After 14 years of managing my own practice, growth slowed and became tougher to maintain. We were doing okay by most metrics and I was making more money than most, but I was working harder with more stress. When the recession hit in 2008, I lost several clients who had gone out of business. As a result, we had our first down year ever.
I knew my house was not in order but I did not know how to fix it. The biggest problem was I had some underperforming staff and did not know any better. One of my accountants was routinely insubordinate. When I pointed out her mistakes, which I did in the hope she would stop making them, she took it personally and was insulted. When she did finish her work, it was still subpar. Another accountant was lazy and did not get along with others. I could see she had potential but she did not care about the practice or her work and was frequently out of the office.
I did not understand how to deal with employees or what a good employee was. Since we were making decent money, I thought, why change anything? During my 14 years in practice, I had fired only one employee. I would later learn how damaging it is to tolerate bad staff.
Also, since I was overloaded by the work I paid my staff to do, I did not have time to cultivate my leads. Deep down, I did not want more clients because they would only add to my troubles and workload. I was starting to burn out.
Although I was a competent accountant, I did not know how to take my practice to the next level. As long as we were growing, that was never an issue. But once the growth slowed and the hard work increased, I knew I had to change something. I had received a letter from Sterling and requested a copy of their management DVD. After watching it, talking to Sterling and their clients, I signed up for their program in September 2009.
I went to Sterling’s offices to do my management courses and start my customized consulting. As I progressed through my initial training and consulting, I could see how all of the pieces fit together into one practical system of management. When I finished my courses, I was gung-ho and ready to return home to get my practice back on track and prepare for tax season.
I began by implementing Sterling’s management by statistics system. With the guidance of my consultant, I was able to quantify the productivity of every employee. I could objectively measure the output of every accountant and see where I was making money, where I could charge more and where I had to cut my losses. I never could have done that without managing by statistics. I also used statistics to monitor the work of the administrative staff. I could see who was actually earning their pay and who was not.
My consultant and I rolled up our sleeves and went to work on the staff. In my courses, I had learned the difference between a good and bad employee and decided to fire the belligerent accountant. Since she did so little, I was able to distribute her work to the other staff. Surprisingly, more work got done in the practice without replacing her! That was when I learned my first big lesson: it is better to have a position unoccupied than to fill it with a negative employee.
After then watching the declining productivity statistics of the lazy accountant for six months, I let her go, too. No amount of prodding could bring her performance to the level it needed to be. The staff appreciated my letting her go. I discovered having non-productive or negative staff hurts the morale of everyone in the practice.
To prevent hiring mistakes, we implemented Sterling’s personnel testing on job applicants. My experience is the testing does not lie. I had one applicant flunk an aptitude test but I liked her and hired her against my consultant’s recommendations. Ten months later, she melted down and I let her go. The biggest lesson I have learned from Sterling is you have to keep the good staff, weed out the bad staff and know how to tell which is which.
My attitude toward clients is different, too. In the past, some clients bullied me and pushed me around. Now, I maintain my composure. If a mistake is made, I apologize but I do not let the client rant and rave. Instead, I keep the focus on how we can make it right.
Tax seasons are much more organized; everything is done on a first-in, first-out basis—no one has to wait. While I cannot give Sterling all the credit for that, they contributed a lot to this improvement.
It has been three years since I signed on with Sterling. In that time, my revenues have increased by nearly 25%. More importantly, my net has increased by over 50%. My employees know what is expected of them and they do the lion’s share of the work. I trust them and empower them. This has brought me tremendous freedom. I no longer have to pound out my guts working just to keep things going. The stress is gone. I am more relaxed and confident with who I am and operate on a higher plane. All in all, the Sterling program has given me my life back.
Dan Wasserman, CPA
