I would like to preface what I’m about to write with an important note. I have the utmost respect for Ed Mendlowitz (not like he gives three quarters of a rat’s butt cheek what I think of him because who the hell am I), he is an OG of the profession, and we are all fortunate that he so freely and graciously shares the wisdom of his many (MANY) years of experience with us. He is a respected author with an impressive resume and is regularly tapped to speak at industry events because his brain is jam-packed with 40 years of accounting experience and knowledge, but you should already know all that because he’s also a regular on the Accounting Today Most Influential list, among others. With that out of the way …
The other day I came across this Accounting Today opinion piece on the importance of moonlighting for young staff written by the esteemed Mr. Mendlowitz, and to be honest I had to check the publication date because it seemed like something written in 1991 not 2021. Nope. November 2021. OK just making sure.
Let’s jump right in:
When I started, I had to work three hours extra for two nights and five hours on the weekend. I got paid for the two nights, but not the weekend. I worked hard with intense concentration, but I also had time to hustle up tax return clients. I was single and I lived at home. No responsibilities, no cares and no unfinished work when I left, on time, for the day. Today it is different, and “we” complain about the millennials. It is not them. It is “us,” but that is a different soapbox.
In the past, he has acknowledged that the problem with managing millennials is not millennials themselves but rather the ones doing the managing. So despite nearly launching into a “back in my day” diatribe, we can rest assured this isn’t going to be yet another screed on how kids these days just don’t want to work. Whew.
While he does recognize today is different, it’s important to point out just how different. When Ed graduated from college in 1963, the annual cost of tuition at a four-year public college was $243, or $2,078 when adjusted for inflation. I don’t need to tell you just how drastically things have changed since then. Anyway, moving on:
It was important for me to moonlight, and I also think it is important for today’s staff. I believe that staff who moonlight are better performers, more entrepreneurial and better engaged with clients. They take more responsibility with their work and know how to complete a job. They understand the details and the clients’ reactions to what they receive, how it’s delivered, and how to make it user friendly.
Moonlighters also know the consequences of making mistakes and become much better employees because of that. The moonlighting creates added experience, and mistakes accelerate that experience. Plus, it is not on your time! They also are more process-oriented, manage their time better and develop self-checking techniques.
So the takeaway here is that accountants who do work on the side are better at their day jobs because something something experience in dealing with clients.
He goes on to acknowledge that picking up clients on the side probably won’t even be financially viable for the young moonlighter but it’s worth it for the experience. This is pretty much the “you’ll get exposure!” that artists hear all the time when they’re approached to give away their art for free, just repackaged for the professional services environment.
In the immortal words of Ms. Kimberly Wilkins, ain’t nobody got time for that. He continues:
From a money standpoint, moonlighting might not pay for them. If they work for a firm that pays overtime, they could probably work the extra time they are spending moonlighting and make as much. Plus, they would save on the software costs, a website and portal, office supplies, postage and overnight services, and professional liability insurance, and would not need a separate PTIN number. In many respects it is not the money, but the challenge and opportunity that they can do it. When I advise people who want to leave their jobs and start their own practice, I tell them that if they have not done any moonlighting, it would be much more difficult because it is an indication to me that they are not entrepreneurial.
Bro. It’s 2021. Just getting through the day is challenging enough. Inflation is running hot at 6.2% right now — the highest it’s been in 30 years — and Lord knows accounting firm salaries have barely budged in a decade. If staff are going to do any work on the side it’s gonna be OnlyFans accounts. At least they’ll get money for their exposure and not the other way around.
At the end of all this he says that the public accounting meat grinder essentially obliterates any opportunity for staff to pick up clients on the side, which makes me wonder why he even wrote any of the above in the first place. It’s filed under “Practice Management” so we do know it’s suggesting to firm leaders to lay off staff a little bit so they have more time to work when they aren’t also working. Not like they’d listen. And if they did, I’m willing to bet most staff have approximately 10 million things they’d rather do than pick up client work, like snaking their drains or getting their tires rotated. He goes on:
In today’s world of public accounting, there is pressure for staff to work as many hours as possible, pushing all reasonable limits. This pretty much wipes out any moonlighting opportunities and also wipes out the benefits to firms of their staff performing at a higher level that they learn to do on their own dime.
