Organizati

&
on
Management
OF MAS
Practice
Review if you wish to be a consultant: Services may be technical consulting in:

• Communication Skills • Engineering

• Industrial Management
• Sales Ability
•
Consultant
Focus on a project and • Marketing
A person who provides expert advice and unbiased
• Business Management
finish it
opinion for a fee.
• Maintain Objectivity • Financial Areas

• Business and
Do not accept work outside the firm’s
Professional Judgment capabilities.
CONDUCT A MARKET RESEARCH TO IDENTIFY
OPPORTUNITIES IN THE MARKETPLACE

This involves:
1. Study of the LISTINGS of management
consultants
2. SURVEY of local CPA firms
3. Determination of POSSIBLE SATURATION of
consultants
4. Identification of NEW SERVICES

Every practice needs to have a continual flow of work and

steady stream of new opportunities and new contracts.
Staff Pyramid and Fee Structures

Level Billing Rates

1 P10,000 – P20,000
2 P8,000 – P10,000
1 Partners, Principal, Director
Senior Managers,
1-3
Managers, Supervisors

Senior Consultant,
3 P5,000 – P8,000 1-5
Seniors

Associate
4 P2,000 – P5,000 2-6
Consultant,
Staff
• Partners, Principals, Directors
The most experienced and highly paid professional.
Responsible for the successful completion of engagements,
dealing directly with clients and for selling work

• Senior Managers, Managers, Supervisors

Perform week to week management of engagements
Responsible for identifying new client prospects and
assisting
in the sales process

• Senior Consultants
Have 2-3 years of consulting experience
Supervise the daily work of the younger staff

• Associate Consultant, Staff

Have less than 2 years of consulting experience
May have been hired directly out of graduate or
undergraduate school
DEFINING THE TARGET LEVEL OF COMPETENCE
ESTABLISH AN OPERATING PLAN
OF MANAGEMENT CONSULTANTS
S e t G o a l s a n d O b j e c t i v e s

CONSULTING
COMPETENCE
• Desired Income Level
Ability of a consultant to deliver specific agreed-upon
• Potential Clients
consulting services to a client on a profitable time-
and-fee basis observing professional standards
• Strategies to obtain those clients
 four
1.
Major Factors
Scope of Practice Area
2. Service Variety
TO CONSIDER WHEN DEFINING THE TARGET LEVEL OF COMPETENCE

3. Client Requirements
4. Service Delivery Capacity
 Scope of Practice Area
Four Factors:

1. Scope of Practice Area

2. Service Variety

3. Client Requirements

4. Service Delivery Capacity • REVIEW the economic region

• INVENTORY the services

• SELECT services

• ACQUIRE competence

• NOTIFY clients and potential

clients
 Service Variety
Four Factors:

1. Scope of Practice Area

2. Service Variety

3. Client Requirements
• Planning, control, and reporting
4. Service Delivery Capacity

systems
• Operational computer system
analysis, design, and evaluation
• Specialized technical services
 Client
Four Factors:

1. Scope of Practice Area

Requirements
2. Service Variety

3. Client Requirements
Assess the ff. questions:
4. Service Delivery Capacity
1. Will fully implemented services be turned
over to the client ready for use?
2. Will the service require changes or
adaptation?
3. Does the client belong to an industry
with special characteristics or
problems?
4. Does the client have special financial or
growth problems?
Four Factors:

1. Scope of Practice Area

Service Delivery
2. Service Variety

3. Client Requirements
Capacity
SERVICE
4. Service Delivery Capacity

•
DELIVERY
Phases:
Set objective, identify problem, predict
Application of consulting skill and
benefits, gather facts, means of
without this, even high levels of
delivering the services
knowledge and understanding cannot
• Adapting and beginning services
be put to effective use for clients
• Implementing these services to the
client’s satisfaction
• Evaluating the results in operation
 Management of MAS
Practice
Steps in starting the MAS Practice

