base retirement on today’s operations
5 critical issues and 4 behaviors of healthy organizations.
by bill reeb and dominic cingoranelli
卡塔尔世界杯常规比赛时间 / succession institute
pay & compensation
accounting industry extends 5% growth into busy season
a great time to be an accountant.
next question:
the secret to success in the accounting business?
join the survey; get the answers
by 卡塔尔世界杯常规比赛时间
have we mentioned it’s a great time to be an accountant?
we have, of course. but the good news shows no signs of slowing. according to 卡塔尔世界杯常规比赛时间 sources, increases of 5 percent or more were seen in
- overall staff employment;
- cpa firms, both overall and staff;
- payroll, both overall and staff;
- women overall, at cpa firms and in payroll;
- and tax preparation, which skipped into double digits.
payroll staff saw the steepest decline, in hourly wages. the new 卡塔尔世界杯常规比赛时间 careers and hiring outlook survey results come amid a tax season, which by most measures, is much improved over last years.
more on tax season for pro members (go pro here): busy season 2016: more clients, fewer problems | problem clients causing big trouble | most tax professionals call 2016 busy season much improved over last year | stress less this tax season | is tax season the new fraud season? | 5 tax season motivation tips | recognize your tax season resources | tax season 2016: irs in crisis | eliminate tax season excuses | record pre-season hiring surge: ready for biggest tax season ever? | 16 qualities of a good tax season client | 8 ways to delight tax season clients | small tax season leaks can cause great damage | 5 ways thorough beats sloppy in tax season | tax season management: multi-tasking is a myth | digital workflow systems make tax season easier | why cpas need to worry about cyber crime (especially in tax season)
here 卡塔尔世界杯常规比赛时间 reports on:
- current hiring trends in each of the cpa, tax, payroll and bookkeeping segments of the industry;
- average hourly wages for key segments;
- average hours worked per week;
- and trends concerning women in the accounting workforce.
the 3 best partner compensation formulas
4 common carve-outs, 9 challenges and 10 complications of all compensation systems.
by marc rosenberg
partner comp: art & science
compensation formulas are the most common system for allocating partner income.
more partner compensation for pro members (go pro here): why firms use partner comp formulas|3 subjective compensation systems | 11 points in designing a partner comp system | 3 tiers of compensation | partner compensation 101|what partners earn and how they earn it | partner compensation: an art, not a science | how partners view compensation: it’s not all about the money | why most partner comp systems are performance-based
now let’s look at some of the better formula systems we’ve seen:
who decides what?
you need to ponder some questions before you answer.
by bill reeb and dominic cingoranelli
卡塔尔世界杯常规比赛时间 / succession institute
everywhere you turn, you overhear someone talking about, being asked about the status of, or referring to their need to develop, a succession plan.
more on performance management: how retired partners are robbing their own firms | how involved should retired owners be? | how to find a partner’s replacement | action plans for transitioning partners | how retirement issues affect succession planning | succession: the questions to care about | 7 succession questions to ignore for now | cpa firm performance assessments: 15 core competencies, 21 questions
as a matter of fact, for the past 12 years through surveys with the aicpa, we have been asking firms to share with us whether or not they have a succession plan in place.
when you consider the responses to this question from the pcps succession institute succession management surveys conducted in 2008 and 2012, clearly more and more firms are:
- getting their act together,
- documenting their succession management strategy and
- thinking through the ramifications of retiring one or more senior owners.
here is the question we asked along with summary data from both surveys: read more →
how retired partners are robbing their own firms
if you don’t set policies and enforce retirement deals, your firm could become a financial hostage.
by bill reeb and dominic cingoranelli
as many as 30 percent of firms pay more to retiring partners than they initially agreed, according to our succession survey.
more on performance management for pro members: how involved should retired owners be? | firms say what would change retirement pay | action plans for transitioning partners | how retirement issues affect succession planning | how partner ratings factor into equity | develop your employees or suffer the consequences | what having your employees’ backs means | do cpa firms need management or leadership? | job 1 for the practice owner: client management
here’s why.
why firms use partner comp formulas
plus 5 ways to make them more sophisticated.
by marc rosenberg
partner comp: art & science
compensation formulas are the most common system used by cpa firms to allocate partner income. indeed, many small firms are not even aware that there are alternative systems available, and they’re puzzled as to why a firm would not want to use a formula.
