How Mature is your Accounting Practice?
A lot is written about how your accounting practice can be the best in the world, what metrics you should be chasing and the best things you need to be doing.
In my mind, the reason for this is that there is very little guidance given to small and medium businesses on exactly how to run a business.
The reason for this, is that working out proper processes and maturity models is tricky and can be extremely expensive. That's not to say that these models cannot be amazingly beneficial; quite the contrary, however there are little resources and time available to invest in such a thing.
Large service businesses have the option of engaging management consulting firms to help them develop a maturity model and rise through the various maturity levels. So for small-medium businesses that do not have this luxury, their inability to develop comprehensive policies and processes can be one of the fundamental reasons why most do not grow.
However, there is a maturity model which applies to services businesses such as accounting firms. It is CMMI or Capability Maturity Model Integration. It is described in Wikipedia as a process level improvement training and appraisal program. It was developed by Carnegie Mellon University and is required by many US government contracts.
CMMI started in software engineering but has been generalised over the year to assist in the development and delivery of all kinds of services. Here at HubOne, we believe that the use of a formal process framework could be of significant assistance to practitioners wishing to have a mature firm and who don't know where to start.
CMMI defines maturity in 5 levels:
Initial - Processes are unpredictable, poorly controlled and reactive
Managed - Processes characterised for projects and is often reactive
Defined - Processes characterised for the organisation and is proactive with projects taking their processes from the organisation's standards
Quantitatively Managed - Processes measured and controlled
Optimising - Focus on process improvement
It stands to reason that the more mature your processes and business, the lower the cost of delivery, the higher the quality output and the lower the overall risk.
However herein lies the underlying problem; Accountants are not taught how to run practices, and almost every partner wants to do things differently. Over the coming weeks, we'll be exploring the different levels and give you tips on how you can grow without breaking the bank.
To this end, we're also writing a book to help practices get more mature with deep, real world guidance on just how to do that. If you'd like to get a sneak peek, let us know here.