Timothy Geithner looking back at his time with the New York Fed and how he addressed the banking crisis as quoted in The Washington Post, April 3, 2009
There are times in life when we just can’t get there from here. That was clearly the issue in the banking system and I assume the same could be said about many of our perceptions and traditional ways of doing business. Do we try to manage within our current framework or is it time to change the framework to address the challenges of our current reality? At this unprecedented time in our history I think accounting firms have reached this fork in the road. Is it business as usual or is it time for a new structure and framework for the practice of public accounting? Here’s my take the current situation:
- Labor costs as a percentage of net revenues have continued to increase for the past 8-10 years now approaching 50 of net revenues in many firms.
- Fees have not increased proportionately to compensate for this increase in labor costs.
- Accountants consistently tell me that at least 50% of their work could be done by someone with less experience.
- As the baby boomers retire there has been and will continue to be a loss expertise in our profession.
- Many partners are more concerned than ever about the quality and timeliness of their services.
- Utilization is a major concern in most firms.
- Technology is not sufficiently leveraged in most practices. In many cases partners have become data entry specialists because they have the software on their desk.
I'm sure there are many more practice concerns that need some attention that I have not addressed but this list should give us a few ideas to begin the discussion. I want to help partners develop new efficient practice models and client service delivery systems that mitigate risk, provide for significantly improved client service and satisfaction as well as enhanced partner profitability.
Please share any thoughts you have about the current situation in your firm as well as any other observations about how this profession can be improved. It is only through public dialog and debate that we will find the solutions to these problems and allow you to achieve the professional life you desire and deserve. I look forward to taking the journey with all of you.