All posts in FPA

Gen Y & Fashion

by cfarmand on August 19, 2010 in FPA, Trash the Timesheet with 2 Comments

Evolution of the Hipster

Somehow, there was a request for me to blog about Gen Y clothing at the workplace … maybe?  Or Gen Y fashion in general? If you want to check out a Store for all Mr Beast fans, you can check it out here!
At first, it seemed a bizarre request, but the more I think about it, the more I can proclaim, “The clothing is a part of the culture.” Flip-flops in hand bags waiting for 5 pm, tattoos flown at full mast, cleavage accepted most places VISA is. It’s the culture.

Between Friday and Monday mornings my razor stays neatly packed away in the commode. However, my father, Mr. Boomer, will shave at a minimum once a day (twice if there is an event he is attending). For me, the weekend summons my well worn Chacos, Old Navy shorts, and worn-out golf shits. The big man? Wouldn’t catch him wearing shorts in public on a 110-degree, saucy Florida day.  It’s the culture.

How Gen Y fashion translates into the workplace is tricky. Each office is different. I remember just six years ago when I started here, two of the associates were still wearing ties every day.  When the partners dropped the ties, so did the associates, unless we were out on an audit. How lawyers still suit up every day, I don’t know, but I believe change is coming for them. In the past six years, our unspoken dress code has become slacks and a button-down shirt. I have larger flags to fly than the clothes on my back. If the office is sparse on a Friday, I may rebel and wear jeans.

Trending forward:

As I begin to work with clients with whom I want to work (Gen Y), I find that they are showing up to my office in shorts and cleavage. While neither of those bother me, I have not found the inner HIPSTER within me to let go and dress down. For those confused on what hipster fashion is, refer to my picture. It may or may not happen, but I can promise you, the topic does not keep me up at night. I feel the fashion expression is important to late Gen Y-ers and early Z-ers. I do believe as accounting becomes one of the only professions with job stability, we are going to encounter bright HIPSTERS who can bring something unique to the industry.

(Thinking on paper) I can’t remember the last time a client commented on my Van Hausen button down. I may reconsider my fashion options as I embark on my journey. (Thinking over)

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Lesson Learned

by cfarmand on July 29, 2010 in FPA, Trash the Timesheet with 7 Comments
I had the opportunity to bid a on what I call a large client.  The referral was given to me by a member of my sphere of influence.  I met with the client and quickly understood what his successes, failures, challenges, and expectations were.  Here are some buzz words/phrases I remember from the initial meeting:

  • board does not accept extensions
  • bills coming in 8 months late
  • unexplained charges
  • unresponsive CPA
  • changing personnel
  • unhappy
  • complacent

So I return to my office and prepare a proposal for this client.  The engagement called for nine form 990, three form 1120S, one form 1065, and three form 1040.  I submit my proposal and it was denied in less than 24 hours.  When I requested feedback, here are some buzz words/phrases I remember:

  • Thankful
  • Thorough
  • Cost
  • Fixed Price Agreements are not original
  • more and more CPA are moving away from billable hour
  • time tracking along with fixed price agreements are the way to go
  • other proposals are less than my current CPA
  • my proposal was 4 times my competitor
  • my firm is not aligned with the local industry

My wife always reminds me that all things happen for a reason, and I truly believe that.  The lesson here for me is: if I knew that cost was the number one factor, above the poor service, for changing CPA’s, I would have never pursued this client past the initial meeting.   Great lesson for me.

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The Billable Death Spiral

by cfarmand on July 22, 2010 in FPA, Trash the Timesheet with 2 Comments
As I have mentioned in the past, I believe timesheets are nothing more than an illusion of control that partners think they have over their staff. In reality, it is the partner who is the slave to the timesheet. When customer Jim gets upset at the lack of service and decides to leave, who replaces the lost billable hours? Some options:

  • New Business? Maybe, but if customer Jim was not getting the service, customer Jane probably will not.
  • Innovative revenue streams? Maybe, but probably not. A firm obsessed with the billable hour are rarely innovative. Firms obsessed with the billable hour are interested in one thing: billing hours.
  • Current clients? Ahhh, now we are getting somewhere. Yes, I am saying that lost business is made up with over-billing existing clients.

This is where it gets interesting and the phrase billable death spiral comes in. As a partner begins to compensate for lost business by over-billing existing clients, a billable death spiral forms. Clients recognize an increase in fees, they don’t see a change in service or value, and they decide to leave. One by one they go, until the partner is left with a small handful of clients, who will pay whatever, just because they understood that time is money. Beware: the billable death spiral is a nasty process and usually renders the partner cold, pissed off and alone. This raises the question: in the office, who is really in control?

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Trashing the Timesheet: How I did it (part 2)

by cfarmand on April 23, 2010 in FPA, Trash the Timesheet with No comments
I would like to start this post with a thanks to the following individuals: Mark Bailey, Vic Christopher, and Chris York.