So what do you think? Is he right? Are the tens of thousands of public accountants who consider their obligation to the profession as beginning and ending with their day jobs missing out on the opportunity to broaden their skill set and learn client management? Does anyone not on the partner track even care about all that? Should firms do more to support this sort of entrepreneurial spirit? Since we’re one of the few publications still with an open comment section I encourage you to use it and let us know what you think. If you have time, that is.
If I remember correctly, most firms have policies explicitly limiting their staff’s ability to do work outside of the firm so even if the staffer did have time and wanted to (and let’s be honest, the likelihood of both those outcomes at the same time is 0%) the firm is unlikely to let them. Even without the restrictions, Ed neglects the other elephant in the room, the CPA exam. Are they supposed to work 65 hours + study for 20-some hours + moonlight? This would be investment banker-level hours at less than 50% of their salary. Hard pass. And if you need to do that to be successful, why not go get paid in IB instead? If the hours are going to be terrible, you might as well get paid the most to do them.
My employment agreement said no work outside the firm. Plus studying for my CPA and trying to be a present parent and partner put paid to that.
Well, I could but then I’d be a parent 50% of the time or less.
Uhhhh…
So all the things wrong with this article on a factual basis:
1. Most firms prohibit moonlighting.
2. Most firms have not paid overtime in 25 years.
3. There is now no disconnect from work, so it is a lot harder to segregate work and home-moonlighting time.
4. There is a staffing shortage, many firms require staff work hours that make moonlighting impossible.
5. Postage, overnight services? There are no young staff members picking up clients that require hard copies. Everything is digital and returns have been e-filed for 20 years.
I don’t disagree with the premise of this article, just every statement is describing an environment that started to die when I was born.
Thanks Adrienne for the shout out and also paying very close attention to my moonlighting column. Here are some comments to add to or expand on some of what you wrote. For starters, I attended Baruch College (where I am presently teaching as an adjunct) and the cost was a $34 bursar fee per semester. I lived at home in The Bronx and took a bus to the subway to get to and from school every day. I also had a part time business to earn spending money. I was always very entrepreneurial. When I started working for real I was lucky in picking up clients. I even did the First Sergeant’s tax return in my National Guard unit and charged him $15.00 for it. As to the relative cost of tuition to today, the annual salary for my first job was $4160 which is about double the college tuition you mentioned in your article. Today’s starting salary for an accountant is a little more than double the college tuition at a State college or university, so inflation hasn’t changed this realtionship too much.
As to moonlighting most of the accountants that contact me about starting their own practices have some clients thay picked up by moonlighting. None of them are “bad” employees and when some that take the step to go on their own are strongly encouraged to reconsider by their bosses – some of whom are small firm owners and some are Top 25 firm partners. Moonlighting exists by those who are entrepreneurial, whether they start their own practices or remain with their firms. Some firms even encourage moonlighting by making available firm facilities (because it saves their employee time and that time is captured by added time at the firm).
Adrienne, you wrote a good article and thanks for including my column in it. Keep up your good work.
All the best.
Ed
So you’re out of touch and don’t know what you’re talking about anymore?
Don’t you have some boss to go whine and cry about, or hours that are too long, or not enough caring and love at your Firm, or someone isn’t respecting your preferred gender pronoun, or the CPA exam is too tough, or…… I’d weep for the Profession if you losers weren’t so hilarious
You’re the only one whining friend 🙂
Ms. Anonymous – we are NOT friends and will never be. Your generation of pussies and snowflakes doesn’t concern me anymore. My 401(k) is staked and I’m going to sit back, enjoy my days and watch you losers shit all over yourselves. Thanks for the show
Love you Ed! (I’m about 15 years younger than you-still a baby boomer!) Always read your articles-very intelligent man.
My advice to these young folks is to always maintain a “sideline”. I’ve had one for thirty years. I am always learning, the extra money is helpful, and if I ever find myself unemployed I can expand this venture.
True, I am past the CPA review stage-my children are older-so I do understand.
