Accounting for excellence

Some of the nation's best firms are in Maryland, according to INSIDE Public Accounting. Here are the secrets to their success.

By Bill Sheridan
MACPA Editor

How do the nation's top accounting firms do business?

In Maryland, you don't have to go far to find the answer.

Four area firms were included on INSIDE Public Accounting's 1994 list of the best-managed accounting firms in the nation, based on fiscal and management performance.

Aronson & Co. of Rockville and Bethesda-based Reznick Group were included on the magazine's "Best of the Best" list of the 25 best-managed firms.
The magazine's list of honorable mentions included Beers & Cutler, based in Vienna, Va.; and Stout Causey Consulting of Hunt Valley.

Criteria in the selection process included revenue growth, profitability, human resources and staff issues, management of resources and rewards to owners.

So what's the secret of their success? The managing partners from each of the honored firms recently offered their views on the biggest issues they face and the greatest factors in their firms' success.

What are the three most important factors for successfully managing your firm?

Lisa Cines, Aronson & Co.:

Accounting firms that want to achieve greater success in a competitive marketplace must begin running their firm like a business. You offer a product that has to be marketed and nurtured, as opposed to just "being available." Accounting firms have traditionally been run with a more narrow focus, concentrating on the services themselves rather than looking at the big picture and sharing with the market how your services solve your clients' pains.

Many firms face problems when they try to branch out into different markets or industries without having the proper infrastructure in place, including experienced personnel. By instead focusing on your proven strengths and loyal clients, you increase your opportunity for financial success.

Most important, recognize the power of developing great leaders. Treat your staff with respect and have confidence in their ability to exhibit leadership qualities in every aspect of their work. The career opportunities for skilled accounting professionals are plentiful, so it is critical that firms are continuously evaluating and addressing their employees' needs.

R. Edwin Offterdinger, Beers & Cutler:

Establish a culture of accountability to the firm and to each other. As managing partner, you need to be responsible for holding everyone accountable.

Know the core values of the organization and celebrate them. Know who you are as an organization and work to execute them in everything you do. One of our core values is "focus." We can't be all things to all people, but we can focus on what we do best and really excel at those things.

Surround yourself with great people who know their specialties — marketing, human resources, recruiting, technology, etc. We CPAs tend to think we have to do it all. We are better off focused on serving clients and developing great accountants and consultants.

Kenneth E. Baggett, Reznick Group:

Develop quality leadership at all levels.
Maintain the same culture in a multi-office firm.
Create accountability throughout the firm for client service, high-quality standards, development of staff and appropriate financials results.

Thomas E. Stout, Stout Causey Consulting:

One, treat staff like partners and partners like staff.

Two, have clients do backflips over the services you provide to them.

And three, choose the right niches and add new services frequently. (For Stout Causey, those niches include internal control consulting for Fortune 500 companies like Microsoft, Sun Microsystems, General Motors, Dow Chemical, Southwest Airlines and AOL.)

What are the most important issues facing your firm today?

Lisa Cines, Aronson & Co.:

Recruiting and retention are hot topics across the industry. At Aronson & Company, we are relentlessly pursuing ways to balance the firm's best interest while meeting our employees' needs — just like we do for our clients. And, of course, as with any accounting firm in today's volatile legislative environment, it is imperative that we keep up with changes in standards and regulations across the industry groups we service.

R. Edwin Offterdinger, Beers & Cutler:

Staff shortages. The metropolitan Washington economy is growing rapidly. As a large, non-national firm, we are capable of serving large and small clients. Many excellent companies are leaving the national firms and choosing us. Our revenue opportunities exceed the headcount growth. We need to be careful with client acceptance. We need to be creative with staff retention programs. We need to attract new staff through different methods.

Kenneth E. Baggett, Reznick Group:

Continuing to development leadership to keep pace with our growth. We have created various leadership training initiatives; one in particular is what we call "Leadership Boot Camp," which will include 15 of our future leaders involved in an intensive three-and-a-half-day program to help them develop their leadership skills. This program will include year-round progress oversight.

Thomas E. Stout, Stout Causey Consulting:

Probably the most important issue is recruiting the most motivated and talented staff. How do we do it? One, we have a very successful internal referral program. If someone is here, doing well and enjoying what they're doing, they'll recruit their friends and former colleagues to our firm. We highly encourage that. I would say about two-thirds of our hires come from internal referrals.

We're also nurturing relationships with top universities. We recruit at Penn State, University of Delaware, University of Maryland, Towson, Villa Julie (and) Loyola. And we do a lot with (these universities). We sponsor programs, we do a lot with the kids, we invite many of the schools to our offices for a cookout in the spring. We put a lot of time and effort into that, and it's paying off.

What are the most important issues facing the CPA profession? How should CPAs address these issues?

Lisa Cines, Aronson & Co.:

Legislative and regulatory changes for the accounting industry will likely be a huge focus in coming years. In the wake of high-profile accounting and auditing disasters in the news, competent and responsible firms will be working to create positive changes within the field. To achieve these changes, it is critical that firms band together to solve problems and enable this transformation rather than attacking each other and fueling competitive fire.

Firms would also be well-advised to begin working more closely with colleges and universities to encourage more people to join the profession, and to develop training programs for professionals who chose other paths first but want to make a career change.

R. Edwin Offterdinger, Beers & Cutler:

I believe the top issue is availability of accountants. We can address this through overall attraction programs at the AICPA and state-society level. We need to get the word out that this is a great profession. We also should support alternative work arrangements to keep more people active in the profession and eliminate the "up-or-out" mentality; be creative with outsourcing opportunities globally; and make the work environment better. The brutal busy season needs to be a thing of the past.

Kenneth E. Baggett, Reznick Group:

I think the biggest issue is the shortage of quality staff to meet the needs as the profession grows and is asked to do more to ensure the confidence of the investor community. The profession needs to continue to reach out to the great students currently on college campuses to recruit them to accounting, and to those who left public accounting to recruit them back. One idea is to keep up with your alumni, which we do with a formal alumni party each year.

Thomas E. Stout, Stout Causey Consulting:

I would say the biggest issue facing the profession is what we refer to as "cascading" Sarbanes-Oxley rules. That's going to impact firms beyond the ones that are serving public companies. It means that CPAs need to position their firms to provide consulting services that the auditor either is prohibited from doing or is unlikely to get because they require board approval. There's a tremendous number of consulting services the financial statement auditor used to perform for these companies that they really are not able to perform now. That's how our firm grows. We don't audit any public companies' financial statements, but we serve the largest public companies in the world, and we're doing it not only here in the U.S. but globally. We have people in Tokyo, Australia, Brazil, the Netherlands, Ireland, Singapore. So there are tremendous opportunities. But you have to have the right niches.

We do audit the financial statements of middle-market companies. Let's say we're doing the audit of a $200 million company and we also do their tax work and we help them with their ERP system or their financial analytic system. If Maryland had a rule similar to Sarbanes-Oxley, we would be prohibited from doing that systems-related consulting for them, and we may be prohibited from doing a lot of the tax work. We would be facing the same issues as the Big Four. What we would probably do is spin off our consulting business so that it was no longer an issue for us — like all the Big Four have. In our firm it wouldn't be that big of a deal, but I think in most firms it would be a huge deal, because their individual partners may be doing it all, as opposed to being specialists.

Contact this Author: < William Sheridan > bill@macpa.org

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