Anderson ZurMuehlen Style

1. Anderson ZurMuehlen Style

2. $600 $500 $5000 $300 $400 $500 $300 $800 LOSEA T U R N $400 $800 $300 BANKRUPT $400 $500 $900

3. Objective D O I T B E T T E R E E A N C T N O H P R O F I T A B I L I T Y

4. $600 $500 $5000 $300 $400 $500 $300 $800 LOSEA T U R N $400 $800 $300 BANKRUPT $400 $500 $900

5. Objective O N I S M I S

6. ANDERSON ZURMUEHLEN & CO., P.C. M. I . S . S . I . O . N AT AZ, WE PROVIDE VALUED SERVICES AND SOLUTIONSTO HELP OUR CLIENTS SUCCEED TODAY . . . AND TOMORROW. CORE VALUES In fulfilling our mission, we believe in: HONESTY, INTEGRITYANDETHICS IN ALL THAT WE DO FOSTERING CREATIVITYEMPLOYING TALENTED, SKILLED, CARING AND RESPONSIBLE PEOPLE TEAMWORK IN AN ATMOSPHERE OF MUTUAL RESPECT DEVELOPING LEADERS FOR OUR COMMUNITY AND OURSELVES

7. Embrace and live by the firm’s core values daily Embrace the principles of self-accountability – “return and report” Maintain strict confidence about client and internal information Provide exceptional client service daily Promote all services of the firm as well as your personal skills when appropriate Improve professional skills every year Improve technology skills every year Bill all engagements monthly or in accordance with a written agreement Attain personal production budgets and complete work assignments each year Assist in your office’s efforts to reach its goals and complete its administrative assignments Performance Standards

8. $600 $500 $5000 $300 $400 $500 $300 $800 LOSEA T U R N $400 $800 $300 BANKRUPT $400 $500 $900

9. Entity N A L S S I O E P R O F S E R V I C E R A T I O O N C O R P

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11. Teamwork Y L I T S I B I N R E S P O C I R C L E

12. RESPONSIBILITY CIRCLE Firm Office Me

13. Responsibility Circle • Accountability — return and report • Attitude — enthusiasm • Mindset — habits can (and in most cases must) change • Don’t fall into the trap of believing the policy doesn’t apply to YOU • The proof is in the pudding

14. Responsibility Circle • One size does not fit all, but you must demonstrate the following basic firm and office standards • 80% of beginning WIP is expected to be billed every month

15. $600 $500 $5000 $300 $400 $500 $800 $300 LOSEA T U R N $400 $800 $300 BAKNRUPT $400 $500 $900

16. Profitability L E A U V

17. Think about “us” What does it takes to provide excellent service in a professional services entity? — people, technology, space, and lots of other resources

18. Think about “you” What does it takes to support our employees? — compensation, benefits, training, more technology, and excellent administrative support staff

19. We need to bring in new business to keep our people busy and keep the firm working at full capacity. All shareholders are expected to lead our responsibility and profitability efforts and set an example of accountability.

20. Think about the industries we utilize or service. Their hourly rates have escalated and those folks are not in abundance. In the last three years, mechanics, electricians, plumbers and others have raised rates 50% or more per hour.

21. Each AZ/EBR employee needs to become comfortable with their standard billing rate, as well as the rates of all our staff. If you are not comfortable charging this rate, then you should not be comfortable with your compensation.

22. $600 $500 $5000 $300 $400 $500 $800 $300 LOSEA T U R N $400 $800 $300 BANKRUPT $400 $500 $900

23. Profitability B A I S C B E S S U S I N E P R I N C I P L S

24. Profitability is directly connected to billing which is the purposefulresult of the service performed.

25. Business principles dictate we start by getting the work. But do not give a knee-jerk fee quote. Whether quoting for formal audit proposals or simple tax returns, inevitably when we pause to consider the service required and put the pencil to paper, we end up with a fee quote above the knee-jerk price.

26. With the engagement in-hand, a critical step toward profitability is engagement management. Engagement letters must outline expectations and not accept responsibility for client slippage. If clients don’t meet expectations, the engagement manager should respond immediately and outline the fee adjustment in writing.

27. $600 $500 $5000 $300 $400 $500 $800 $300 LOSEA T U R N $400 $800 $300 BANKRUPT $400 $500 $900

28. Profitability C I N G R E A T R E V E N U E

29. Time Entry • Enter time daily. • Time management is a critical factor in attainment of firm and personal expectations. • If an explanation is needed on any time entry, make sure to record a note.

30. Engagement Management • Make a plan • Schedule appropriate staff (possibly across office lines) • Watch productivity percentages • Leverage staff • Monitor budgets (managers and shareholders)

31. Engagement Management • Work management • Supervision • Client touches • Quality service • Delivered in a timely manner • Hit the expected mark

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33. Trust I S N G I B I L L E G A T L E D A D E T R U S T

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35. The Invoice H T E B I L N L G I S S A E P N D R O C E O B J E C T I V

36. Billing • Fair value • Assess the work and create notes in WIP • Bill in a timely manner • Use interim billing (for example, separately bill all extensions) • Write-ups • Write-downs

37. We must believe our assigned standard rate is fair and an acceptable benchmark standard. • Standard rates approximate value developed and associated with our direct costs. Since they are an approximate value, use them as a guide.

38. Office Process / System-Specific • Approval and review • Cycles • Electronic / paper • Timing invoice mailing • Understand client A/P cycles • Monthly attainment of 80% standard

39. Billing Realization % • We have a firm-wide and office benchmark. • We have an annual goal by office and firm. • Realization is enhanced by the delivery of excellent client service and client interaction.

40. Billing Is a Delegated Trust • Each biller has their hands directly in the firm’s checkbook.

41. Preferences • No write-downs between $0 – $25 • Invoices should be in even dollars, (always round up), unless billing direct out-of-pocket expenses. • All write-downs must have an understandable note in the billing screen in practice management • Any write-down > $XX (office determination) must be reviewed by a shareholder before the office manager completes the final approval

42. $600 $500 $5000 $300 $400 $500 $300 $800 LOSEA T U R N $400 $800 $300 BANKRUPT $400 $500 $900

43. Collection A C S O U N T C V A B L I E R E C E

44. AR Management • The engagement is not complete until the money is in the bank • No additional services should be provided, if AR aging reaches 120 days (and the client is advised) • The engagement manager maintains collection responsibility • Assess an extra handling fee (10%) for consistently slow pay or late work arrival.

45. $600 $500 $5000 $300 $400 $500 $300 $800 LOSEA T U R N $400 $800 $300 BANKRUPT $400 $500 $900

46. Profitability B E S T P R A C T I C E S

47. Best Practices Use interim / progress billing if the engagement will take more than 45 days, and each month thereafter: • Financial statement engagement letters need to be modified to reflect billing frequency • For tax work, larger returns with an annual fee >$1,000 and work period greater than 45 days (including estates) • Bill all extensions at time of service

48. Busy Season • Last year tax return billing x 1.05 minimum is the expected minimum billing standard for comparable work. • Relieve WIP within 5 days of final return processing.

49. We do not have an elastic capacity for tax preparation.Rarely should we have write-downs February through April for tax work. • The exception is if we really were the ones messing up. Too often though we give the benefit of the doubt to the client when billing . Stop and think.

50. Billing Standard • At least 80% of beginning WIP is billed every month