How CPAs Can Capitalize on Change
The article might be better titled “Looking Beyond Tax and Audit.” In essence, this is what CPAs must do in order to adapt in today’s accounting profession.
Relying solely on traditional core services may not provide the monetary security or the competitive advantage it once did. So where might the profession go? Can we really overcome all the challenges of tomorrow? Fortunately, we are in a position to win.
When discussing the many changes occurring within the profession, there tends to be plenty of noise, and we see some foggy weather ahead. However, it is time for us to be optimistic and shore up our footing. CPAs need to strive to become the most trusted advisor, a task that is both difficult and rewarding. How each firm or CPA chooses to achieve this status will be a testament to their own creativity and determination. To become the most trusted advisor, firms and individuals will need to build skills and knowledge outside of the profession’s traditional services.
The most seasoned and experienced members of the accounting profession are set to retire in the coming years, maybe taking their knowledge with them. Mounting fee pressure, compression of deadlines and difficulties in cultivating future leaders all present unique obstacles for us to better serve our clients. As CPAs, we need to find creative solutions to overcome these issues while managing the usual changes to the tax code and accounting standards.
What will CPAs need to do if the traditional tax, accounting and assurance services are not enough? Contemplate a world where advanced technology, such as a super computer or a robot, is able to perform most of the profession’s traditional work. This world is not so far-fetched anymore. Firms and CPAs ought to be discussing the threat of external technological advances to their practices. Just look at how traditional yellow cabs have been impacted by Uber. Fortunately, there probably is still some time before computers truly master the tax code and GAAP. Nevertheless, the possibility increases each year.
Computers will most likely not come equipped with empathy any time soon. Focusing on building a strong relationship and accomplishing our clients’ goals will remain a key differentiator. Providing timely feedback and advocating for our clients can further assist with our positioning.
Clients already entrust us with some of their most sensitive and valuable information. Firms and CPAs can use this information and insight to provide value-added services such as asset protection, disaster planning, data security and wealth advisory. For example, while preparing the tax return, you may need to analyze the activity of the client’s brokerage account and report it correctly. Why not take advantage of this opportunity to assess the client’s asset allocation? This conversation could spill over into other areas such as life insurance and wills.
While performing the many tasks required for our clients to comply with the IRS or GAAP, think about how else the information we have at our fingertips effects our clients’ businesses and overall wealth pictures. If the audit team needs to review the company’s insurance contracts, instructing the team to bring these contracts to individuals with the ability and experience to evaluate them could prove to be very beneficial. For example, we can add value by determining if the company’s inventory insurance policy is up to date and has enough coverage for the current levels. Going the extra mile for our clients, when applicable, could limit fee disputes and create customer loyalty.
A common theme we all hear is accountants are good with numbers. Imagine a day when people say that accountants are good at communicating! Newer forms of communication, including Facebook, text messaging, WhatsApp and LinkedIn, will need to be part of the future CPA’s communication arsenal. These forms of communication have the ability to assist us with learning and understanding our clients better, but the tricky part will be determining which methods to use with each client. Regardless of method, communicating effectively and timely will be paramount. Keep in mind that an old-fashioned phone call or face-to-face meeting may still be the most effective. Digital communication methods are missing the facial expressions and body language that could be crucial to fostering a strong relationship.
The opportunity to broaden our skill base is becoming more significant with each passing day. Using our core services as a springboard to provide valuable feedback, expand our services and advocate for our clients can assist CPAs and firms with adapting and thriving in this changing profession. Regardless of technological advances and other changes to the profession, the struggle for the title of most trusted advisor will continue.
Joseph Pasquino, CPA, is a manager with Smolin Lupin. He is a member of the NJCPA and serves on the Essex Chapter board as a director.
This article appeared in the January/February 2017 issue of New Jersey CPA magazine. Read the full issue.