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Copy of Chapter 6: Organizartion and Management of MAS Practice

For our Management Consultancy report
by

Katrina Castro

on 22 August 2013

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Transcript of Copy of Chapter 6: Organizartion and Management of MAS Practice

Organization and Management
of MAS Practice

Chapter 6
Developing MAS Practice
Skills?
Ability?
Professional Judgement?
Engineering
Industrial Management
Marketing
Business Management
Financial Areas
a. study of listings of Management Consultants.
b. survey of local CPA firms to determine which are offering consulting services.
c. determination of possible over saturation of consultants in one's specialty area.
d. identification of new services that may provide a competitive edge
Opportunities in the Marketplace
Field of Technical Consultation in:
Goals and Objectives should include:
Strategies in obtaining Potential Clients
Potential Clients
Desired Level of Income
Scope of Consulting Practice
Firm's Background
Expertise
Experience
Building Successful Network
Client Newsletter
Articles
Seminars
Entertainment
Periodic Phone Calls
Organization of MAS Division
Should periodically assess its needs with respect to in-house knowledge and skills.
Should deficiency exist, the consulting firm can:
Employ additional consultant with adequate knowledge and skills; or
Undertake a variety of "staff development" activities that are intended to endow the presently employed consultant with needed knowledge or skills.
Staff Pyramid
1
1 - 3
1 - 5
2 - 6
Partners, Principals, Directors
Top of the Pyramid
Most Experienced and Highly paid professional
Responsible for the Successful Completion of the Engagement
Activities include:
Practice Planning
Administering and Developing Practice
Consulting with top-client managers
Approving engagement reports
Managing Client Crises
Senior Consultants, Seniors
Capable of supervising the daily work of the younger staff.
Possess the right combination of experience and dedication to complete different projects with limited supervision.
Senior Managers, Managers, Supervisors
Performs week-to-week management of engagements
Responsible for identifying New Client Prospects
Assisting in the Sales Process
Activities include:
Planning Engagements
Evaluating Consultants
Supervising Consultants
Writing Proposals
Reviewing Working Papers and Reports
Consulting with Client Managers
Serves as an expert in one or more applied knowledge areas
Associate Consultant, Staff
Individuals who are inexperienced or those who are directly hired after graduating
1
2
3
4
Fee Structure
Php 6,000 to 12,000 per hour
Php 1,200 to 2,000 per hour
Php 2,000 to 3,600 per hour
Php 3,600 to 6,000 per hour
Defining the Target Level of Competence of Management Consultants
Major Factors to Consider in defining the Target Level of Competence
Scope of Practice Area
Service Variety
Client Requirements
Service Delivery Capability
1. Review the Economic Region in which the consulting firm draws, or expects to draw, most of its clients.

2. Inventory the Service required by the existing client, and in most cases, by the clients the consultant would like to add.

3. Select services from this inventory that will be provided.

4. Acquire the competence needed to provide the selected services

5. Notify the clients and potential clients that the consulting firm is able and willing to perform the selected advisory and consulting services
Steps in Achieving Growth:
Planning, Control and Reporting Systems

Operational Computer System Analysis, Design, Implementation and Evaluation

Specialized Technical Services and Specific Services.
Categories of Services usually offered by Consultants:
Questions in Assessing the Review of Client Requirements:
Will a fully implemented service be turned over to the client ready for use?
These services will require more care, organization and attention to detail than other services.
Will the service require changes or adaptation?
The client must be told explicitly what to do in order to realize the service benefits.
Does the client belong to an industry with special characteristics or problems?
The service must be designed to produce satisfaction in such situation.
Does the client have special financial or growth problems?
The service should not aggravate these problems or be ineffective in their presence
1. Setting Objectives, Identifying Problems and Needed Services, Predicting specific Expected Benefits from these Services, and Gathering Essential facts pertaining to the problem and means of delivering the services.

2. Adapting and beginning the services that are to be the principal deliverables from the Engagement.

3. Implementing these services to the client's satisfaction.

4. Evaluating the results in operation, in order to determine the extent to which the anticipated benefits were received from the services.
Phases to undergo:
Steps in Starting the MAS Practice
1. Determine and make a list of services that one can truly offer with confidence of competence to perform.
2. Review a client list classified by industry, size, etc. and prepare a package tailored to fit the firm's competence and a particular type of clientele.
Initial Package
- usually consists of services that are closest to the conventional accounting function
such as Budgeting, Financial Planning Situation Analysis, Cost Systems or Studies and System Design and Installation, Offices Management and Equipment.
3. Prepare a line-up of MAS Personnel.
In the selection of the staff, the following sources may be considered:
4. Seek out Advisory Engagaments
Accounting firm's own staff

Experienced Specialists

Referral's by other CPAs
Sources of MAS Engagements
Primary Source:
Audit Client
Why?
The CPA obtains first hand knowledge of the problems confronting management with regards to the organization's activities.
Other Sources:
Referrals from other CPAs
Referrals from audit clients
Referrals from businessmen
Referrals from financial and government institutions
Referrals from legal and other professional firms
1. Questions as to the effect of the practice of MAS on the firm's independence.

2. Development and Maintenance of a high level of competence in MAS.

3. Questions of what fee to charge.

4. Questions of AUDIT-MAS cooperation in obtaining engagements.

5. Question of regular communication between the MAS function and the rest of the firm.

Potential Problem Areas are:
Problem Areas in Rendering MAS by an Independent Accounting Firm
Initial and Basic Requirements are:
Financial Management of an MAS practice
Working Capital
Office Facilities and Equipment Requirements
Revenues and Expenses of Management Consultants
Billings and Collection
Why Prepare one?
Preparing a Business Plan for MAS Practice
Illustrative Sample of Income Statement of a Small Consulting Practice
Most consultants prefers to be a consultant. Being an owner comes next.
Planning and Management skills are essential to successful business.
Those who don't plan has a high risk of failure.
What is a Business Plan?
- A business plan is a written summary of what the consultant hopes to accomplish being in business and how to organize the resource to meet his/her goals.
Format of a Business Plan
Introductory Page
Financial Plan
Appendix
Business Concept
Full transcript