You Call This a Recession? Over $200,000 in New Billing over the Past Year!


Joseph Pancerella, CPA 

Reading, PA

One year ago starting in October 2009, Joe Pancerella, a CPA from Reading, PA, decided to do something positive about the declining economy. Rather than sitting back and waiting to see what would happen and hoping for the best, Joe decided to be proactive and make it happen. We interviewed Joe a few months into his program. We wanted to revisit his success and see how much he has grown after one year of running the NCI Plan 2 Client Acquisition Program. Just wait until you see what is possible, even during the current recession.

What prompted you to do business with NCI?

Joe Pancerella, CPA

Joe Pancerella, CPA

What prompted me to do business with NCI was that with the economy slowing, we knew that was going to affect our clients. We had decided to go ahead and start a marketing program so we could have a system in place to allow us to replace and add to our existing client base.

And here we are a little over twelve months later. Can you share with our readers what you have been able to accomplish since starting the Plan 2 program? To be even more specific, how many clients have you obtained from the program in that time frame?

Hang on, let me see. Okay, we’ve added 112 new clients.

That’s impressive. Many accountants that we talk to criticize the NCI program for only getting small clients. What are your thoughts on that statement?

I suppose you have to define what a ‘small’ client is. It also depends on what you’re looking to target. Now, we have gotten some large clients from the program. The largest client that we’ve gotten so far is a 17 million dollar manufacturing company. We also secured a 2 million dollar medical device business in Philadelphia. Those aside, yes you are going to get some smaller clients. If that’s a criticism then here is another, the NCI program also doesn’t pick up your laundry. Do you see what I’m saying?

I do, if you’re growing by a lot of small clients or a few large ones, what’s the difference, you’re still growing your business.

Exactly, you’re still growing and that is the bottom line.

With some of the smaller clients that you get from the program, are you finding them to be profitable?

Sure. We’re here because I’m not doing the work. The work that we’re selling is work that I can have my staff prepare. So yes, of course it’s profitable because I’m not the one doing it. My job is not to reconcile a bank account. My job is not to go out and fill out a checklist for an audit or a review. My job is to run a company. In order to do that I’ve got to bring on work that is not at my skill level.

Then you can delegate that work to your staff and that allows you to focus on the bigger picture of running your firm.


Can you tell me what your gross billings are as of November 1, 2010?

You know what, I think we just passed a million.


Thank you, yeah we did and I was going to send your dad an email when we hit that. When we started the program we were about an $830,000 firm, and now the actual figure is just over a million.

That’s amazing. A lot of accountants that consider doing the Plan II program as you did are concerned about cash flow during the first year. So how has the program worked out for you in terms of the cash flow during the first year?

Here’s what you’d need to look at that: you’re concerned about cash flow with the NCI program. Are you concerned about cash flow without the NCI program? Are you telling me that without the NCI program you had no cash flow concerns at all? Because making that statement is based upon the assumption that the NCI program drove your cash flow concerns. I will tell you prior to starting this; we had some cash flow concerns. Our accounts were going to be dropping because of the real estate market crash and the downturn in the economy. That’s a real cash flow concern.

I think you do need to plan properly, I will say that. The spreadsheet of projections that NCI gives out says what your start-up costs will be, I think that’s good. I think they’re good measures, I know we took that and modified it because we were going to do some additional things. In our situation we planned on spending more than what was projected, and we were hoping that if it broke even after 12 months it would be a success. We started the program in October and it broke even by February. It took five months for the program to break even. So I don’t think that’s valid, I don’t think you can say this program in and of itself is a cash flow problem. If you have a cash flow problem after implementing this, believe me you have one prior too. What would you like to do about that problem? Would you like to spend more money and possibly improve it or would you rather just watch the cash go away and complain about it?

The irony of that argument is that in doing this program it’s supposed to alleviate your cash flow problem. So obviously you would say that the program’s results thus far have easily paid for the costs?

Of course they have. My concern right now is this practice we’re going to buy – is that going to cover the costs?

When you build yourself you start to look at buying a little differently, because you pay a premium for somebody else’s clients and sometimes their problems.

That’s correct.

Okay. What about going forward here, Joe? Where do you feel you’ll be one year from now based on your goals and the prior year’s experience running the Plan II Marketing Program?

Honestly, if we do 15-20% growth per year, I think that’s more than comfortable. What we’ve done recently is we hired two additional staff accountants so we’ve basically brought on excess capacity. Our goal within a six to nine month period is to get those additional staff accountants up to full capacity.

Tim Klein, your CSR, been doing a heck of a job obviously.  What would you say is his strongest attribute?

I feel that he can close a transaction but not do it in a high pressure way, we didn’t want to do that. I think that’s what he’s good at. He understands the product enough to close it and he knows his strengths and weaknesses.

