Sunday, March 10, 2013

Don't Be a Cost Center

If there's one thing I learned from auditing, its that the back office gets paid far, far less than the revenue generators.  The closer you are to the revenue, the more you get paid.

The Big4 like to tell you that you are 'client facing' and 'front office' employees. Its bullshit. The fees that clients are charged are fixed. It doesn't matter how many hours you put on your time-sheet, the firm will make the same amount of revenue.  In fact, the more hours you enter in your time-sheet  the more 'internal cost' the job incurs.  Illogically, the more you 'bill' the client, the less 'profit' the job makes. Your salary is a cost that ought to be minimized by the firm.

Much better to align your interests with your firm's, and derive your income as a percentage of the revenue you generate, which is how partners/management of most firms are compensated. Get on the revenue side of the income statement.

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