Investing and Taxes

The E-Myth Accountant Series – Management

CPA Blog |

The third topic in the book “The E-Myth Accountant: Why Most Accounting Practices Don’t Work And What To Do About It” by Michael Gerber and M. Darren Root, CPA is all about management.

Michael Gerber shares when it comes to dealing with management of accounting firms, there are two main problems. First, the accountant usually abdicates responsibility for management by hiring an office manager. 

Thus, the accountant is working hand and glove with someone who is supposed to do the managing. But the accountant is unmanageable himself!

The accountant doesn’t think like a manager because he doesn’t think he is a manager. He’s an accountant! He rules the roost. And so he gets the office manager to take care of things like scheduling appointments, keeping his calendar, collecting receivables, hiring and firing, and much more. 

Second, no matter who does the managing, that person usually has a completely dysfunctional idea of what it means to manage. They are trying to manage people, contrary to what is needed.

What he shares is that rather than managing people, management is really all about managing a process, a step-by-step way of doing things, which, combined with other processes, becomes a system.  Instead of managing people, then, the truly effective manager has been taught a system for managing a process through which people get things done.

What he recommends is that great managers constantly ask key questions:

  • What is the result we intend to produce?
  • Are we producing that result every single time? 
  • If we’re not producing that result every single time, why not?
  • If we are producing that result every single time, how could we produce even better results?
  • Do we lack a system?
  • If so, what would that system look like if we were to create it?
  • If we have a system, why aren’t we using it?

Michael Gerber explains that in a truly effective company, how you manage is always more important than who manages. Provided a system is in place, how you manage is transferable, whereas who manages isn’t. How you manage can be taught, whereas who manages can’t be.

In addition, co-author, M. Darren Root, CPA shares that a well-run office also tends to attract highly qualified job candidates, providing you with a better pool of prospects. In the end, a systemized business is better equipped to retain and attract good people and to repel those who are not a good fit.

He shares that in his experience, providing a uniform system created a sense of ease among his staff. Employees, no longer burdened with creating and maintaining their own processes, felt a sense of freedom because they were no longer solely responsible for a single duty. It also opened the door for cross-training, which his employees loved.

He shares that a study by the American Accounting Association, ‘‘Healthy Lifestyle as a Coping Mechanism for Role Stress in Public Accounting’’ (Jones, Norman, & Weir 2010), reported that the three main contributors to job burnout are role ambiguity, role conflict, and role overload. Putting standard processes in place alleviates ambiguity of roles and conflict caused from overlapping tasks.

If you want a better firm, you have a structured process for every task or service in your firm.  Manage the process and you’ll easily manage the people.

Source – “The E-Myth Accountant”