Just a piece of advice from an “older gal” whom was widowed at 43 with two children. It all works-trust me.
Sincerely,
Jacqueline M. Donohue CPA
Thanks Jacqueline and great going and you should be commended. Enjoy the Holidays.
I disagree with the hate this article is getting. After one has passed the CPA exam, picking up a few clients is good not for the extra cash, but it sets a barometer for your hourly worth. Doing a $500 tax return in two hours is better then working two hours of overtime for your firm, and if you have enough of those you’ll have clients and your firm competing for your time.
It also provides experience in dealing with clients. At a firm, a semi-senior may be talking to clients about missing information to finish a tax return, but getting direct phone calls with complaints, unusual questions, and shmoozing all provide more of a realistic view of what partners spend lots of time doing.
oh my god. these fucking boomers are so out of touch with reality.
Classic!!! Getting lectured by a millenidiot on reality….
I get it.
Good article but the problem at Big4 is that independence rules exist and if the firm isn’t going to risk a violation for nothing. Also, why would the firm allow you to moonlight if they could be getting those fees themselves for nothin’?
I’m surprised Mr Mendlowitz misunderstands the employee-employer relationship at public accounting firms. That is, the accounting work an employee does is for the monetary benefit of the firm’s owners. That’s codified in the employee contact. Whether that is the way it should be is another topic, not addressed in Mr Mendlowitz’s column or Adrienne’s comments.
Mr Mendlowitz’s suggestion to moonlight anyway, despite what a legally binding contract says, is surprising. Did someone not only proofread, but vet this column to the AICPA’s Code of Conduct? Perhaps Accounting Today should consider a columnist who is ethical, and also quite frankly, familiar with how the current business world works. I say this a regular reader of his column for many years and who has benefited from his advice on several occasions.
I’m spirit I agree with Ed.
In practice, none of my firms would have tolerated this. The first one I worked for would have terminated me , thee second one said when I was hired that if they ever caught me moonlighting, they’d pile more work on me until I begged them to stop.
As a gen-X’er, all I can say to Ed is that it’s a beautiful thought, but those days are long gone. Current CPA firm owners are too focused on lining their own pockets to care if their team gets the entrepreneurial skills they need.
I know moonlighting is being done and I know it is being permitted or at least tolerated. I also know at least one staff person that the bosses know are moonlighting that are being given speaking and marketing opportunities for their firm. Almost everone I speak to about leaving their job to start their own practice has done moonlighting. These are facts happening right now. To suppose or imagine it is not happening is not being in touch with reality.
I know moonlighting is being done and I know it is being permitted or at least tolerated. I also know at least one staff person that the bosses know are moonlighting that are being given speaking and marketing opportunities for their firm. Almost everone I speak to about leaving their job to start their own practice has done moonlighting. These are facts happening right now. To suppose or imagine it is not happening is not being in touch with reality.
Awesome article Ed – I worked on the side my first year at KPMG in 1992 and built a nice little side business doing so. Years later when I left the profession – my side business funded me going to PA school. I returned to public accounting when COVID started and I fully understood it was an employee’s market so I dictated my expectations and requirements. If you can’t set you own conditions in today’s job market you have bigger issues than moonlighting….
Good going. You are the type of people I was writing about. I went to a 20th anniversary party Sunday night celebrating a friend’s practice. While he was working for a Top 50 firm, he gave a deposit to a broker who eventually found him a practice. It took a while (a few years) until he was able to buy something suitable. During that period he moonlighted and built up a side practice of over $50K. I spoke to someone last week who told me he was going to start his practice this coming summer and wanted to build up his overtime at his firm so he would get a good bonus that could finance his practice and that he already had a $30K practice on the side and was expecting this to grow to $40K by the summer. He was marketing on Facebook and through pushing his clients for referrals.
Every naesayer should ask anyone they know that started a practice in the last five years about their background and if they moonlighted. I am also surprised by the number of Big 4 people that moonlighted and bought practices or joined a practice and how successful they are in handling the work since Big 4 work does not prepare anyone for starting their own practice with small clients. Also the unbearable hours preclude any free time, but they find it.