Solo Accountant or a Partnership: Which is Best?

Some people enjoy working by themselves, others in a partnership

We all live with fear, but accountants have their own variety. I think back on my college years and the wondering about how my life and career would unfold. And I wanted—really wanted—to see the future, but could not. 

At twenty-one, I would have given a prince’s sum for a crystal ball. But even if the seer’s tool existed, I had no money. So I ventured out, hands extended in darkness, hoping things would go well. And why did I desire to know the future? To avoid mistakes. To lessen my fear. But mistakes—not crystal balls—are how you learn.

Through the years, my career evolved blandly, though with a few jerks and screams (I had a brain tumor; shortly after that, my son has born with cystic fibrosis). But, overall, my work life has unfolded—like most—day by day.

My First Job

In the early days of my first job, I realized how little I knew, though I had a masters degree in accounting. Like a new golfer, I felt—and looked—awkward. My college professors trained me well, but I was still a duffer. I muddled my way through the first year, little realizing how much I was learning—and not understanding my firm was doing me a favor. They were paying me to learn. (You only get this perspective—later—when you are an employer.)

Solo accountant

Picture from AdobeStock.co

One year into public accounting, the lights came on. I finally hit shots like a real accountant. I finally felt normal. I finally moved more naturally. But after three years in my junior role, another firm came calling, asking me to move. They offered more money and more opportunity, so I ventured out.

My Second Job

My second job was more of an apprenticeship. My boss mentored and trained me. He allowed me to assume responsibility. I think you could say this is where I came into my own. But even though I liked my boss, we had disagreements. He promised one thing but delivered another. I found myself doing most of the work with no movement to the promised position. My boss was a good man, but at age 68, it was obvious, he had no desire to retire (though that was the agreement).

So, I left with no job. (I know. Not smart, huh?) This was quite scary, especially when you have two children and a wife at home—in other words, no other income. What did I do? I hung my shingle. 

Solo Accountant

In those years, I had my greatest joys and fears. To go from nothing to something was like climbing a mountain. And I am not the adventuresome type. In the early days, there was no cash flow—and I mean none. I recall, like a scene from a Charles Dickens’ story, nights of soup and bread. And much of the time, I had this deep sense of fear. Nevertheless, I survived and—at times—even thrived.  

The joy of owning my own firm came in the freedom to come and go as I pleased, to do what I wanted—and when I wanted. But freedom comes with baggage. Namely, overhead, unsteady cash flows, and legal exposure. Even so, the freedom to make my own decisions was a breath of fresh air. If I wanted to pursue a new strategy, I did so. If I wanted to leave work early, I left. If I wanted to buy a new computer, I bought it. No committees. No boss. No one was telling me what I could or could not do. It was nice.

But in working alone, I learned a few things about myself. I love freedom, but I hate fear. I also found that I am more productive in a group environment. Why? Accountability. Additionally, I discovered I need more wisdom than I (alone) possess. As much as I hate to admit it (call it pride), I need a group of people. 

Partnership

So, for most of my career, partnerships have been my work environment of choice. I like steady paychecks. I enjoy having answers to my questions just down the hallway.

The wisdom of partnerships is a beautiful thing. The Bible provides this word: 

Plans fail for lack of counsel, but with any advisors, they succeed. Proverbs 15:22

I can’t count the times I have seen problems surface—seemingly—with no answer, but then, in a partnership meeting, ideas, disagreements, thoughts are tossed around. And in the end, there is an answer. Creative, wise, sound.

Multiple perspectives meld together to provide insight, a wisdom much greater than my own. But submission is necessary to be a part of a partnership. And I think that’s hard for most people, including me. And while I desire to do as I please, the power of the group is real. People working together often achieve what individuals cannot.   

Solo or Partnership – Which Do You Prefer?

In the end, the decision to work alone or in a group is a personal decision based on our own bents. Some people work better by themselves and want freedom more than anything. I get that. Others find success in a partnership. So which are you? One who likes to work alone or one who loves a group? What makes you the way you are?

