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June 1992

How to set up a client database. (The CPA Manager)

by Bertelsen, Rhea M.

    Abstract- Ensuring the maximum efficiency of the client data base of an accounting firm requires careful planning. The focus of database planning is on software selection, program implementation and database maintenance. Consideration should be given to the software's uses as a client directory, a staff directory, a tax compliance data directory and as a directory of accounting services rendered to clients. When choosing a database program, it would be helpful to use product reviews, peers and demonstration disks as reference sources. The compatibility of the software's hardware specifications to existing office computers and to currently used software should also be checked. The price of the software product should be considered in reference to the functions and applications it offers. Program-supplied tutorials and manuals should prove useful during software implementation.

Software Selection

The current software market for IBM and compatible computers is abundant with solid database programs to handle just about all of your needs. In fact, with so much available, it becomes a real chore figuring out what will best serve your needs. Here are guidelines to follow in making a decision.

* Ask around to avoid the real software disappointments. Peer reference can be an excellent method, except that each firm probably has unique preferences and staffing capabilities.

* Read at least two comprehensive product reviews--preferably one by a computer magazine and one by a professional accounting journal. Make sure the review is recent and note the software version that is being analyzed. A product that may have been superior two years ago may only be average today.

* Obtain a demonstration disk and have several knowledgeable people view the demo. This is the best way to get a hands-on feel for the program and its user friendliness.

* Inquire about the type of training the program provides. Is there a hands-on tutorial? Does the reference manual look complete? Are training sessions offered by the software company or provided by other educational institutions? If so, what is their cost? Also, is there a user's group in your area or a published newsletter? Will you get free product technical support? If so, for how long?

* Do not overlook the following questions:

1. How often does the software company revise its programs?

2. Does the revised version allow for easy existing program conversion?

3. What do the upgrades generally cost?

* Make sure you match the hardware requirements prior to purchasing the program. Ask the following questions:

1. How much memory does the program require?

2. How much disk space will the program use on your hard drive? If you do not have a hard drive on your computer, you must find out if the program will operate smoothly on floppy disks.

3. Will it work with your level of MSDOS?

4. Does it work in color?

5. Will it work with your printer, and are the print drivers provided with the program?

* Check on existing software compatibility and interface methods. You certainly will want to allow yourself the flexibilitv to merge information with your word processor and your favorite spreadsheet. The program may also convert a DBase or Lotus 1-2-3 file to its own format.

* Weigh the price of the product against the features it has and the functions it can perform. It is this area where some of the computer magazines excel. Buy as much computing power as your firm can afford and reasonably utilize. Remember, you are investing in the efficiency and profitability of the firm as well as meeting the demands of your partners and the profession. Therefore, you want a product that you can stick with for quite some time.


Most programs offer tutorials to help you become familiarized with the program. You should allow three to four days for this learning process. You may have to repeat the more advanced exercises at a later date since the material can be a bit overwhelming at first.

Read the Manual This may be by far the most difficult task to accomplish. If you cannot read the manual completely, your next option is to get thoroughly familiar with its various sections. This includes any appendices and especially any addenda. Keep the program's quick reference card handy, and mark the reference manual's page number on it so you can quickly get more information on a feature when you need it.

Design You are finally ready to proceed with the overall design. Take time to sketch out on paper how you want to organize the database, including prototypes for data forms. After finishing the tutorial, you will have some ideas on how to begin. In order for your database program to tie your forms together, you must make sure you include a common field in each form. This common field will almost always be a Client Code or Staff Code. These codes should be identical to the present codes you use for billing purposes.


Once you have a client database in place, you need a systematic method to maintain it. One way is to institute a mandatory procedure under which the staff receives a printout of client data in the database one month prior to the client's year end. Thus, while the staff is working on the year-end engagement, it can use, update, and correct client information. Each form you develop might contain a field called "date entered." The purpose of this field is to let the user know how current the information is. This provides the ability to retrieve old records and make a concerted effort to update those files. You should not allow your database to become outdated.


Typical applications in a client database are as follows:

* Client directory;

* Staff directory;

* Directory of tax compliance information; and

* Directory of accounting services provided clients.

Client Directory. As the name indicates, this form is for collection of basic client data used for mailing, telephoning, and preparing client code lists. The client code is always an indexed field which allows for faster sorts. If you do bulk mailing, you will also want to index the zip code field as well.

Staff Directory. The staff directory form enables you to compile basic employee information. This directory centralizes necessary personnel data, allowing you to casually update it as well as providing emergency contacts. Additionally, if you include salary and billing rates, you can begin to formulate the basis of building firm income and billing projections.

Most database programs allow you to shield sensitive information by using passwords, which distinguish different levels of security. This allows you to utilize entry level or clerical staff to maintain and run basic reports.

