Tech pageant: evaluating how tech investments have paid off.

• Author: Blitz, Adam
• Position: Tech Falk

It feels as if every fall we buy into new technology. Hardware or software, accounting firms are sold on the latest and greatest technology that they often don't need. I have previously commented on how to ensure that you don't buy into the hoopla of the software salesman in the October 2015 "Tech Talk" in California CPA, but in case you missed that article, here's how to understand the impact of your new purchase.

First off, congratulations on the new purchase! I truly hope it's working in your practice. Onward--based on the assumption that the overall goals of purchasing a new technology is to reduce stress in life, create internal efficiencies and increase our value-add to clients--firms should evaluate on a system-by-system basis as to the reduction of stress caused by each software.

Unfortunately for us CPAs, stress is a nonmetric indicator. And since, as CPAs, we tend to dismiss any non-financial or numeric key performance indicator, here are five financial key performance indicators to evaluate your firm's stress level during this tax season:

1. Employee Turnover: There's a midpoint where we want our employees to be happy, but we don't want to coddle them. When employees are stressed from constantly learning and implementing new technologies, firms should look at the way the new technologies are purchased, how employees are trained and the continued usage of the technology. Is it actually being used, or have people given up and its just sitting there? At the same time, if you have found that employee turnover has drastically reduced (greater than 10 percent reduction in turnover over a three-year period) due to the new software, scream for joy and shout hallelujah and praise for that company and its software. The firm will recognize the cause and effect of the software to-turnover impact based on internal rumblings that are often found by the water cooler. Finding the happy medium in your employee turnover will define your success in the future years.

2. Client Turnover: It happens every year: How many clients did you lose this year? It's understood that businesses close, individuals move away and various life circumstances occur that result in clients leaving your practice. The question is: How many clients left because you could not appropriately service their needs? Despite the fact that firms often fail to employ the appropriate knowledge to implement appropriate solutions, another reason for the lack of appropriate service could...