1. Determine and make a list of services that one can truly offer.
2. Review a client list and prepare a package tailored to fit the
firm’s competence.
INITIAL PACKAge
3. Consists
Prepare aofline-up ofthat
services MASarePersonnel.
closest to the
4. conventional accounting
Seek out advisory function
engagements.
 Sources of MAS
Engagements
• Referrals from other CPAs

• Referrals from audit clients

• Referrals from businessmen

• Referrals from financial and

government institutions
• Referrals from legal and other
professional firms
MARKET OPPORTUNITIES

1.P r i v a t e S e c t o r
2.P u b l i c S e c t o r
3.G r a n t C o n s u l t i n g
 Private Sector
• Individuals
How to save money or how to make money

• Small Businesses
High failure rate

• Medium-sized Businesses
Constantly going through stages of growth

• Large Companies
More difficult to obtain contracts
 Public Sector
Government

• Read government advertisements

and publications
• Place your name on the government
mailing list
• Contact government contract
officers
• Contact friends and acquaintances
who work in government
 Grant Consulting

Grant
• Identifies the specific needs of an

Consultant
organization or company and advices
them of the availability of
Attempts to obtain grants,
government funds
loans, or subsidiaries for a
• Perform analysis, collect all
client
necessary detail for documentation
• Prepare application for signature by
an authorized representative
 PROBLEM AREAS IN RENDERING MAS
BY AN INDEPENDENT ACCOUNTING FIRM

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. Questions of regular communication between MAS

function and the rest of the firm
 Financial Management of
an MAS Practice
• Working Capital Requirements
• Office Facilities and Equipment
Requirements
• Revenues and Expenses of
Management Consultants
• Billings and Collections
 PREPARING A BUSINESS PLAN FOR MAS PRACTICE

•
Business plan
Establishes the amount of financing or outside investment
required and whenofit what
Written summary is needed.
the consultant wants to accomplish
by being in business and how to organize the resources to
• Clear goals and a well-written plan aid in decision making
meet his/her goals

• Consultant has some basis and a standard comparison to use

in evaluating alternatives presented to him/her.
 Format
• Introduction

• Business Concept

• Financial Plan

• Appendix
Organizati
&
on
Management
OF MAS
Practice
TRUE OR FALSE

1. Depending upon the practice specialty and the particular firm’s

philosophy, the structure but usually not the size of the pyramid
may vary.

2. As businesses grow in size and complexity, the demands of clients

for outside professional help decreases significantly.

3. In determining market opportunities and identifying potential

clients with accuracy and success, the professional consultant must be
very certain of his/her area(s) of specialization.
TRUE OR FALSE

4. The failure rate of small businesses is very high which oftentimes is

caused by the small business owner/operator’s lack of knowledge in
important areas of small business management.

5. If one wishes to be a consultant, he or she must first assess his or

her own talents and expertise.

6. Having clear goals and a well-written plan aid in decision-marking.

7. One of major users of consulting service is individuals in the private

sector.
TRUE OR FALSE

8. Prior to entering into a consulting practice, the prospective

consultant should conduct market research to identify new
opportunities in the marketplace.

9. A management consultant attempts to obtain grants, loans, or

subsidiaries for a client.

10. To develop a meaningful and worthwhile network, the practitioner

must establish quality contacts and educate the network as to the
type of services he/she offer.
IDENTIFICATION
 
1. This individual is normally responsible for the successful
completion of engagements, dealing directly with clients and for
selling work.

2. It consists of services that are closest to the conventional

accounting function.

3. It is the ability of a consultant to deliver specific agreed-upon

consulting services to a client on a profitable time-and-fee basis
observing professional standards.
IDENTIFICATION
 
8. This person has less than 2 years of consulting experience and may
have been hired directly out of graduate or undergraduate school.

9. It is the application of consulting skill and without this, even high

levels of knowledge and understanding cannot be put to effective use
for clients.

10. A written summary of what the consultant hopes to accomplish by

being in business and how to organize the resources to meet his/her
goals.
ENUMERATION

1-4. The Four Major Factors that must be considered when

defining the target level of competence

5-7. The scope of consulting practice may be technical

consulting in:

8-10. The 3 Broad Marketing Opportunities