more on partner compensation for pro members: 3 subjective compensation systems | 11 points in designing a partner comp system | 3 tiers of compensation | partner compensation 101| what partners earn and how they earn it | partner compensation: an art, not a science | why most partner comp systems are performance-based
compensation formulas are most heavily used by small firms, especially those with fewer than five partners. since over 90 percent of all cpa firms have fewer than five partners, formulas are the most common system. but once firms hit the five-partner mark, they find that other systems, mainly the subjective systems described in the previous chapter, are preferable. this will be explained later in this post.
read more →
how involved should retired owners be?
those still doing work should be under contract.
by bill reeb and dominic cingoranelli
卡塔尔世界杯常规比赛时间 / succession institute
system vs. system: partner compensation best practices
bonus lists: 12 allocation systems and 22 intangible performance attributes.
by marc rosenberg
cpa firm retreats
“if people are concerned about their absolute level of compensation, then they can be satisfied. however, if their focus is on relative standing, then they can never be satisfied.” – andrew grove, former chairman of intel
you’ve decided you’re going to discuss partner compensation at your next retreat, then you’ll need to start with some warm-up materials.
begin with this partner compensation best practices13-point checklist:
partner comp: three subjective compensation systems
plus balloting details for those who use paper and pencil.
by marc rosenberg
partner comp: art & science
there are at least three performance-based systems for partner compensation. none rely completely on intractable formulas, but instead introduce various degrees of subjectivity. needless to say, none are without some controversy.
more on partner compensation: 11 points in designing a partner comp system | 3 tiers of compensation | what partners earn and how they earn it | how partners view compensation: it’s not all about the money
but each system requires serious thought. here’s a comprehensive of the three approaches. which does your firm use now? why? which might be a better approach?
let’s take a closer look:
should retired partners take staffers with them?
is your plan upside down?
by bill reeb and dominic cingoranelli
卡塔尔世界杯常规比赛时间 / succession institute
11 points in designing a partner comp system
bonus checklist: the 12 systems used by firms to allocate partner income.
by marc rosenberg
partner comp: art & science
because partner compensation is the most sensitive aspect of cpa firm practice management, adopting a new system or modifying the current one requires an exceptional amount of thought, care and study. here we summarize the many issues firms need to address in designing their partner compensation system.
4 ways to create more capacity
consider creating two classes of partners.
by bill reeb and dominic cingoranelli
卡塔尔世界杯常规比赛时间 / succession institute
when partners plan to retire, how do we go about creating additional capacity or freeing up the necessary capacity to handle the client transitions that need to occur?
more on performance management: partner retirement and the war for clients | succession: the questions to care about | 7 succession questions to ignore for now | develop your employees or suffer the consequences | what having your employees’ backs means | 5 harmful management attitudes (and how to fix them) | job 1 for the practice owner: client management
first, all of the “c” clients, which is our shorthand way of describing the smallest clients the firm serves – who while profitable, don’t have much opportunity to hire us for additional services – should not be transitioned to partners, but rather to managers.
read more →
3 tiers of partner compensation
plus: 6 major factors impacting bonuses. and 4 notes from a master.
by marc rosenberg
partner comp: art & science
most cpa firm partner compensation systems consist of three tiers, each of which compensates the partners in a different way.
more on partner compensation: partner compensation 101| what partners earn and how they earn it | partner compensation: an art, not a science | how partners view compensation: it’s not all about the money | why most partner comp systems are performance-based
what is base compensation (or salary)?
it’s common to define partners’ base compensation as their historical or street value to the firm. what they bring to the firm every day. a managing partner once told me: “it’s what we would have to pay a partner at another firm to come work with us.”
practice debunked: many firms have equal bases for all partners. their thinking is that the base is merely a level of compensation that (1) is above what managers are paid and (2) is enough for the partners to live comfortably on. firms like this are operating a modified pay-equal system, which is widely viewed in the cpa industry as ineffective and unfair. not only do partners not perform equally, there is almost always a wide variation from highest to lowest performer. the case for equal bases is a weak one at best.
practice debunked: i’ve seen some firms impute partner bases as follows: first, compute hourly pay rate by dividing the standard billing rate by the firm’s billing rate multiple. then, multiply the hourly pay rate by 2,000 hours to arrive at imputed base pay. billing rate multiple is a staff person’s billing rate divided by the hourly pay rate. eighty to ninety percent of all firms are in the 3.5 to 4.0 range.