CPA Practice Advisor

AUG 2013

Today's Technology for Tomorrow's Firm.

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VOLUME 23, NUMBER 8 MY PERSPECTIVE By M. Darren Root, CPA.CITP, Executive Editor 800-547-7377 • www.CPAPracticeAdvisor.com Publisher: Jim Baker Executive Editor: M. Darren Root, CPA.CITP Editor: Isaac M. O'Bannon Technology Editor: Brian Tankersley, CPA.CITP Managing Editor: Jill Burnett Associate Editor: Taija Jenkins Columnists: David McClure Doug Sleeter Jim Boomer, CPA.CITP Kristy Short Michelle Golden Randy Johnston Rene Lacerte Roman H. Kepczyk, CPA.CITP Art Director: Rhonda Cousin National Sales Manager: Barry Strobel Site Manager: Brittney Klaas Media Production Representative: Barb Evenson Audience Development Manager: Angela Kelty Editorial Advisory Board: Bob Cedergren, CPA.CITP, CISA, CISM, CISSP, CGEIT Chris Fraser, CPA.CITP, CISA, MCP Jason Lawhorn, CPA.CITP Gary A. Masino, CPA Ryan McCowan, CPA.CITP Linda O'Neal Troy Patton, CPA David Primes, CPA.CITP Donny Shimamoto, CPA.CITP Doug Sleeter Sandra L. Wiley CYGNUS BUSINESS MEDIA CEO: John French CFO: Paul Bonaiuto VP, Human Resources: Ed Wood VP, Audience Development: Julie Nachtigal VP, Technology: Eric Kammerzelt CYGNUS PUBLISHING Executive Vice President: Gloria Cosby Vice President of Production Operations: Curt Pordes For reprints and licensing please contact Nick Iademarco at Wright's Media 877-652-5295 ext. 102 or niademarco@wrightsmedia.com. The opinions given by contributing authors are their own and are not the opinions of our staff. All trademarks used are the property of their respective owner. — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — Practice Advisor, (ISSN #2160-8725 (print), ISSN #2160-8733 (digital); USPS #017-576) is published eight times a year (April/May, June, July, August, September, October, November and December) by Cygnus Business Media, Inc., incorporating two editions known as CPA Practice Advisor and NSA Practice Advisor, 1233 Janesville Avenue, Fort Atkinson, Wisconsin 53538. Periodicals postage paid at Fort Atkinson, WI 53538 and at additional mailing offces. Printed in the U.S.A. Send all subscription inquiries or change of address to: Practice Advisor, PO Box 3258, Northbrook, IL 60065-3258. Phone: (877) 382-9187 (toll free); 847-559-7598 (local) Fax: (847) 564-9453 Email: Circ.CPA@omeda.com Subscription Rates: The basic annual rate is $3, based on qualifying associations of 10,000 or more public accountants that may also subscribe for all their public accountant members (certain restrictive covenants apply) for a basic subscription rate of $9 per member for a three-year subscription. One year subscription for all others: USA - $48; CAN $70 GST; INT'L $99 GST #131910168. POSTMASTER, please send address changes to: Practice Advisor, P.O. Box 3258, Northbrook, IL 60065-3258. Canadian address changes to: Canada Post PM40612608. Return Undeliverable Canadian Addresses to: Practice Advisor, PO Box 25542, London, ON N6C 6B2. Five Core Principles to Work By… A s many of you know, I co-authored a book a few years ago with acclaimed author Michael Gerber titled The E -Myth A ccountant – W hy Most Accounting Practices Don't Work and What to Do About It. Tis proved to be a great experience for me. Fi rst a nd foremost, just t he opportunity to get to know and work with someone whose work I had admired for so long was an honor. Afer all, it was Michael's original E-Myth book that inspired me to change my accounting practice so many years ago, and it continues to inspire me today. Michael has done some really good work helping small business owners realize greater potential from their businesses—and accounting frms are no diferent. I was recently reviewing some of the material from the E-Myth Accountant for a presentation I'm giving in the coming weeks. I feel like I had my own litle refresher course, and I believe the concepts that I reviewed are worth mentioning to all of you as well. Tere are fve core principles of the E-Myth, and they go like this: • LIFE — Your business should be a way to get more of what you want out of life… "a vehicle through which you gain personal and fnancial freedom." • LEADERSHIP — In order to lead your business into the future, you must have a clear and compelling vision that inspires you and your staf. • WORKING "ON" IT, NOT "IN" IT — Working "on" your business means building it as a franchise prototype, even if you never plan on franchising. • SYSTEMIZATION — If you want to create a business that provides you with a high-equity return, you need to create a proprietary system. • BUSINESS DEVELOPMENT — Tis is the secret to realizing your vision… the methodology behind working on your business, and not just in it. It's a continuous cycle of innovation, quantifcation and orchestration. I speak with so many accounting firm practitioners, partners and owners throughout the year and I often hear a lot of frustration because they tell me that that their business is overwhelming. Tis always leads me to think of Gerber's #1 principle—Life. I try and explain that the business is a vehicle, a tool, through which we gain personal and f i na nc ia l f reedom . I f it 's overwhelming, then you are doing something wrong and it's time to reevaluate your entire operation. So I ask you: Do you see your business as a vehicle through which you a re ga i n i ng persona l a nd fnancial freedom? If the answer is "No" or "I don't know," it's time for change. With this in mind, I want to share an exercise that I put myself through periodically, which is to stand back from the daily operations of my frm and really look at what is going on. Ten, I ask myself: Am I really in control of my business or is it controlling me? From there I revisit my frm's vision to ensure I've not goten off track. Firm leaders need to go through this same exercise. If the business is in control, then you are most certainly not meeting the core principle of Life. Keep in mind that just because something has always been done a certain way, doesn't mean it's the right way…especially if it's barring you from gaining personal and fnancial freedom! Darren is the Executive Editor of CPA Practice Advisor. He remains in public practice as the principal of Root & Associates, LLC, in Bloomington, Indiana, and is president of his consulting practice, RootWorks. He formerly served on the Board of the AICPA's CITP Credentials Commitee and is a former member of the Board of Directors for the Indiana CPA Society. He speaks at dozens of professional organizations each year and fequently serves as a guest lecturer at Indiana University's Kelley School of Business. August 2013 • www.CPAPracticeAdvisor.com 3

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