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Smith Elliott Kearns tallies 50 years of teamwork

March 31, 2013|By MEG H. PARTINGTON | megp@herald-mail.com
  • Front row, John R. Schnitzer, left, managing member of Smith Elliott Kearns & Co. LLC, and Ronald S. Kearns, who served in that position from 1989-99. Back row, Merle S. Elliott, left, managing member from 1963-89, and Edward L. Buchanan IV, who was in that post from 2000-09.
Photo courtesy of Photography by Dale

While a lot has changed in the realm of accounting since Smith Elliott Kearns & Co. LLC was established five decades ago, one vital element has remained constant.

“The accounting profession has always been deemed to be the most trusted adviser,” said John R. Schnitzer, managing member, in a phone interview from Hanover, Pa., where he lives. “We have a very close bond with our clients that has been very fulfilling and very rewarding.”

Schnitzer is the company’s fourth managing member, which he said is the equivalent of a chief executive officer. He took over from Edward L. Buchanan IV, who held the post from 2000-09. The other managing members were Ronald S. Kearns, who served from 1989-99, and Merle S. Elliott, who was in the top post from 1963-89.

Smith Elliott Kearns & Co. began operations in March 1963 in Hagerstown when founding partners Elliott and Earl J. Smith combined their practices. Smith died Feb. 25, 1994.

The firm offers auditing, accounting and payroll services; tax return preparation; and business, financial and estate planning.

Schnitzer has been with the company for 27 years. When he started, tax preparation was done with pencil and paper, but now it is fully computerized.

“Technology has been a huge factor,” said Schnitzer, who, like the company for which he works, is marking 50 years of existence this year.

He said technology allows work to get done more efficiently and has enabled the firm to expand its geographic reach without opening other offices. Schnitzer said the company has more than 5,000 clients being served by its four offices in Hagerstown, Hanover, Chambersburg, Pa., and Carlisle, Pa.

Schnitzer said he does not believe the firm has been hurt by electronic tax filing because the laws change frequently and get more complicated, so many people are afraid to do their own taxes.

Accounting is very competitive, and “There’s a lot of mergers and dissolutions,” Schnitzer said, which makes Smith Elliott Kearns’ 50-year anniversary all the more extraordinary.

He said it’s hard for independent companies that are locally based to stay afloat. The midsize firm is competing with one-person operations for small-scale work like personal income taxes and with national companies who are vying for big companies as clients.

Ed Warren, director of marketing, said the company also competes with other firms for regional and auditing work.

Schnitzer said about one-third of Smith Elliott Kearns’ business is in auditing for industries including nonprofits, government, banks and health care. The remaining two-thirds is in tax and consulting work, including bookkeeping and payroll.

He said about 90 percent of the clients are within about an hour of one of the company’s four offices, though it does do tax returns for clients in all 50 states.



The secrets of longevity

The close proximity of staff to clients is one of many reasons for the company’s longevity.

“We are very community based,” Schnitzer said, since many of its 150 staffers work in the towns in which they live and many volunteer in their communities.

The company has maintained independence and objectivity by not selling financial services products like insurance and money management services, according to background information provided by the company.

Asked if lacking those products has put Smith Elliott Kearns at a disadvantage, Schnitzer said, “It’s actually helped us.”

He explained that the firm often works with clients’ attorneys and insurance agents, who know “we’re not going to steal their work.” Not selling such items “lets us focus on what we have been trained to do” and not worry about being a jack-of-all-trades, he said.

That cooperative approach to business starts in-house, said Warren, 49, who lives in Fayetteville, Pa.

Warren said there is a “spirit of collaboration” between Smith Elliott Kearns’ 22 members, who range in age from 30s to 60s.

It’s not uncommon for firms to be dominated by one or two individuals, but at Smith Elliott Kearns, many decisions are made among the members as a group, Warren said.

With a mix of baby boomers, Generation Xers and Millennials leading the company, Schnitzer said open-mindedness and a willingness to listen are essential to the company’s success. He said the older members readily listen to the ideas of their younger counterparts because they view them as the future of the company.

The members are managers, but their partnership with the staff has been another key to the firm’s success.

“It’s more of a team environment,” Schnitzer said.

“The kind of work each person does is specific to their skill set,” he said, explaining that some staffers specialize in payroll or tax preparation, while the members handle higher-level consulting work, manage projects and oversee higher-risk audits.

Employees work closely with the firm’s clients and report to one of the members. Some clients work with more than one member from the firm, possibly consulting with one for taxes and another for audits, and also might have several staffers assisting them.

Those tiers of service helped Smith Elliott Kearns be named one of the top 200 certified public accounting firms in the United States multiple times, an honor bestowed by Inside Public Accounting magazine. Schnitzer said that is no small feat, since there are 40,000 members of the American Institute of CPAs.

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