Michelle's Blog! Yay!!

Wednesday, December 01, 2004

Final Project - Hall, Kistler & Company LLP

The Organization

Hall, Kistler & Company LLP is an accounting firm located in Canton, Ohio. As its website explains, Hall, Kistler was founded in 1941 for the “general practice of public accounting.” The accountants, CPA’s, and consultants at HK provide businesses, non-profit organizations, and individuals with advice on ways to “optimize cash flow, limit tax liability, comply with fiscal and regulatory requirements, better manage business and maximize wealth.” The members of the HK team, along with their bios, are listed on their website. They offer assistance in several areas, such as management consulting, estate and gift planning, business valuations, tax preparation, tax planning, and auditing.

The partners and managers each have specialties within the field, including health care, manufacturing and distribution, not-for-profit, oil and gas, restaurants and hospitality, business valuations, and a family financial planning group. These specialties are what attracts clients from all over the country, and even across the globe. More about these specialties can be found by clicking here. The partners then head a committee dedicated to their specialization.

Hall, Kistler’s mission statement reads, “Hall, Kistler is committed to helping our clients realize their business and personal goals by providing them with outstanding accounting, tax and consulting services.” With such high ideals in regards to client relations, the partners, managers, and employees must have exceptional standards within the company. Hall, Kistler is also the only Northeast Ohio firm affiliated with BKR International. BKR International is “an association of independent accounting and business advisory firms.” BKR International represents 137 firms with 300 offices in more than 60 countries worldwide. They select clients based on their local influence as well as international capability. They believe that with access to the services and resources of an international firm, but with the personal attention offered only by smaller firms, “BKR’s independent member firms are THE alternative to the Big Four.” In agreeance with BKR, this article, from USA Today, explains why many companies are no longer opting for the Big Four.

The general breakdown of authority is as follows: Partners, Managers, and Staff Accountants. The five partners make up the executive team, and they have the most client contact. Among other things, they are mainly responsibly for bringing in new business and maintaining current business. The managers are a sort of intermediary between the partners and the junior staff. They are in charge of running specific jobs, and the junior staff report to them on individual projects. When a partner takes on a new client, he or she will often assign a manager who will stay at the client’s office for a set period of time, managing the details of the job, while the partner oversees and maintains the relationship with the client. Hall, Kistler also has a Tax Compliance Director and two senior accountants. The Tax Compliance director is in charge of individual income tax compliance work, as well as responding to tax authorities, and staff training. Senior accountants have more responsibility and seniority among the staff accountants, and may take on full accountability for smaller projects under supervision. The junior staff, or staff accountants as they are more officially called, work on portions of audit or accounting engagements, while working toward passing their CPA examination. These staff accountants could be referred to as the peons discussed in Chapter 1.

Internal Communication

Amid approximately twenty-five employees, the methods of internal communication currently in use involve the following: internal email, an intercom system, face to face communication, and regular meetings. Generally, when an issue needs to be communicated to an employee, it is done simply through a personal visit to his or her office. They may also call, since the office phones are equipped with an internal intercom system. Email, specifically MS Outlook, is used as a way to set up appointments. They may use email to send a message to a specific group, everyone, or just one person. They sometimes cc: another person working on a project, or for a partner to let the office manager know he or she approves of expenditure, such as an airline ticket for an employee to travel to a client’s office out of state.

Hall, Kistler also relies heavily on meetings. They have weekly partner meetings, monthly or as needed managers’ meetings, and monthly staff meetings. Each meeting has a different purpose. The partners usually talk mainly about the business of the firm. The managers’ meetings are usually about jobs, staffing, and CPE (Continuing Professional Education). The staff meetings are general meetings to update the staff on what is going on within the firm, and each committee (tax, audit, business valuation, health care, etc.) has a chance to speak.

Each committee is dedicated to a specific industry, and while the members of a committee do not necessarily works together on projects, they act as a sort of “clearinghouse” for one another, sharing the information that has been gathered on said industry. If, for example there is a new tax or a new accounting issue, or a change to a previous one, an individual or group will be assigned to research this and report their findings to the committee. This research is assigned on a case by case basis.

