I had been the controller of a small restaurant chain when I decided to enter public accounting. It was the hands-on client relationships and autonomy of a small CPA firm that appealed to me. At the time, my cousin had owned an accounting practice which I joined as an associate. Retirement-minded, my cousin later approached me about taking over his business. I became sole owner in November 1987, but due to circumstances beyond my control, I never had the “smooth transition” I had been counting on.
Over the next two months, I watched the firm’s billings evaporate by 35%. Worried, I started working 7 days a week, 16 hours a day until tax season ended. Over the next 20 years, we plodded along with billings increasing from $210,000 to the mid-$700s where they stagnated for four to five years. Not growing, yet not shrinking, I pocketed enough to live on but wasn’t making what I should.
The issue wasn’t new business; I’d always been a rainmaker and could bring in the clients. The problem was having good employees who would participate and function. Because my name was on the front door, the staff truly believed I was ultimately responsible for everything. For instance, I’d promise a client a job by Friday. Come Friday, I’d look around and no one would be in the office even though the job wasn’t done. Their attitude was, “Dennis will finish it” or “Dennis will fix it” and “It’s his client, I just help Dennis.”
There’s an old saying, “You can’t sprint a marathon.” For us, it was the urgency of tax season all year long; we were always in sprint mode. I’d come home every night for dinner to see the kids but then would go back to the office. My wife and I were like two ships passing. I had to ask myself, “Do I really want to keep doing this for another 15 years?”
One day, I had a wonderful phone conversation with a Sterling service consultant who then sent me a DVD about their program. The DVD walked me through the trials and tribulations of running a practice and as I watched it, I kept thinking, “Yeah, that’s me.” I realized Sterling was a company I should be talking to and became a client.
What resonates with me about the Sterling program is it provides the entire rainbow of information. Typical management books give narrow slivers of information about components, like budgeting or hiring. These books have too little information and they don’t talk to each other. With Sterling’s program, all the pieces fit together.
I started with their executive courses and learned to talk with my employees about what I expect from them. I have no problem talking to people in general, but I get anxious if I don’t know where a conversation is going. I got out of my comfort zone and spoke to the staff about the service we’re delivering, their part in it and what I expect from them. This put us all on the same page.
Sterling also tackled the inefficiency which was eroding our billable hours. One day, for example, we couldn’t find a client file. It took all 7 of us 15 minutes to locate it and when we did, we patted ourselves on the back for being such a great team. In reality, we’d lost 1½ billable hours looking for the lost file and probably another 1½ billable hours refocusing on the work we had previously been doing. The real problem was no single employee was accountable for the file in the first place.
Another issue was the staff’s misunderstanding of words and terms. For instance, we log every new client into the practice. To me, that means the client is entered into our system, given a correctly labeled file, a timesheet and so on. My consultant suggested I ask each of my seven staff what “logging in” a client meant to them. In response, I got seven different answers. They each incorrectly logged in clients their own way which caused extra work and wasted time. That was a moment of enlightenment. Understanding words is critical so we know what each other is talking about.
Sterling addressed these issues by defining terms, processes and job functions office-wide. They trained the staff so everyone knew what their duties and responsibilities were—something that can be blurry in a small firm. Organizing and streamlining the office equated to more billable hours for all of us.
My consultant taught me how to play games to motivate the staff. Last October, for example, when we were running a little behind, I offered a $20 reward for every tax return completed above a certain threshold by October 15. As a result, the three staff involved got 55 more returns done between them, over and above their regular workload.
Since starting with Sterling five years ago, my previously stagnant billings increased by almost 30%. Although tax season can still be a challenge, I am able to take off six to seven weeks every year to spend with my wife and family. We have a great relationship and they’re very supportive.
Once Sterling brought their management concepts to the table, it brought up my level of consciousness in these areas. I realized I had allowed the staff to think I would do their jobs for them. I don’t anymore. Now I understand the big picture and I am in control. I could have read every management book there is but none connect the dots. The Sterling program does. It makes all the parts fit together to weave the fabric of management.
Dennis Goldstein, CPA