Right and that is very important. It’s designed to be a low-pressure sales environment. At the same time, low pressure is great but you need to be able to sign up business and make that close. I know that you’ve purchased several practices to grow as well, how would you compare the return on your investment in buying those businesses versus building through the program?

The return on investment of building through the program is obviously better because for example this practice we just offered on, we offered a multiple slightly higher than one. If you look at our experience with the Plan II program, again we budgeted about $90,000, which is higher than what NCI recommends, and we brought in $200,000 worth of work. So that’s an investment of $90,000 in return for $200,000 so we more than doubled our return on investment. You’re getting in excess of 100% return on investment whereas I think when you’re buying a practice we look more at a 20-25% return on investment. It’s just pure cash flow – spend 90 and get 200 versus spend 200 and get 200.

On to another topic, you are now the instructor of our Advanced Processing Seminar. Could you tell our readers what they could hope to learn by attending this two-day seminar in practice management, and also why you feel qualified to teach this course?

I think the way NCI did it was very nice in that they still provide a recorded version of the Duane Gravely course [Editor's Note: Duane Gravely developed and taught the APS until fairly recently] and then I teach the live seminar. What I do is I teach the Duane Gravely method about 75% of my course because about 75% of my practice uses that method. We also have some additional services and we do some more technically current things than what Duane does, so I go over those methods as well. For example, I’ll say here are some alternative ways to process for when you have clients that want to use QuickBooks out of their house or for when you have hybrids where they’re going to do their invoicing but you’re going to enter their checks and their payments. I also go over pretty extensively how to process tax returns at the end of the year and have a really nice systematic method for doing those. The important part of this is that the marketing program is going to bring on work, how do you go ahead and process that type of work? And I think it’s a nice combination of teaching Duane’s methods and then showing some things that we do differently.

Why am I qualified to do it? I’m qualified to do it because first and foremost I don’t look at an accounting practice as “I am a CPA first.” I am a business owner first. And as a business owner my responsibilities are to grow a practice, to make sure it’s profitable, to analyze our numbers and in doing that I look at things differently. I don’t look at it from a standpoint of the accuracy of the 1040′s and along those lines. That’s important but I look at it more from an operational efficiency standpoint, and that’s what I try and teach. I think it’s important to look at these businesses that way.  I’ve had extensive experience in operational management. So that’s why I think I’m qualified, plus I’m doing it everyday. Finally, I took a $250,000 accounting practice and just grew it to over $1,000,000 in six years. That’s got to count for something, doesn’t it?

Absolutely, and you also added over $200,000 in new business over the past 12 months, that’s not an easy thing to do, incorporating that kind of new growth to an already established practice.  That’s not an easy feat, plus crossing over the million dollar milestone; you’re in the NCI Million Dollar Club now, so congratulations and welcome. You’re certainly more than qualified and I know that in the first seminar you just had, the surveys were off the charts in terms of people’s response to the teaching and training. We’re happy to have you teaching the APS.

Good, well thank you. Honestly I’m just really excited about teaching those seminars, I’ve always wanted to talk about how the profession as a whole needs to look at it like a business, it needs to come about as a business and not look at it as a glorified job

There are a lot of people out there that do it that way, the entire time they’re working in that way, and that’s not what owning a business should be about.

No, but what’s nice about the accounting profession is the flexibility it gives you. If that’s what you want to do, you certainly can. If you wanted to start this NCI program and you just wanted to hire a bookkeeper to do overflow and you wanted most of the work, you sure could. That’s not too bad and I think that’s a nice flexibility.

One last thing, Joe: when and where is your next Seminar?

The next advanced processing seminar is in OrlandoFlorida. What makes it even better is it’s smack-dab in January, and of course it’s going to really upset people to be in Florida in January! The next dates are January 17 and 18, right after the Practice Development Seminar. I’m looking forward to it and I’m in the process of rewriting some items for the course.

Excellent, alright Joe, that’s all I have for you. I really appreciate your time and your kind words. Here’s to another great year for you and your business.

Okay, thank you very much. I appreciate it.

Click here to watch Joe’s video testimonial

Editor’s note:  Joe just finished teaching his first Advanced Processing Seminar this October. We ask all participants to rate the training on a scale of 1 to 10 with 10 being excellent. Joe received all 9′s and 10′s and one 8 from the attendee’s.

Chris Clark is the oldest son of New Clients Inc. founder and CEO Bruce Clark. He has worked as a Senior Account Executive at NCI for the past four years. During that time he has presented at the Practice Development Seminar on Internet and E-mail marketing and he also plays the prospective client during the seminar role play sessions. Chris also edits and contributes to the NCI newsletter, New Client News.