How Internal Viruses Affect Accounting Firms

Viruses from your own staff can do great harm

Repeatedly you’ve heard about the threat of external viruses, but has anyone told you about the internal ones? These viruses do their damage quietly, but the effects can be painful.

Picture is courtesy of DollarPhotoClub.com

Picture is courtesy of DollarPhotoClub.com

Let’s look at an example.

Cody works for a public accounting firm, and he’s been looking for a sample fair value note disclosure — you know one that addresses the three levels and describes how fair value is determined. So Cody Googles “fair value disclosure” and Eureka! He finds it. One problem, however. The sample note is wrong. But Cody thinks it’s right, and, in his desire to help others, he emails the fair value note to his associates. The next thing you know, the deficient disclosure appears in twenty sets of financial statements.

Silently, effectively the virus spreads.

One year later, Cody’s firm is having its peer review, and the reviewer sees the faulty note in two sets of financials. Not good. Now, the firm receives a finding for further consideration (commonly referred to as an FFC). Then the firm corrects the fair value disclosure in the next year and clients are saying, “I thought the prior disclosure was correct.” Now your clients lose some trust in your firm, and we all know that trust is the foundation of any business.

Why do these types of viruses spread? Mainly because they come from a trusted source.

How can you stop them? Designate a person (or two) in your firm to vet new information before it is shared. Here are examples of new information or documents that might be reviewed before sharing:

  • Note disclosures
  • Engagement letters
  • Audit forms
  • Sample financial statements
  • Sample management letter comments
  • Sample opinions

Your designated reviewers need appropriate firm resources to aid them in their task. Those resources include:

  • Publications (such as):
    • AICPA audit guides
    • AICPA practice aids
    • PPC’s online books and SMART Practice Aids
  • AICPA’s technical hotline (free)
  • Center for Plain English Accounting (CPEA) (fee-based)

While the AICPA’s technical hotline does not provide written responses, the CPEA does — but there’s a cost.  My firm has used the CPEA for several months now, and I like what they are providing. For CPEA membership information, click here.

Capturing Time-Especially When You Are Busy

Time marches on, so Tracy Lawrence says. The question–at least for a CPA–is: Can I bill for it? Not if you don’t know where it went.

iStock_000002150418SmallDo you ever work all day and think “I need to log my time.” But as you try to recall what you did, you can’t–at least not well anyway. You’ve worked all day (all 10 to 14 hours of it), and now, you can’t remember what you did. So you start the drill. Scanning emails and tax software, you construct a summary. You’re able to create a list of projects, but you’re not quite sure how much time you actually worked on each. So you guess.

Or maybe you’re one of those people who uses yellow-stickies. At the end of the day, yellow stickies are everywhere–on the computer screen, your desktop, your scanner, maybe even in your pants pockets. This is better than nothing, but still not an efficient or accurate method.

So how should we track our time?

1. Capture time as you work.

I can promise you if you don’t, you will spend more time–time you don’t have–summarizing your time at a later hour.

Turn your timer on–most time and billing software has this feature–as you start a project. But what if I get a phone call or someone walks in and interrupts the timed project?

Two suggestions here:

  • Close your door as you start a new project and
  • Don’t answer your phone for a period of time, say one hour

By not closing the door and answering the phone every time it rings, you are inviting interruptions.

Focusing on one project saves time. Moving back and forth between projects does not.

What if your boss will not allow you to close your door and requires you to answer phone calls as they come in? I can’t help you. One thing I do know: Sustained concentration creates efficiency and a better work product.

2. One last word on capturing time: Key in your time daily.

If you are using your time and billing software as you work, you’ve solved this issue. But if not, at a minimum jot down the projects you work on and then key those in at the end of each day. Keying in time for a whole week or two weeks at one time can be done, but if your daily sheet doesn’t add up (you know you worked 12 hours but your sheet reflects 8 hours), you will not be able to recall–days later–where that time went. I know. I have done this too many times in the past.

Main Points

  1. Track your time as you work.
  2. Key in your time daily.

You already know these things. I’m just writing this post as a reminder; I know I need the same from time to time.

Other Thoughts

Do you have other tips you can share about tracking time? If yes, please do.