pay & compensation

cpa firm compensation plans and the law of unintended consequences

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“unintended,” maybe. but not altogether unforeseeable.

with a new generation of cpas taking over as managing partners comes a host of new questions and issues. marc rosenberg addresses some of the concerns in compensation issues for the new managing partner, which inspires gary zeune, managing director at the pros & the cons llc, to weigh in on the kind of comp issues that he sees all too often as a fraud-fighter.

zeune comments:

gary zeune
gary zeune

don’t tell anyone but the problem with cpa firms is they’re run by accountants who don’t understand the unintended consequences of decisions.

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accounting industry adds 500 jobs

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marks 16 months annualized expansion. but cpa firms are a different story.

accounting and bookkeeping services, all employees in thousands, thru july 2012

the accounting and bookkeeping industry, which includes cpa firms and payroll agencies, added a statistically meaningless 500 jobs in july, according to new data sourced by 卡塔尔世界杯常规比赛时间. july ended with 953,200 fte’s, up from june’s 952,700.

but it’s in the year-over-year gains where the trend is more clear. and the story at cpa firms is much different.

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20 decisions for your firm’s new partner compensation committee

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partners need to be something more than production machines. [checklist included.]

by marc rosenberg, cpa

increasingly, cpa firms are adopting the compensation committee system for allocating partner income.  firms are finding that systems such as formulas, pay based on ownership percentage or pay-equal no longer work.  when we compare the usage of the compensation committee today to 5 years ago, the increase in usage ranges from 16% to 26%.

if there is one overarching cause for this significant trend, it’s that firms are understanding that their partners need to be something more than production machines.  in addition to bringing in business, managing a client base and working billable hours (all of which continue to be important values in a compensation committee), partners need to excel in intangible areas such as helping staff grow and develop, developing specialized expertise and teamwork.  the compensation committee is one of the best systems available to cpa firms to allocate income based on this diverse array of performance criteria.

more marc rosenberg practice management trends and guidance: three ways to break partner gridlock in an accounting firm  | what partners are entitled to, and what they’re not entitled to | how to make partner?  |  why accounting firm partners are “popping prozac like m&m’s”  |  the 15-item checklist for your next partner retreat |  five key responsibilities for a new partner  |  planning a partner retreat for real results  |  6 steps to get your business to the next level  |  the 10 biggest mistakes in reading map statistics  |  re-engineering partner accountability  |  marc rosenberg: why cpas aren’t making more money [video]  |  marc rosenberg: slow learners need not apply  |  10 to-do’s for a partner buyout

when firms begin operating their new compensation committees, there is a lot of initial confusion and bewilderment about how to get started.  for example: read more →