Saturday, March 18, 2017

How to stand out in Private Accounting

In private accounting, what do you think is the most important thing someone can do to make sure their voice is considered in the planning stages of a project and not just brought in at the last moment for a "heads-up" as described in your article.

There are a few factors at play here. 

1) You always have to do well in your job. This helps establish your rep. All you need are a few rumors flying around, and you're done.

2) You have to have a good mentor who has influence - one who is willing to talk you up to other groups. This will get the other groups to come to you directly for questions, if any.

3) If another group comes to ask you a question, prioritize it if possible. You'll be judged on the limited interactions with them.

4) Whenever you get a chance, instead of emailing them, swing by their offices and discuss your questions with them, this helps build rapport.

5) Put yourself in their shoes whenever the groups battle with each other - see if you can work out a compromise or help explain to them why your ask is critical.

6) Go out to drinks with them whenever you get a chance, or if you don't drink, maybe still go and drink a glass of coke or something. The other groups, especially the revenue generators, are always out and about. Make an effort to join them.

Eventually, a combination of these factors will make the other groups respect and like you, and thus reach out to you. That is so important for advancement in a private company.

Personality or Quality - what matters more in the Big 4?

 In your experience how much of "getting on a partner's good side" do you attribute to consistently completing quality work versus getting lucky and happening to connect with someone on a more personal level? Did you feel the people receiving the partner's attention were those who deserved it?
Great question - at the end of the day, the quality of the work will always win. This is what partners are judged on. If they know that you have it taken care of so they can spend time with their kids, work on their book of business,or go golfing, that'll always win out at the end of the day. Now, they may not take you golfing with them, or spend a quality amount of time mentoring you (since they may not have a personal connection with you), but you'll be the first one they go to when they have complicated engagements that they need some top talent on, especially in the PCAOB world

Let's compare a few different individuals-

Alex Smith crushes audits. He is the type who takes ownership of the audit and essentially manages the whole thing himself. The team and the client don't mind him. While he's not shooting the shit with them, it's a quiet but top-quality audit. The partner shows up when Alex wants him to show up, takes the team out to lunch and schmoozes with the client, and then leaves. While Alex doesn't tout his own horn, his team does the touting for him via instant messaging. Word spreads - and his reputation is set.

Jane Stewart is a really bubbly and personable person. Her team absolutely loves her, and she thrives off it. The client is a big fan of Jane too because of her personality, so does the Partner. But the audit itself is average - barely meeting deadlines, lots of holes in the audit, etc. etc. The partner has to spend more time on the audit than he or she likes, but Jane's personality is a good buffer to reduce any additional pain the partner feels.

Robert Johnson is condescending, full of himself, and overdoes audits. The team hates him, so does the client, but the audits are in top shape, and the partner does not have to worry about audit quality.

 Audit 1 -This one is your average private company audit. There is a deadline, but the scheduling of the audit can be flexible. The client is pretty average, and isn't providing a quality accounting product. It's just one of many in the partner's book of business, since the VC funding the Company is an important relationship. The partner puts Jane Stewart on this.

Audit 2 - This is a public company, and one of the partner's most important engagements. The client relationship is sensitive too, but the partner can't afford to screw this up. Alex Smith is put on him, even if he's not someone the partner is close to, because the partner knows he can get the job done over the others.

Audit 3 - This is also a public company, but it's a shitshow. Nobody wants to be on this, but while it's not as important as audit 2, it still carries a certain level of risk, so the partner puts Robert Johnson on this. Only because Alex can only do one audit.

Now - it gets interesting the further up you go. This is when building connections with partners matter a lot. At the end of the day, they're the ones who vote you in to become partner. In the past, when audits were much more lax, personality mattered much more - since it was all about building a book of business and schmoozing with clients to keep them happy. Now, in this fear-based environment where Partners are concerned about internal audit reviews and PCAOB reviews, they are willing to take in more partners with bland personalities to help cover themselves from the inspection boards. It's a different world now. Another approach that the firms try is to take the Alex Johnsons of the world and make them directors instead of partners - well-paid, but without the partner benefits. If the Alex Johnsons accept, that's perfect - but in may instances people know it's essentially a way to tell them they aren't partner material.

In summary, while personality used to matter a lot back in the day, the quality of the audit currently rules. Keep your head down, maybe play some politics here and there when necessary, and you'll be in top shape. (And also keep the clients happy - it's hard to do in the new world, but it's worth a shot).

Sunday, February 19, 2017

Private vs Public politics

So how do you view the politics in the private as compared to the public? 

Great question, made me want to post again. I realize it's been six months, time flies when you don't need blog therapy anymore. On to the question - there's a lot of politics in public and private. On a high level, there's more red tape in public and in private.

Public - The Big 4 firms are big organizations - so it's much harder to cut through and get what you want. If you want to get on a particular engagement or industry, it's not as simple as going through the schedulers. The key is to get on the good side of partners, who can then make it happen. While that's simple enough, the issue is that it's not like there's just one partner..while the partners have a lot of power, there's a more concentrated group of partners that have even more power. Now it's a battle of trying to latch on to the right partner so he or she can win a battle against other partners. That's where true politics come into play - it can be brutal for people on the losing end. This select group of partners always win. And that's the lesson for all of you in the Big 4- it's great that certain partners like you, but you gotta make sure that the right partners like you. Trust me, it matters.