Advisor. The purpose of this form is to centralize information about the client's advisors in one place. This is a valuable aid to assistants who are instructed to mail financial data to the client's attorney, banker, pension consultant, etc. While the information can often be found in the client's work papers, much time is frequently wasted by looking through files and work papers only to find out it's not there. Please note that this file can have multiple records per client, and therefore, it can permit you to list an unlimited number of advisors per client. You now have a "mini database" of professional consultants that you can develop into an important marketing tool to acquire new referrals.

Taxes. A solid tax due-date list is a must. This is probably one of the main reasons for building the database in the first place. Because you will want to sort this data often, you should include and index the following fields:

* Client code;

* Year end;

* Due date; and

* Extended due date.

Accounting Services Every firm needs to know about the accounting services it provides. Your database can include a file which will capture such information as the types of tax forms and financial statements prepared. However, it can contain marketing and computer processing information as well. This may be the most challenging, yet the most innovative part of your database design. You will be able to manage your practice more efficiently once you piece together the many services you provide.

A Major Management Tool

With an appropriate database in place, your firm will be ready to reap the benefits from your system design. Most database programs have made an effort to give the option of running "quick" uncomplicated reports. First, enter a small representative sample of client data into your database. Next, let your partners and managers review the report and make suggestions for improvement. You can also customize the menu for an individual. The tax manager for instance, will have the ability to run the report at his or her convenience.

The real beauty of a client database is that it offers control over how it is designed, how it is maintained, and how you can procure valuable information on a timely basis.

Reprinted with permission from The Michigan CPA, Summer 1990.


By Robert Denney, President RobertDenney Associates, Wayne, Pennsylvania

It has been stated often that running a firm is different from running a business. That's true to some degree. But it is also an excuse for the poor management that exists in many firms. Anyone with experience in managing companies and firms knows that there are far more similarities than differences. It is the similarities that are important. Based on our experience, we have developed these ground rules for running a firm or any other business or organization.

Ground Rule #1: People, not structure, make the organization work or fail. Adopting organizational concepts just because they are theoretically correct or have worked at another firm is a mistake. A firm must evaluate its people. Dedicated and competent people can make almost any structure work; incompetent people will be ineffective regardless of the structure.

Ground Rule #2: With age, people reach a point where their energy levels or capabilities fall below their job responsibilities. This is natural; it happens to all of us. And when this happens, the firm has an obligation to provide opportunities for these people to continue to contribute in a meaningful way. If they can no longer pull their weight, then they must be removed from the mainstream. On the other hand, advancing age b.v itself is not a valid reason for removing anyone. There is nothing more wasteful than pushing an experienced person aside simply because the calendar has advanced.

Ground Rule #3: Every person in the firm should know what is expected of them, how their role fits into the whole, and how their performance will be measured. The ultimate payoff should always be for achieving results, not just for making the effort. Those who perform well should get greater recognition and reward. Those who don't must expect limited rewards, lesser responsibility, and even dismissal. Sub-par performance and attitude drags everyone down and hurts the firm.

Ground Rule #4: Most committees are a complete waste of time. A committee may be useful where a cross-sectional approach is essential or an oversight function is too much for one person to handle. But most firms have far too many committees.

Ground Rule #5: Establishing a solid strategic direction is critical for formulating a good business plan--and good planning is the key to good results. Too often firms develop long-range plans that are merely extrapolations of the past. They don't define the firm's fundamental mission or recognize market realities. Therefore, a prime responsibility of management must be to establish and maintain the strategic focus of the firm.

Ground Rule #6.. The business plan must be in writing--and it should be short. Regardless of its complexity, a good plan properly thought through, can be written in a few paragraphs. Please note, that's paragraphs, not pages. Most firms spend too much time on the plan itself and have no energy or enthusiasm left for implementation. Ninety percent of the benefits of planning usually come from the first 20% of the effort. The rest just makes everyone feel good. Take the first 20% and run.

Ground Rule #7: A commitment to achievement is essential. Managers should never be pressured into making unrealistic commitments. But once commitments are made, they should always be fulfilled.

Ground Rule #8. Keep priorities straight. Managers will always have more to do than they can possibly get done. Having priorities and keeping them straight is the only way to make sure of doing the important things first.

Ground Rule #9: Active managers make things happen their way. They always know what is going on. They cut across or through organizational lines and talk to anyone without anybody else's advice or permission.

Ground Rule #10: No manager should ever grab the credit for success. Conversely, however, every manager must shoulder the responsibility for resuits that have gone sour.

Ground Rule #11: A good manager creates a healthy environment that permits people to work effectively, develop themselves, and achieve their aspirations. This does not mean trying to make everyone happy or making work easier. It means fostering an environment that has absolute honesty and integrity, a genuine interest in addressing and correcting problems, and pride in accomplishment.

These rules are not easy. But successful firms, businesses, and other organizations follow them.

By Rhea M. Bertelsen, CPA, President of Comsoft, Inc.

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