When Hall, Kistler is working with a client out of state, or even out of the country, they rely heavily on email and telephone communication. For example, Mike, the firm’s managing partner, is currently working with a client in London. Because there is a five hour time difference, telephone calls during office hours can prove to be a bit difficult to orchestrate. The clients will email Mike with any business he has, to which Mike sends an email in response. It is when the client receives the response that he then calls Mike on the telephone. Mike says this is mostly because there are some points that can not be explained in detail through an email, and are more easily communicated through verbal communication.

At any point in time, the firm is working with possibly hundreds, or even near a thousand, clients. The partners take on the most client responsibility, and it filters out down the line. Some workers, such as the Tax Compilation Director, for example, who handle smaller jobs, will be handling very many at one time, while those who are handling big jobs requiring more hours, will have a fewer number of clients. Managing Partner, Mike is currently handling ten clients, but in a busier period, like tax season, he may handle up to twenty. Although a partner may typically hand over a job to a manager, they still have a part in every job, whether it may be simply reviewing the work, expanding upon it, or providing research on a client.

Take this situation for example: Mike is also working with a client in Lexington Kentucky, NGAS, Resources Inc., who made a large acquisition of another company in Tennessee. Because NGAS is a publicly held company and because of the size of the acquisition, Hall, Kistler had to audit two years of financial statements for the acquired company. NGAS is required to file a Form 8-K with the Securities and Exchange Commission (SEC) within 60 days of the closing of the transaction. The logistics of this particular job highlight the importance of timely communication. Drafts of reports have to be prepared and sent back and forth between Canton and Lexington, as well as obtaining information from Tennessee and forwarding work product to attorneys in New York. The primary tool used is email with attachments.

Currently, the only form of electronic communication in use at Hall, Kistler is email, which is very heavily relied upon. They do not use company cell phones, although the partners are looking into that. At present, each employee has his or her own cell phone and cell phone plan, which they put on an expense report and are reimbursed for.

Discussion/Problems

Hall, Kistler’s website states, “Hall, Kistler will continue to respond to the dynamics of the region’s ever-changing economy with fresh approaches and sound solutions.” An organization must be open to change if they want to keep ahead in their industry. By looking at current problems with communication, we can more easily pin-point their solutions.

For many organizations, email is still their number one method of communication. In a sense, email has revolutionized the way we communicate. People in an organization can easily work together via email, without ever having spoken face to face. While email has allowed us to communicate quickly and effectively, there are still some road bumps one may encounter. Danielle Armstrong points out that with no search tool, it is nearly impossible to go back and find the information in a previous email. In addition, there is the problem of redundancy, which leads to inefficiency. Sending an email to all members of an organization can yield too many emails in response.

Having clients out of the area could prove to be a problem. Even the clients right there in the area could have better communication with the firm. Telephone calls are only used to discuss details, with email being used for almost everything else. It would be much more convenient for clients, and Hall, Kistler as well, to have a system continually updating the client on progress of the job. Meanwhile, the client needs to have the ability to provide feedback in a similar manner.

Having committees with members overlapping may be efficient for multi-taskers, but what about for everyone else? With information being researched and reported back to the committees, it could get rather confusing keeping all the information straight. While research is of course archived, with so much information for so many committees, going back to find it could seem overwhelming. Committee members should have this information at their fingertips, with an easy to use archiving and search system.

It is understandable that individuals within an organization may be hesitant to welcome change. As we read in Chapter 12, Communication and Change, “the word change seems to invoke feelings of anxiety, hostility, and frustration.” Most people feel secure in their current positions and fear that a change will alter their position or status for the worst.

As discussed in Chapter 13, Introducing Change, adopting new technology is a multi-step process. For a new product or service to even be taken into consideration, it must first pass three tests. First, it should have intuitive appeal. Second, it must be affordable. And third, it must give the results promised.

Recommendations

There is no substitute for face to face communication, and it is ideal that Hall, Kistler is still able to utilize that. As Ryan Schulke points out, concepts are most easily communicated in person. However, face to face communication is not always feasible with clients scattered throughout the United States and the world, members of committees overlapping, and partners and managers frequently working out of the office. It can, nonetheless, be improved upon.

