AICPA/PCPS Update: Top Issues for Firms
Jason Deshayes, CPA
Robert F. Butler CPA, P.C.
PCPS: Understanding the Issues
Practical solutions to help your practice
RUN SMOOTHER.
 What issues keep practitioners up at night?
 What issues are shaping the future of the profession?
 What are the priorities?
 What are the opportunities?
 What are the solutions to the challenges?
Private Companies Practice Section
2009 PCPS CPA Firm Top Issues
Private Companies Practice Section
2011 PCPS CPA Firm Top Issues
Private Companies Practice Section
PCPS CPA Firm Top Issues
Bottom Line
 Keeping up with tax laws and accounting standards,

retention & growth, fee pressure and seasonality top
the 2011 lists
Slight shift in focus from client retention to client
acquisition between 2009 and 2011
 Human capital no longer the top issue — but still an

issue — which is a temporary shift
Firms with five professionals or fewer are less
focused on succession, yet the most vulnerable
Private Companies Practice Section
Keeping Up With
A&A Standards
Private Companies Practice Section
Keeping Up With A&A Standards
— TIC Alert
 PCPS Technical Issues Committee (TIC) Alert
 The TIC monitors technical developments that could significantly

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affect private companies and the firms that serve them
When standards are written, the TIC submits informed comments
and recommendations in support of small-to-medium-size firms
Stay abreast of TIC activities
Private Companies Practice Section
Keeping Up With A&A Standards
 Technical Toolkits
 Clarified Auditing Standards

(effective December 15,
2012!)
SSARS 19 Toolkit
Private Companies Practice Section
Keeping Up With A&A Standards — Clarified
Auditing Standards Toolkit
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Available at aicpa.org/pcps/castoolkit
Private Companies Practice Section
Keeping Up With A&A Standards —
PEEC/ARSC Changes to Compilation
Standards
 Changes definition of
a compilation to “read
and report”
 Changes preparation
of financial statements
to a non-attest service
Private Companies Practice Section
Keeping Up With A&A Standards — Changes
to PEEC/ARSC Compilation Standards
 Resources available at: Interest Areas Financial Reporting Center - Compilation
Services
Private Companies Practice Section
Keeping Up With A&A Standards — New
Mandatory Firm Rotation Resources
 Talking points developed for practitioners to
use in discussing mandatory firm rotation
concerns
 aicpa.org/pcps/mfr
Private Companies Practice Section
Keeping Up With A&A Standards — Private
Company Financial Reporting
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Private Company Council
Financial Reporting
Framework for SMEs
 Privately held small and
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
medium enterprises
Less complicated, less costly
U.S. GAAP financial
statements not needed
FAF supports as “important
and complementary”
Exposure Draft — October
2012
Private Companies Practice Section
aicpa.org/FRF-SMEs
Keeping Up With Changes
and Complexity of Tax
Laws
Private Companies Practice Section
Keeping Up With Changes and
Complexity of Tax Laws
 PCPS Health Care Reform Toolkit
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Strategy Checklist
Client brochures (Business and Individual)
Client PowerPoint template
All customizable
Private Companies Practice Section
Keeping Up With Changes and
Complexity of Tax Laws
 Fiscal Cliff — uncertainty in unresolved
tax issues aicpa.org/fiscalcliff
 AICPA’s Tax Section
 Total Tax Insights
totaltaxinsights.org
Private Companies Practice Section
Client Acquisition
and Retention
Private Companies Practice Section
Client Acquisition and Retention
Changing Landscape
Before
Transactional
$
Private Companies Practice Section
Today
Advisory
$$
Client Acquisition and Retention
 Move Up the Client Value Pyramid
More CPAs are becoming outsourced
CFOs for their business clients
Client Value Pyramid
Virtual CFO
Budget, business planning, business modeling,
etc..
Controllership Services
Monthly close, financial statements, cash
flow analysis
Transactional Services
Tax, write up, bookkeeping, A/P, payroll, etc..
Private Companies Practice Section
Client Acquisition and Retention
New Service Opportunities
 Attestation engagements — Statements of Control
(SOC) reports
 Consulting & advisory — Trusted Business
AdvisorSM
State and local tax (SALT) compliance

 Business process outsourcing — cloud computing
 Forensic Services
 Financial Services
Private Companies Practice Section
Client Acquisition and Retention
Trusted Business Advisor (TBA) 2.0 Workshop
and PCPS TBA Consulting Toolbox
 Make knowledgeable and confident
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presentations to clients
Demonstrate and price unique value
Ask the right questions to understand
client concerns and priorities
Use core skills and evolve as clients’
strategic partner
Build strong relationships and earn
clients’ trust
Private Companies Practice Section
Client Acquisition and Retention
YOU are the Value Online Video Workshop
 Differentiate yourself from other CPAs so you
can confidently present yourself to clients in a
unique way.
Private Companies Practice Section
Client Acquisition and Retention
Client Advisory Board Toolkit
Gain perspective
and hear directly
from clients about:
 Client
expectations
 How the firm can
improve
 How the firm can
cross-sell and add
to its service
offerings
Private Companies Practice Section
Client Acquisition and Retention
How CPAs Grow Their Practice
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Relationship — stronger bond with clients
Know your value and how to articulate it
Manage seasonal lows and revenue generation
Identify new services mix
Plan to make money
Private Companies Practice Section
Client Acquisition and Retention
PCPS Social Media Toolkit
Toolkit includes:
 Action Plan
 Guidance — what, why and how
 Sample policy, with policy writing
tips
 Guides for LinkedIn, Twitter and
Facebook
 Guide for blogging
Private Companies Practice Section
Client Acquisition and Retention
AICPA Tax Practitioner’s Toolkit – Communicate Your
Value
 Preparing Your Firm to Understand and Articulate the Value of
Your Tax Services
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Implementation checklist
CPAs vs. unlicensed tax preparers PowerPoint template
 Engaging With Clients to Stay Top of Mind

