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Finding help when you need it.

Many practitioners would not think of using specialized professionals who were not part of the general makeup of a tax practice. However, as this article illustrates, enrolled agents (EAs) and management consultants can sometimes offer invaluable expertise and assistance.

Enrolled Agents

There is a constant need for professional tax staff, and EAs have proven to be a great source for filling this need. Surprisingly, though, many CPAs have never heard of EAs, and have no idea who they are or what they do.

Enrolled agents attain such status by successfully completing a two-day professional examination on taxes given by the IRS, or by having been employed with the IRS for five years at the field auditor level. EAs may represent taxpayers at all levels within the IRS, just as CPAs and attorneys do.

An advantage to using EAs (at least in California) stems from the difficulty CPA candidates experience in becoming licensed. Although the regulations may differ in other states, CPA candidates in California must complete 500 hours of financial auditing before they may be licensed. Because many small firms no longer handle financial audits (due to the prohibitive cost of errors and omissions insurance premiums), they cannot get their own staff members certified. One alternative is to encourage employees who show promise to become EAs, a designation that carries with it an ascertainable level of proficiency.

Firms of all sizes should consider employing EAs--as paraprofessionals, full professionals with direct client responsibilities, or even tax managers EAs have been this author's (not so) secret weapon for many years, with some employed year-round and still others during tax season.

Management Consultants

An even less obvious service provider to accountants (who often find themselves consulting with clients on strategic planning and administrative matters) is the outside consultant. Although practitioners are the first to advise clients to consult with "experts" on business, tax and financial matters, they often fail to take their own advice to seek the counsel of those with a fresh eye and different perspective. It seems to be common practice to keep stretching and expanding what has been done all along, and simply pile one block of procedures on top of another. Practitioners need to "step outside the box" and avail themselves of the professional training and experience of others.

Owners or partners may have a general feeling that things could be better or that something is going wrong, whether it is a personnel issue, declining profitability with increased volume, or reliance on time-consuming, anti-quated procedures. Management consultants can address the particular issues that tend to weigh down a business, or they can merely observe a firm's day-to-day activities and offer general advice (for example, an attorney who brought in a management consultant just to follow him around learned how to increase his billable time).

Several years ago, this author's firm hired a management consultant with a background in psychology and interpersonal relationships (a respected client for over 30 years, she was the obvious choice). Initially, she was asked to address specific personality conflict problems. But after she effectively resolved those problems, it was apparent that she could become an invaluable regular resource to the firm. Her expertise has been tapped for all human resource/personnel matters (including team-building retreats, conflict resolution, and customer service and telephone skills), as well as for training in compliance issues (such as safety, discrimination and sexual harassment). She has designed customized performance appraisal forms and taught the firm's professional staff the most effective ways to conduct performance appraisal meetings with employees. She has helped with marketing and public relations, improved client contact literature, business cards and letterheads, brochures and (modest) yellow page advertising, and even assisted in remodeling and decorating the office.

While large firms can afford to have "universities" teach their staff to manage better, small firms cannot afford the same luxury. However, a consultant can provide these same services at a lower cost and can work on a one-to-one basis to improve staff and systems management skills.

Consultants who specialize in both "people" and "processes" can help a firm streamline and update its procedures and systems. Starting with the firm's vision and mission, a customized policy manual--not some modified generic version--can be created, with all procedures, forms and tasks reexamined.

Because small practice owners tend not to devote time to administrative matters, and cannot afford full-time professional human resource personnel and full-time experienced strategic planning and organizational development specialists (or even experienced office managers), hiring a qualified consultant who can understand and integrate all aspects of a practice may be the best solution. Professional consultants, with their varied expertise, time and unbiased eye (they don't need to specialize in accounting practices, although it helps), can develop or modify systems to turn many tax practices into more efficient, productive and profitable businesses.

Editor's note: Mr. Pascarella is the former chair of the AICPA Tax Division's Tax Practice Management Committee. Mr. Williams is a member of the committee.

If you would like additional information about these articles, contact Mr. Pascarella at (401) 331-8806.

From Leonard W. Williams, CPA, P.C., Sunnyvale, Cal.
COPYRIGHT 1997 American Institute of CPA's
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1997, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Title Annotation:professional help for tax practitioners
Author:Williams, Leonard W.
Publication:The Tax Adviser
Date:Dec 1, 1997
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