MSCPA SMALL FIRM NETWORKING ROUNDTABLE
Springfield, Missouri ♦ November 20, 2009
Meeting Notes
These notes summarize comments from the roundtable and do not necessarily reflect consensus or best practices.
Payroll Practice
 Some firms offer payroll services only because their clients request it, so that only one company
handles their payroll function and their accounting needs. If having payroll service through their
accounting firm is important to clients, they might be willing to pay a premium for it. Firms that
offer payroll typically aren’t trying to compete with larger payroll companies; they charge higher
rates in order to offer the function as a service to clients. Using this approach, some firms have
found a way to make payroll profitable.
 Because many employees dislike payroll work, it helps to have staff members whose job focus is
payroll, rather than making other staff members do payroll work as a secondary job duty.
 Some firms auto-draft the fees from the client’s account as payroll is processed. Those who do
offer payroll tend to charge a fixed fee based on the number of checks, or a fixed fee plus an
additional charge per check.
 Most firms get some payroll business from existing clients, but do not get other accounting
business from payroll clients.
Technology Update
 Practitioners are starting to use social technologies (Facebook, Twitter, LinkedIn), but have not
yet found a way to make it profitable. Some were concerned about their staff using these tools
during work time, particularly the hourly employees.
 There was discussion as to whether having a website brings in clients; several did not think so.
 Virtual office setups bring peace of mind and the convenience of automatic data backup. Many
present use client portals.
 Smart phones are helpful but CPAs need to take security measures before accessing client files
or contact information on them.
 Password-protected thumb drives are available.
 GoToOffice is a file server, application server and VPN designed for PC support services;
however, practitioners have found this to be a useful tool in providing accounting support to
clients. The site is accessed at fastsupport.com. It is secure, and clients have to allow the CPA
access each time. Cost for this service can start at approximately $400 a year.
 External hosting of QuickBooks (such as through Right Connect or Intuit) can be expensive but
convenient. This service automatically updates the version of QuickBooks your clients are using,
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which is helpful since some practitioners have trouble convincing clients to upgrade to newer
versions.
Other observations on new technological tools: convertible tablet PCs worked very well until
Vista came along; netbooks are not a powerful tool; Adobe Standard can work well for marking
client files; Microsoft Action Pack is helpful and inexpensive; Windows 7 seems to work well at
first glance; QuickBooks Remote Access works better than QuickBooks Online; and Live Scribe
offers note-taking capacity, software applications, and audio recording features.
Client Service and Preparing for the Economic Upturn
 Firm leaders are continually evaluating how to market other services to existing clients. There
are three steps to this process:
1. Look at what your firm can do.
2. Look at what your clients need.
3. See if you can fill in any gaps.
 There are four combinations of marketing your business: market an old service to old clients;
market a new service to old clients; market an old service to new clients; and market a new
service to new clients. The last on this list is typically the riskiest and most expensive way of
expanding your business.
 One area that some leaders were curious about was eldercare issues, but practitioners have not
found a way to make this a strong business niche.
 For all types of marketing, practitioners strive to be proactive, but often more immediate issues
take precedence and marketing strategy gets pushed to the back burner.
 It can be helpful to hire ahead so that when new business opportunities arise, the firm has the
excess capacity to handle them.
 Cross training is critical; there should never be only one person in the firm who knows how to do
something. Some firms make sure each client has one primary client contact and one backup
contact to ensure continuity if there are staffing changes.
 What message do you send to your clients about new business? The worst things a CPA can
hear from a client are “I didn’t know you did X” or “Are you taking new business?” If someone
asks if you are busy, never say yes; say you will always take on more business.
 It’s okay to try something new then retreat if you can’t do it well. Just make sure to set the
client up with someone else when you do retreat.
 If you double your fees, you might lose half of your clients, but you’d still be making the same
amount of money and you would have more time.
 Another approach is to always say you can provide a service to clients when they ask, and just
outsource the services you are not good at or capable of performing; in this way, you would act
like a general contractor for accounting and financial services.
 One service some firms offer is audit protection. The firm offers an optional extra fee (around
15-20% of the tax return fee) so that if they get audited, there is no fee from the firm to do the
work, up to the appeals level. One firm leader estimated that two percent of clients get audited,
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but 45 percent of clients pay for audit protection. Several firms automatically include corporate
audit protection in their billing, but give clients the option to opt out.
Instead of hourly billing, firms can consider value billing. Many CPAs feel that they are not
worth what they are charging, but clients disagree. It’s important to remember that a service is
not worth the value you put on it, but rather the value the client places on it. Clients tend not to
put much value on tax returns, but they place a high value on your help in dealing with the IRS.
One firm leader sits down with clients after complicated projects, and proposes a charge.
Almost always, the client does not mind the charge because they feel that the work the firm did
was worth it.
It is always important to track how much clients are costing versus how much you are charging
them. If you cut the client a break, make sure their bill reflects that break. Many practitioners
record short phone calls but don’t bill for those calls unless it becomes a habit with a client.
Tax Season Service
 Most firms have their clients come in to pick up their returns, and they collect payment
simultaneously. One firm simply mails their returns with a bill because it saves a great deal of
staff time, and most people send payment without trouble.
 Many firm leaders use the time when the clients pick up their returns as an opportunity to sell
other services.
 One firm sends out pre-scheduled interview appointment times out to clients. Clients can call
and change the time assigned to them, but this allows the firm to schedule almost all of their
interviews by the end of February, and get 90 percent of tax returns in the office by the first
week of March.
 In one firm, the practitioner completes the tax return while the client is sitting with him during
the interview. Many practitioners preferred not to enter data in front of the client, and they felt
as though the clients may question the fee if it appears that the hour-long interview is the only
instance when time is spent on their returns.
 It helps to track the amount of time each interview takes so that you know how long to expect
for next year. Typically, if a return is complex one year, it is complex again the next.
Miscellaneous Ideas
 Most practitioners have non-solicitation or non-compete agreements with employees, but not
actual employment contracts. One practitioner has a recruitment fee included in engagement
letters, to recoup recruiting and training costs if an employee gets hired away by the client.
 In terms of finding new business, banks are good referral sources because they appreciate
quality financial statements. It can be helpful to establish a relationship with 3-4 area banks
that will send referrals. CPAs like to feed each other business based on specialties; this can
especially be true of sole practitioners who look for quality firms to send business to when the
practitioner cannot handle a certain client’s needs. Some firms send a letter to new firms
mentioned in the local business journal, and it is always a good idea to drop a note to someone
you know who is recognized in the news for an achievement.