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Customizable client-facing brochures and PowerPoints
Tax blurbs for websites or newsletters
 Promoting Your Firm to Attract New Clients

Print ads, Google AdWords
Private Companies Practice Section
Fee Pressure &
Pricing of Services
Private Companies Practice Section
Fee Pressure & Pricing of Services
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Demonstrate and communicate value
Reinvent the engagement
 Step down service
 Push work back to client
Use retainers
 More and more firms are successful with retainers
Straight talk from the start
 Consider specific fee language in your engagement letter
 “The fee will not exceed $XXX”
 “This service will cost $XXX at a minimum”
Evaluate your clients … fire “D” clients
 Utilize the Client Evaluation Tool
Bill timely and demonstrate the value delivered
Private Companies Practice Section
Fee Pressure & Pricing of Services
Private Companies Practice Section
Human Capital
Private Companies Practice Section
Human Capital
PCPS Human Capital Resource Center
Tools for Human Capital Concerns:
Partner Accountability
and Unity
Finding Qualified Staff
Retaining Qualified
Staff
• Partner Accountability
and Unity Guide
• Team Recruitment
Action Plan
• Firm Competency
Model
• Leadership Attributes
Assessment
• Sample Recruitment
Advertisement
• Exit interview
template
• Governance grid
sample
• Firm Needs
Assessment
• New hire checklists
and agendas
• Interview questions
• Mentoring guide
• Value proposition for
joining firm
• Performance
management
templates
Private Companies Practice Section
Human Capital
PCPS Human Capital Resource Center
 Highlighted tool – CPA Firm Competency Model
Private Companies Practice Section
Human Capital
PCPS Human Capital Resource Center

Highlighted resource – PCPS Human Capital Center Toolbox Series
Private Companies Practice Section
Succession Planning
Private Companies Practice Section
2012 PCPS Succession Survey
MultiOwner
Firms
www.aicpa.org/pcps
Private Companies Practice Section
Sole
Owners
54% without
written plan
94% without
Practice Cont.
Agreement
Leadership
development
tops challenges
39% intend to
merge or sell
44% of firms
in M&A talks
Half expect to
sell $1 for $1 of
billings, actual
is likely much
less
Few managing
partners have
ability to hold
partners
accountable
PCPS Succession Survey
2012 PCPS Succession Survey (Multi-Owner Firms)
Private Companies Practice Section
PCPS Succession Survey
2012 PCPS Succession Survey (Sole Owners)
Private Companies Practice Section
PCPS Succession Survey
Recently
Updated!
Private Companies Practice Section
Succession Planning — Best Practices
Sole Owners
• 3-year written plan
• Identify exit strategies
• Practice continuation agreement
• Evaluate rates/clients
• Leverage technology
Multi-owner
Firms
• 3-year written plan
• Improve operating policies and procedures
• Develop people
• Strong governance with robust compensation
framework
• Define rules for retiring partners
Private Companies Practice Section
Firms Today
Private Companies Practice Section
Firms Today
2012 PCPS/TSCPA National MAP Survey

Covers key practice management issues
and enables firms to:
 Benchmark management policies and
financial results
 Gain strategic insights and guidance
aicpa.org/pcps/MAP2012
Private Companies Practice Section
The National MAP Survey’s rich history
makes it the leading benchmarking
survey for CPA firms. See how your firm
measures up using targeted and relevant
practice management benchmarks
including billing rates, chargeability ratios,
compensation and other key performance
indicators.
Firms Today
2012 PCPS/TSCPA National MAP Survey
 Firms are recovering
 Not quite back to 2008 levels, but better than 2010

A majority of firms experienced year-over-year revenue
growth in 2012

Partner compensation is on the rise after the
belt-tightening of the downturn

Indications that larger firms are adding new partners for
retention and in anticipation of retirements
Private Companies Practice Section
Firms Today
2012 PCPS/TSCPA National MAP Survey
Private Companies Practice Section
Firms Today
2012 PCPS/TSCPA National MAP Survey
Private Companies Practice Section
Firms Today
2012 PCPS/TSCPA National MAP Survey
What’s Next?

Download the results at
aicpa.org/pcps/maps2012

Use the comparative data to pinpoint differences
that are of greatest concern to your practice

Compare your firm’s figures
 What stands out?
 What areas need focus for improvement?
 Implement changes
 Align with strategic plan
Private Companies Practice Section
Firms Today
What We are Seeing
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
Fee pressure

Staff turnover has returned — primarily to
industry

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Profitability — flat or up a little
Clients uncertain — sitting on cash — stuck in
neutral
Merger activity increasing — horizontal
Private Companies Practice Section
Firms Today
What We are Seeing

Signs of recovery in certain areas and growth in some
industries

Firm rotation — issue with NFPs and government
entities

Identify theft for IRS refunds is epidemic

Technology — cloud, security, privacy
What are you experiencing?
Private Companies Practice Section
PCPS Communities
Sole Practitioner’s
Virtual Network
Human Capital
Networking Group
Emerging
Partner Forum
Women in the
Profession
Small Firm
Networking Group
TBA Alumni
Medium Firm
Networking Group
Private Companies Practice Section
Large Firm
Networking Group
Thank You!
Please Contact Us!
aicpa.org/PCPS
pcps@aicpa.org
800.CPA.FIRM
nschamberger@aicpa.org
jason@butlercpa.com
Private Companies Practice Section
Questions?
Private Companies Practice Section