Private - There's a decent amount of politics in Private too, but the one that stands out the most is the politics amongst different groups. While in public, the people in power are the accountants, since we are the revenue-generators. So it's just in-fighting within the revenue generators. In Private, the accountants are the back-office, and not the revenue generators. So it's an uphill battle when fighting against other groups - especially against the revenue-generators, like engineers in software companies, and associates on funds. At the end of the day, while the accounting can get very complex if the front-office gets creative, accounting may have a voice, but the voice is basically - "can you give us a heads up"? Hopefully people in the C-suite have an accounting background, so they can have your back at times. This is a tough pill to swallow. 

At the end of the day, when you look back, there's still a good amount of politics in both fields. My only advice here - work hard, but at the same time gain the trust and backing of people that can make moves, both in public and private. Having that mentor who can influence things and people will go a long way towards making sure you're getting what you want out of your career.

Saturday, September 17, 2016

Promotion in Private

Working in private can be better although it can also be hard as a staff person. I'd wait for the manager title and 5 years of experience. That way you can have staff people under you. You don't want to be a staff in private because you'll be doing the work for a lot longer in your career. It's much harder to get a promotion in private.

 Agreed, a lot of individuals who switch from Public to Private (especially after 3-4 years) struggle with the idea of not getting promoted every year when they switch to Private. It's absolutely true that you will not get promoted every year, especially if you're average. It's not like a factory where people go in and out all the time, there just aren't enough slots. Stay until manager in Public, then switch to Private if you don't want to be partner. It's a common trope that the Big 4 put out there, but it's somewhat true. The way to succeed in Private is to quickly be good at whatever you're doing, and then speak up to say that you are ready for the next step. The Company will want you to stay, and then either work towards promoting you or giving you more responsibilities that will help you if/when you decide to jump between Companies in the future. 

Should I leave after 2 years as senior?

I'm currently working in KPMG Philippines, will about to start my fourth busy season and it'll be my second year as a supervisor/senior. I would like to know if it'll be a good idea to go work for a private company by this time. My only concern is that work outside audit may not be as enjoyable for me. However, I am starting to get tired of too much workload. 

At this point, stay until you get a year as manager under your belt and then leave. You could leave now and start as a senior accountant somewhere only if it's not a regular operational job where you'll do the same thing every time. Over the next few years, you'll pick up a lot of soft skills and technical skills that will be critical to your growth. If your only goal is a 9-5 workday and the money isn't all that important to you, then leave now, but if you can tolerate the workload for 3 more years, stay. It'll benefit you a lot long term.

Why is private better than public?

"Could you elaborate, why your life is better now?"

Here are some of the various differences between public and private-

a) The work itself - The work is significantly better. In public, you spend half your time on documentation and controls. That's all essentially Cover Your Ass work so the PCAOB or your internal reviews don't deem it to be a deficient audit. You're essentially trying to figure out ways to say that you are comfortable with your client's work. While you get a high level overview of the various processes, you don't really dig into it or have the power to change things. In private, you're actually making decisions - whether it comes to accounting conclusions or process improvements, and what you prepare or review actually makes it into our financials. Yes - we're not the revenue generators, but there is something more intangible in coming up with the financials than reviewing it once it's done.

b) On call - In audit, you're always on call. If a client calls you on a weekend, you answer. You're always checking your phones at night and making sure you have substantive responses in case your team or the client emails. And when there's offerings, forget about it. In private, unless it's during monthly close or whatever, you're generally in good shape in the evenings or weekends. You likely won't even be receiving emails (unless there's an imminent deal or offering), and even if you do, the expectation is that you will only respond on Monday or when you're back.

c) Vacations - In Private, vacations are vacations. People rarely bother you when you're out. In audit, at a certain point in your career, you don't really have work-free vacations. Goes back to b), in a sense, you're always on call.

d) Not being hated - Auditors are a necessary evil, and no group in the Company really likes dealing with the auditors. I was fine with it as an auditor, but there are always conflicts. Client service is a misnomer with the PCAOB breathing down the auditors' necks. It sucks when you're trying to push the Company to do something that you think is a waste but needs to be done so we can cover ourselves from a bad rating. 

d) Bonuses and pay - The bonuses in Public aren't much, it just isn't. The Firms make it up by increasing the base by 10-15% every year, but it's still an absolute pittance. In Private, the bonuses are where it's at. It's a great feeling when you find out about your annual bonuses (until you see the after-tax numbers, but that's a different conversation). Yea sure, the base pay usually doesn't increase that much in most companies, but I would argue that if you're good, it will increase since the Companies would want to keep you. It's not like a factory model where they can spit you out and hire another one to replace you immediately.

e) Stability - After a certain age, you'd probably not want to be placed on random engagements in the middle of nowhere, or have a small sense of uncertainty if there are open slots in your schedule for whatever reason - your existing client got bought out, the Company moves to another location to cut costs, etc. etc. In Private, you go to the same location essentially every day. While that gets boring when you're young, it's something you will appreciate as you get older.

There are two things that I miss from Public - 

a) Back office - Accounting in Private is the back office unfortunately. So we're not the drivers of major decisions for the Company, and just have to deal with what the Company does from an accounting standpoint. In Public, the auditors are essentially the front office, although it doesn't really feel that way.

b) Flexibility - While you can get flexibility in Private, it's nothing like the flexibility you get after a certain level in Public. Once you have self-sufficient teams doing the day to day work on various engagements, you can basically work from home a good of time, or take days off here and there for various errands. You know you're going to working like a dog on random days anyway, so enjoy this flexibility.

Friday, August 26, 2016

Working in private

Can't believe that this is the first time I logged in this year. I guess I just didn't need this kind of therapy anymore. Anyone got any questions about the other side, i.e. the post-audit life? I can tell you one thing - it is significantly better.