CPAs

My Profitability has Doubled and my Receipts Have Nearly Doubled

By December 2, 2019 December 12th, 2019 No Comments

I had never intended to open my own CPA firm. Previously, I had been working at a small accounting practice where the owner was very abusive to the staff. Unwilling to continue, I submitted my notice in mid-February 2004. But I didn’t want to see the owner stranded during tax season, so I offered to stay until May. He declined and I left two days later, at a time when most tax preparation firms had already hired extra help. Faced with the choice of doing nothing or starting my own business, I opted for the latter. With referrals from professional contacts and former clients who had tracked me down through the state’s Bureau of Accountancy, I started my practice.

It went well and we grew quickly, but I was going through a lot of administrative staff. I tended to think the best of people and when I began hiring, I envisioned having qualified applicants who didn’t lie on their resumes. I assumed what they were telling me was true, but I later realized it didn’t work that way. I had no issues firing the support staff who didn’t cut the mustard. In 2008, however, I hired my first problem professional.

My new employee kept asking for more money, even though she wouldn’t give more in return—she seemed to expect me to pay her for breathing. After covering her salary, licensing fees, and continuing education, she wound up drawing more resources out of the business than she put in. With just four days’ notice, she quit in August 2010 during what I consider to be tax season number two. But once she left, I realized how ineffective she was—I had been factually working to support her. My receptionist, who went off on tangents instead of doing saleable work, quit the same day. Once they were gone, my workload actually decreased.

I didn’t know how to find good people. I’d advertise, look at all the applications, interview the candidates and, based on my selections, end up with the wrong person. Everyone looked so good due to what I call “grade and resume inflation.” In an interview, for example, someone would say they were a bookkeeper or knew QuickBooks when they had done no more than enter data a few times. These were people who touched something and then called themselves professionals. Or other applicants would say they were “A” students in school which doesn’t necessarily mean they could do the job.

To get some help on hiring, I checked into Sterling. I began with a two-day seminar that came with a book on how to hire and motivate good staff by Kevin Wilson, Sterling’s CEO. Interested in learning more, I took a class that taught management fundamentals. It was awesome and brought me into spending more time and energy with Sterling.

My next step was their communication course. Although I had no trouble interacting with clients, I did with the staff. I had always expected employees would give me their best but their best wasn’t there; what they gave me instead was their time. But rather than opening my mouth, I wished they could just read my mind. That was why I took Sterling’s communication course. I learned exactly how to make sure my employees understand what they need to do, how they need to do it and why.

With Sterling’s help, I revamped our hiring process. I no longer screen the applications—what I am looking for is a willing person to train. When someone sends in a resume, we send them an application with two short tests and a deadline. If they don’t make the deadline, we don’t see them. If they pass the two tests, we schedule them to come in and when they do, I might not even look at their resume. Instead, I ask questions to determine what they know, and in about five minutes, I can pluck out the ones with “grade and resume inflation.” Then I pick some candidates and Sterling does a round of testing on them. The vast majority of the time, this plan works extremely well. When I deviate from it, I regret it, such as the time I hired a personal friend whom I had to fire.

I used to consider myself in charge of all the marketing and bringing in new clients. Sterling showed me how to play games with the staff so I started one of my own. On a weekly basis, I give points to any staff member who brings in a business card, more points for following up with the prospective client and more points again for making an appointment. The one with the most points gets a chance to pick a gift from the grab bag every week. This helps motivate the staff and they better understand what they’re supposed to do.

Thanks to Sterling, I no longer have to pay for deadwood. As a result, my profitability has doubled and my receipts have nearly doubled. I’ve also been taking more vacation time than ever—seven weeks just this past year alone. I am making up for lost time.

Sterling supplies me with a support system for discussing office and employee behavior and solidifying what I am going to do about them. I used to complain about expecting the best from my employees and not getting it. Now I expect their best and, thanks to Sterling, I get their best.

Beth Symons, CPA