Trust: The New Metric For The Successful CPA Firm

Private or public, personal or professional, trust is the foundation of all relationships. Clients trust you with their financial lives and you trust your staff to hold up their end of the bargain to get your clients' work done right. Or do you? Of course you do, but then again you still thoroughly review their work right?

This year, we spoke to firms all across the country and many are reporting an unexpected increase in the time it took them to review returns. Some have blamed moving to new technologies. Others said that their seasonal staff were not as good as in previous years. And the rest of the firms cited a host of things like the Affordable Care Act, repair regs and sudden staff turnover. Whatever the reason, the results were the same: increased WIP, decreased realization and bigger bottlenecks at the review stage.

All about trust

Think about the review you would conduct of a tax return prepared by a professional you've worked with for six years. You know their quality of work. You know their strengths and the one or two places you may have to double-check. On the whole though, you can look forward to a value-added, top-side review of that return. Contrast that review with the one you would conduct for a two-year professional. Admittedly, there is a significant knowledge and expertise gap between the two. The bottom line, however, is that you would spend twice the time (maybe more) reviewing the return of that two year professional because you're not as familiar with the work product.

You don't trust it.

Not only will this review take longer, but with the extra scrutiny it will likely be a two-step review. The first review will be down in the weeds picking apart the technical or worse, the transpositions, spelling errors and sloppiness. After all that has been cleaned up you will finally do your top-side review – only you won't because there's no time. (There are 20 more returns to review and the deadline is looming.)

Tell the story

In order to build trust between reviewer and preparer, the reviewer needs to see what they are looking for – right away. Preparers need to tell the reviewer a story. Something like: "This is what I did, this is why, these are the conclusions and this is the impact to the client." This is a story that takes place in the work papers. If this story is not told, the review becomes tedious, time-consuming and unprofitable.

Now imagine again that review of the less experienced preparer's work. Only this time, imagine having the major items you need to see right in front of you. How much review time would be saved? How much time would be available for value added ideas?

Use the discipline of Lean Six Sigma to build a process your people can trust. Lean can help build tools your preparers can use to demonstrate to reviewers that they can trust the work and focus on value added planning ideas. Practitioners of Lean Six Sigma prize metrics and measurements.

You can't improve what you don't measure

Practitioners of Lean Six Sigma prize metrics and measurements. Now you know that you can measure "trust." The trust metric is in the WIP and realization of your reviewers. Focus on this metric. Enhance the trust and you'll enhance the profitability of your firm. Change your mindset.

Want to learn more about applying this technique of Lean Six Sigma to you CPA firm? Email LeanCPA to learn more ways to increase your firm’s productivity and client engagement.

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