Organization and

Management of
MAS Practice
 COVERAGE
1. Developing an MAS Practice
2. Organization of MAS Outfit
3. Management of MAS Practice
 DEVELOPING AN MAS PRACTICE
• Scope of consulting practice: defined by
consultant’s expertise & experience
• Before entering consulting practice,
consultant must conduct market research to
identify opportunities:
1. Study listings of mgt. consultants
2. Survey local CPA firms
3. Know possible “crowding” in one’s
specialization
4. Identify new services
DEVELOPING AN MAS PRACTICE

• Practice development program: initiated to

target potential clients
• Operating plan for practice needs to be
established:
1. desired income level
2. potential clients
3. strategies to obtain those clients
DEVELOPING AN MAS PRACTICE
Note:
Based on the services one proposes to
provide, the types of potential amount of
work, the practitioner can now identify
staffing requirements and financing needs.

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 offers.
 ORGANIZATION OF AN MAS OUTFIT

• Consulting firm: must periodically assess

in-house knowledge & skills
• Should deficiencies exist, a firm can apply
these approaches:
– Employ additional consultant with adequate
knowledge and skills
– Undertake staff development activities
 ORGANIZATION OF AN MAS OUTFIT

Staff Pyramid & Fee Structures

• Staffing approach: break practice into
pyramids of 5 to 15 people (see book)
• Large practice: multiple pyramids
ORGANIZATION OF AN MAS OUTFIT

1
1 Partners
Principal
Director

Senior Managers
2
1-3 Managers
Supervisors

1-5
Senior Consultant
3 Senior

4 2-6 Associate Consultant

Staff
 ORGANIZATION OF AN MAS OUTFIT

1. Partners, Principals, Directors

- Most experienced, highly-paid
professionals
- Responsible for:
a. Successful engagement completion
b. Direct dealings with clients
c. Selling work
 ORGANIZATION OF AN MAS OUTFIT

2. Senior Managers, Managers, Supervisors

• Do week-to-week mgt. of engagements
• Also responsible for:
a. Identifying new client prospects
b. Assisting in sales process
• Principal activities include:
a. Engagement planning
b. Consultant evaluation & supervision
c. Proposal writing
d. Reviewer
 ORGANIZATION OF AN MAS OUTFIT

3. Senior Consultants, Seniors

• Supervise daily work of younger staff
• Complete projects with limited supervision
• 2-3 years of consulting experience
4. Associate Consultant, Staff
• Do much of the “dirty work”
• Usually < 2 years of consulting experience
 ORGANIZATION OF AN MAS OUTFIT

• Billing Rates:
- Level 1: P6,000 to P12,000 per hour
2: 3,600 to 6,000 per hour
3: 2,000 to 3,600 per hour
4: 1,200 to 2,000 per hour
 ORGANIZATION OF AN MAS OUTFIT

Defining Target Level of Competence

• Consulting competence: ability to deliver
services on a profitable time-and-fee basis
observing professional standards
• 4 major factors considered:
1. Scope of practice area
2. Service variety
3. Client requirements
4. Service delivery capability
 ORGANIZATION OF AN MAS OUTFIT

• SCOPE OF PRACTICE AREA

– Review economic region, Inventory the services
required by existing and potential clients, Select
services that will be provided, Acquire competence,
Notify clients.
 ORGANIZATION OF AN MAS OUTFIT

• SERVICE VARIETY
– Planning, Control and Reporting systems
– Operational computer system, analysis, design,
implementation and evaluation
– Specialized technical services: advice on new laws,
entering international markets, new economic or
technical developments, acquisition and mergers,
divestitures, economic and feasibility studies,
management audits.
 ORGANIZATION OF AN MAS OUTFIT

• CLIENT REQUIREMENTS: Ask…

– Will a fully implemented service (system or
recommendation) be turned over to the client
ready for use? If so, these services will require
more care, organization and attention to detail
than other services.
– Will the service require changes or adaptation?
– Does the client belong to an industry with special
characteristics or problems?
– Does the client have special financial or growth
problems?
 ORGANIZATION OF AN MAS OUTFIT

• SERVICE DELIVERY CAPABILITY

– Service delivery = the application of
consulting skill and without this, even high
levels of knowledge and understanding
cannot be put to effective use for clients.
– ENGAGEMENT PROCESS >> PLANNING
TO IMPLEMENTATION AND ASSESSMENT
MANAGEMENT OF MAS PRACTICE

Steps in Starting an MAS Practice

1. Determine & list services to offer
2. Review a classified client list & prepare
service package
3. Prepare line-up of MAS personnel
4. Seek out advisory engagements
MANAGEMENT OF MAS PRACTICE

Sources of MAS Engagements

• Primary source: CPA’s audit client
• Other sources: referrals (from other CPAs,
businessmen, etc.)
MANAGEMENT OF MAS PRACTICE
Problem Areas in Rendering MAS
1. Question as to the effect of MAS practice on
firm’s independence
2. Development & maintenance of high level of
competence
3. Question of what fee to charge
4. Question of Audit-MAS cooperation in
obtaining engagements
5. Question of regular communication between
MAS function & the rest of the firm
MANAGEMENT OF MAS PRACTICE

Financial Management
1. Initial & basic capital requirements:
- working capital
- office facilities & equipment
2. Revenues & expenses of mgt.
consultants
3. Billing & collection
MANAGEMENT OF MAS PRACTICE
Preparing a Business Plan
• Business plan: written summary of what
consultant hopes to achieve & how resources
are to be organized to meet goals
• Normally consists of 4 parts:
1. Introduction
2. Business concept
3. Financial plan
4. Appendix