in real life, people act irrationally, prioritize poorly, or rely on MBO (management by outburst). You must get things done, regardless.

Challenge One: Costing Projects

The public thinks large companies throw cash around. In reality, they throw nickels like manhole covers. Winning business is tough in a highly competitive environment. Firms need to bid attractively to win the business while making the job worthwhile financially.

The solution starts with team structure and resource availability. Historical data for the client or industry provides context. Will the addition of certain individuals or skills sway the prospect? Technology is a major benefit in this process.

Challenge Two: Client Preparation 

People want to get the most value while paying the least amount. Your client might want a low-priced project that’s light on resources. They will provide documentation and work hours internally. But when the job starts, they thought you were doing all the heavy lifting.

The solution is balancing act. The partner/relationship manager must “keep the client happy” while explaining costs rise if additional staff hours are needed because of inadequate preparation. Contracts typically spell out the billable time, preparation, and expectations for both sides. At ground level, a team member, checklist in hand, liaisons with the client beforehand.

Challenge Three: Team Dynamics

Jobs are completed by project teams. In theory, they are motivated, organized, and process-driven. In reality, not everyone gets along. Allowing project managers to assemble teams works better than a top-down assignment process. The problem is getting the most from the team, which may need to work long hours under high pressure.

The solution starts with the team leader treating everyone as individuals and equals. Their goal is to get their best individual performance. Problems need to be identified, information shared, needs communicated, and completion tracked. Technology plays a major role.

Challenge Four: Managing Workflow

Jobs are bid individually but completed simultaneously. Scarce resources need sharing. Problems develop. Projects run ahead or behind schedule. Meanwhile, deadlines loom.

For years this process was tracked using spreadsheets. Today, technology provides better solutions, allowing for tracking simultaneous projects and measuring actual vs. targeted progress. Technology allows managers to anticipate problems instead of reacting to them.

Challenge Five: Motivating Employees

“A lack of planning on your part doesn’t constitute an emergency on mine.” Managers must deliver the project on time by getting team members to work together at peak performance.

The problem is often attitude. People working long hours and feeling underappreciated often narrowly define their role and attempt to shift ownership of problems to others. If the climate continues, staff attrition can become another problem.

Managers must understand what motivates each team member. It might not be money; perhaps it’s recognition, education, or even a management track. They work to deliver on those aspirations, expecting the team member’s best performance in return.

Challenge Six: Allocating Resources

We have done so much with so little for so long, we are now able to do absolutely anything with nothing. There are never enough resources to go around. Multiple projects mean multiple demands on scarce resources. People take vacations, they change jobs, and projects need to be completed on time.

Technology is part of the solution. Tracking multiple jobs allows managers to anticipate resource needs. If bottlenecks develop and skills are in short supply, temporary help may be hired.

Challenge Seven: Getting Paid

Clients can be surprisingly slow in paying, once their job has been completed. Big firms will eventually pay, but sometimes firms declare bankruptcy.

The problem is staying on top of invoices without alienating the client and risking future business. Some solutions have drawbacks. Billing on completion raises the risk of nonpayment, and asking for payment in advance implies they aren’t creditworthy.

The solution is often to use a payment plan with specific sums due as different stages of the project are completed. Many challenges facing managers in accounting firms can be solved by technology or people skills.

About Bryce Sanders

Bryce Sanders

Bryce Sanders is president of Perceptive Business Solutions Inc. in New Hope, Pennsylvania. He provides high-net-worth client acquisition training for the financial services industry. His book, Captivating the Wealthy Investor, can be found on Amazon.com.

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