The firm of the future: new model shuns time sheets, favors value creation.
Journal of Accountancy › Vol. 206 Nbr. 5, November 2008
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The firm of the future: new model shuns time sheets, favors value creation.
EXECUTIVE SUMMARY
* The traditional business model of focusing on top-line revenue has several limitations when it comes to running a CPA firm because it overemphasizes the benefit of every marginal dollar of revenue and every client and places an artificial ceiling on income potential * Measuring efficiency based on indicators such as billable hours, utilization and realization rates comes at the expense of creativity, innovation and effectiveness. * The new paradigm for firm management is based on intellectual capital (IC), or knowledge that can be converted into profits. A firm's IC is comprised of human, structural and social capital. * By focusing on effectiveness over efficiency, firms are forced to consider each client's profitability and how that client fits within the firm's overall purpose and strategy. * Firms that understand the difference between knowledge workers and service/manual workers will have an enormous window of opportunity to attract, develop, inspire ...See the full content of this document
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