When communicating with a client, instead of so much email, Hall, Kistler could use weblogs. A weblog could be set up for each client account. Weblogs, as described on this site, are “web applications which contains periodic, reverse chronologically ordered posts on a common webpage.” Rosalyn Acosta considers weblogs to be the “spin-off” of emails. As developments are made, they can be continually posted to the blog. The client would also be able to respond this way as well. Blogger is a great way to create weblogs. It is free and easy to use. If aggregators were also utilized, this would much more efficiently allow the individual working with the client to keep track of posts, instead of constantly checking the email inbox. As Elizabeth Rodriguez explains, an aggregator, such as Bloglines, can “alert the reader of the newest updated blogs he or she has subscribed to. Unlike e-mails, it gives you a brief summary on the author's post showing you if the author has answered your question or not.” This would clear out some of that inbox clutter as well, while providing the ability to archive previous posts, if there should ever be a need to go back to that information in the future, possibly even with different client in a similar situation.

The different committees at Hall, Kistler could also benefit from the use of weblogs and aggregators. With research being done continually, it can also be posted to the committee blog, making the information very readily available to all committee members. Another consideration for committees could be the use of wikis. Wiki, which means “quick” in Hawaiian, “is a website (or other hypertext document collection) that allows a user to add content, as on an Internet forum, but also allows that content to be edited by anybody.” As Suzanne Hudak quotes, “anyone can post material without knowing arcane programming languages. Likewise, anyone can edit them.” More can be found here, on Wikipedia, which also utilizes this technology. With the use of a wiki, members could add to information which has already been posted, as well as edit previous posts when there is a change, perhaps in an accounting issue or tax.

Having a corporate cell phone account could reduce communication costs for the firm. With most wireless companies now offering free mobile to mobile calling, it would be free for partners, managers, and staff to talk to one another when outside the office. However, this does create the burden of feeling one is “taking their work home with them,” and the savings may turn out to be only minimal. While the reimbursement system they have now seems to be working just fine, if an employee has an unusually high bill for one month, perhaps from extended phone calls while out of state, they would be forced to pay that out of their own pocket until reimbursed. The partners may want to consider giving each staff member a stipend for calls each month, which will be paid by the firm, with everything else being paid by the individual.

Feedback/Response

I presented my recommendations to managing partner, Mike Eberhart. The following is his response:

“Michelle, the suggestion about a corporate cell phone account is something that we will definitely look into because we do call one another often, and we are probably using minutes on 2 plans. Although the firms total cell phone bill is not that great, it is still an area where we could be saving money.

Your suggestion about the Blogs generally will not be any more efficient with clients than our existing email capabilities; however, it might be a good way to make our committees more up to date. It would also have all the committees’ discussion about a particular topic available anywhere we have internet access. As you stated, change is difficult to accept, and for that reason I would not want to start putting clients on a Blog. If we start with small steps, such as the committees, and learn the benefits internally first, we might see other applications for the Blogs. It would also free up some of our server hard drive space. We have been attempting to free up server space by going to online research materials. For example, we can do tax research any where we have internet connectivity; likewise we just switched our Audit and Accounting research to online research materials.

Side benefits to utilizing online research materials would be that we would have all research materials up to date, and we would no longer have to manually file updates, making the administrative staff available for other tasks.

Another reason we probably will not use Blogs for clients is because we have a Virtual Private Network (VPN) available to us. With the VPN we are able to get into our server anywhere we have internet access. We can also connect to our desktop remotely any where we have internet access. In other words, I can work off my desktop at home or at the client’s office. The only draw back is you need high speed internet access or else the response time is slow.”

Conclusion

Weblogs, wikis, and aggregators are all very useful in posting and sharing information. Unfortunately, these things are currently only used in small communities, with vast expertise of the services provided by each application. Typical businesses and organizations do not seem to be ready for these technologies, probably mostly because they are virtually unknown in the greater arena.

Tuesday, September 14, 2004

Here I am!

Well, here it is - my first post!