So you’re wondering how I did it. How I convinced a partner who had been tracking his time for 35 years to never fill out a timesheet again. Or more appropriately, how I freed myself from the bondage of the timesheet. It started with a changed belief system. This was not hard for me, because I did not believe in what I did not understand. Once I convinced myself that I was going to do it, I began searching for early adopters. I came across a gentleman by the name of Mark Bailey out of Reno, Nevada. Mark was mentioned on the verasage site, which happens to be the website of the author of Firm of the Future. I emailed Mark, we scheduled a phone call, and during that call he spent 45 minutes talking about his firm which uses no timesheets. (SIDENOTE: I knew nothing about this man before our call, other than his firm was the two-time winner of “Best firm to work for in the US” in the small firm category (15-24 employees) and he was old enough to be my dad. That is cool). After our call, I had hope that this could possibly work. One of the theories which spun off my talk with Mark was the core purpose of the timesheet. I concluded that the timesheet is nothing more than an illusion of control that partners — in traditional firm vs. firm of the future — think they have over their employees. By illusion, I mean their sole purpose is to keep tabs on making sure the employee stays busy. Partners think they are using them as a metric, when I am 98% confident that the partner knows exactly what they are going to bill for an engagement before they ever start it. I could rant on and on about the level of BS the timesheet is based on, but this post is to talk about “how I did it.”  Contact me if you want the rant.

Next step in the process was to begin collecting data and literature on what is called a Fixed Price Agreement (FPA). Our FPA details what we are going to charge for an engagement. It lists the client’s expectations of the engagement and the corresponding price we will charge for the service. Of course we have a separate engagement letter which accompanies the FPA. I have attached a copy of one of our sample FPA letters to the end of this post. My dad and I took a couple of months to work out the wording we wanted to use.

My biggest fear in the switch was client reaction. “WHAT WAS THE CLIENT GOING TO SAY????????” The fear was mildly valid because most my dad’s clients have been doing it the same way for the past 35 years. My mentors in this process assured me that the clients who ran from this would be doing me a favor. So to ease the shock factor, we issued a written statement to all of our clients explaining what we were going to be doing and attached a sample FPA to the statement. Some clients signed the example and mailed it back, others called to praise the change, and some had no comment.

Lastly, we set the date to be January 1, 2010, as our starting point to CRUISE the timesheet. Come back in a week to read about “what it is like now.”

Disclaimer: This is a overview of what went into the transition from billable hour to FPAs. Please feel free to contact me to discuss my full experience and ask any questions.

Click here to view our sample FPA.

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Trashing the Timesheet: What it was like (part 1)

by cfarmand on April 16, 2010 in FPA, Trash the Timesheet with 1 Comment

After a careful study of Ron Bakers book Firm of the Future, on January 1, 2010, I trashed my timesheet. Well, there was a little more to it than just Ron’s book, but I can say with all honesty, the book was the inspiration. For the past six years, I have been so confused with this idea of keeping every six minutes of my work day accounted for. I did it, I did not understand it, and I despised it.  Billable, Billable, Billable; all we have to sell is our time, I would chant repeatedly over and over in my head in a methodical drill sergeant’s tone. My goal in this three-part submission is to share my expierence on what it was like using timesheets, how I did it, and what it was like without timesheets.

The billable days were filled with Monday morning WIP meetings.  Hmmmmmmmm, a WIP meeting consisted of my dad and I talking (screaming) about what, when, how much and where we were going to bill our clients. It took up most of the morning and always set a cheery tone for the entire week. Then we had to deal with a bill going out late, purposely dodging Monday morning WIP meetings and bitching clients. I began to question professional service work and wondered if I truly had the thick skin to deal with this for the rest of my career. One day, mid-2009, I was reading my Twitter account and there was a post from the JOA citing Ron Baker and the death of the billable hour. I watched the video; it didn’t make sense at the first sitting. The video challenged the billable hour formula versus value pricing. While it did not make sense, I knew I was not going to last in this profession repeating an action I did not understand. I ordered the book and began tearing though it.  DISCLAIMER: “Trashing the timesheet” is only a piece of the big puzzle. I quickly learned that it would take a giant overhaul of attitude, mind and faith for this to work. The more I read, the more it clicked. This led me to interview early adopters of the process and study the theory behind value pricing. All arrows were pointing up. Once I felt comfortable talking about the topic, I approached the partner (my dad) on this idea. To give you a little background on my dad, he and his brothers are celebrating their 35-year anniversary this year as a public accounting firm in Jacksonville, Fla. For the past 35 years, he has accounted for every six minutes of his work (you can imagine how our first conversation about changing this went). The more I approached him with substance, the more he listened. In late October 2009, during one of our conversations, he agreed as of January 1, 2010, we would no longer track our time. There was no turning back now. In my next post I will explain how I transitioned away from the timesheet to Fixed Price Agreements.

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