Forward Thinking: The CPA 10 Years Out
Where will the accounting profession be 10 years from now? NJCPA members and noted experts in the profession weigh in.
Beyond advanced digital capabilities, applying analytical know-how will be one of the main skillsets of future CPAs. They will not be a new kind of data cruncher with advanced technological skills; they will have to proactively anticipate client needs, react to new business opportunities and perform daily routines with the mindset of putting clients first.
So, how do CPAs get there from here? They need to work towards being the consummate client relationship manager and trusted advisor all rolled into one. Baby Boomers and Gen Xers naturally excel at relationship building, but they will have to mentor and inform the next generation of CPAs on how to better interact with clients, garner new business and retain customers. They will have to hone, relearn or, in some cases, learn for the first time, the use of data analytics. Though it may mean losing more control over certain functions, they will have to automate anything that can be automated. Similarly, newcomers to the profession will have to enhance their people skills and their communication — abilities not normally finessed in curriculums today — though they have some of the strongest technology-based backgrounds of any generation. Together, along with their mature counterparts, they will have to understand that proactive thinking, not reactive, is how they will best respond to clients and anticipate future client needs.
Bill Reeb, CPA, CITP, CGMA, co-founder and CEO of Succession Institute, LLC, and chair of the board of the American Institute of CPAs (AICPA), says despite the inevitable changes to the profession, the current time is one of the most exciting to be a CPA. According to Reeb, “the digital era has brought about a blistering pace of change that’s transforming the world around us. This pace of change is not incremental — it’s exponential.”
“We need to reimagine ourselves and start building right now the competencies to add an advisory component to everything we do. And we need to be prepared for the reality that the bread-and-butter basic compliance work we have gotten comfortable producing will no longer be part of our job expectation and, therefore, we need to skill-up and be ready to take on highly complex transactional work,” he adds. “Yes, our future will be different, but I believe it will be exemplified by new opportunities, fulfilling and valued work, and knowing that we are continuing to make a difference for the people and public we serve.”
Learning new skills or ways to strategize is never easy but it’s an imperative for future CPAs. Reeb explains that in order “to leave this profession as strong or stronger than we inherited it, we must take leaps, not steps. We must achieve a common state of being uncomfortable with our discomfort and not thinking about our own self-preservation, but rather the preservation and sustainability of our profession.”
As James C. Bourke, CPA, CITP, CFF, CGMA, managing director of advisory services at Withum and a past president of the NJCPA says, huge changes are ahead for CPAs, but some CPAs are more than halfway there. “When I look up what ‘Wiki’ says about an accountant today, it states, ‘An accountant is a practitioner of accounting or accountancy, which is the measurement, disclosure or provision of assurance about financial information that helps managers, investors, tax authorities and others make decisions about allocating resource(s),’” he says, adding that “we are so much more than that to our clients and, quite frankly, always have been.”
Accounting professionals with more advisory skillsets will increasingly find their way to the upper layers of management in CPA firms. Robert Traphagen, CPA, CGMA, managing partner at Traphagen CPAs & Wealth Advisors and a past president of the NJCPA, says, “the upper level will now be comprised of a new thought leadership consisting of CPAs, synthesists and other credentialed professionals, collectively providing a holistic financial solution to clients’ objectives. CPAs will have a unique opportunity to position themselves as leaders in this new paradigm, leveraging their strength in analytics to continue their role as the trusted advisor.”
Indeed, CPAs are morphing away from the mundane, repetitious functions that have characterized their job functions in the past but, says Jason Cullari, CPA, PSA, MBA, managing member of Cullari Carrico LLC, a lot of that is due to clients forcing those changes. “People are realizing that CPAs have a deep network of trusted advisors, either internally or externally, and want to simply plug into that network.” He says this dynamic, which has always been at the core of the CPA’s relationship with their clients, “is causing CPAs to expand their offering of services.”
So, how might clients view this trusted advisor differently? Bourke notes, “As accountants in 2030, our clients will come to us with all their needs, not just tax and attest.” And, he adds, that it may take a full 10 years for the transformation to fully resonate.
The Modern CPA
Efficiencies with automation and new advances in technology should continue to alleviate time-consuming functions for CPAs and their staff. And mandatory face time in the office is likely to be a thing of the past with remote office working and new apps arriving daily. In years past, CPAs have even put off important life choices due to heavy workloads. While the work may not dissipate in the coming years, future CPAs should have more time-saving workflow systems in place and better ways of tracking client information to get that work done faster.
But, as Sarah Krom, CPA, managing partner at SKC & Co., CPAs, LLC, and a past president of the NJCPA, notes, quicker does not mean replacing client contact. The future CPA will be all about clients. “Business owners will have a need for deep relationships with their trusted CPA advisors who focus on strategic and innovative solutions to obtain goals,” she explains.
Flexibility will take on new meaning in any new trusted advisor role, which will impact CPAs as well as their staff. “The modern CPA will have a heavier focus on employee wellness (work/life balance) and flexibility (working from home) as well as an expanded selection of candidates outside of standard accounting degrees in order to combat the shrinking CPA marketplace,” explains Cullari. “They will have more specialized staff and niche services being provided to clients with fewer and fewer CPAs being ‘generalists.’”
Clients will find their accountant is able to spend more time consulting and advising on their business, says Thomas Pedersen, CPA, a principal at WilkinGuttenplan, as opposed to just signing a tax return and rendering an audit opinion. Though, he’s quick to point out, “the modern CPA firm will be strategic in looking ahead to make sure they are leaders of the change in the profession and not afraid to take short-term risks to ensure long-term success.”
Data, data and more data will be even more important for the future CPA. “Every client, no matter how small, will have custom dashboards on their phone screens in real time. The level of touch between the client and the business advisor will be no less than weekly and will focus on accountability, strategy and innovation,” explains Krom. “Instant, usable data will be at our fingertips with everything in real time — benchmarks, trend graphs, ratio calculations.”
With data at their disposal and clients looking to interact with their CPA more frequently, Cullari says there will be more opportunities “where CPAs are acting as part-time controllers, CFOs and even business coaches, providing constant and reliable feedback at a reduced cost.” The controller function, for example, will be extremely automated, with some functions, at least, outsourced.
And artificial intelligence (AI) will assist CPAs in their new advisor role. As Krom explains, “AI will aid in our accountability through apps that keep us on schedule and organize our time to allow us to accomplish everything on our to-do lists in the most efficient way.”
Vast amounts of data will result in more meaningful metrics, admits Traphagen. “Just as analytics changed the baseball landscape during the Moneyball revolution, access to more data will also allow for significant changes in accounting; more financial data in audits will provide a higher level of comparability allowing the CPA to identify anomalies on a larger scale.” But he cautions about relying only on data. Metrics will be extremely important; however, he says, CPAs will need to recognize that strategy is an abstract and, while metrics give strategy form, we should not lose sight of strategy by focusing merely on metrics.
The most significant technological development is 5G, according to Traphagen. “Some say 5G is 100-times faster than 4G. With 4G networks, the latency, or the time it takes for data to go from source to destination, has an average of around 50 milliseconds (ms). That could drop to one millisecond with 5G technology. This means more data and more content loading the internet and other areas of storage. The speed and greater amount of data that can be transmitted will have a steroid effect on big data. The ability to collect huge or large amounts of data and convert it to AI will be a global game changer and, coupled with cloud technology, will alter strategic planning for the future.”
In short, CPAs must help businesses manage change while helping themselves manage their own futures, explains Barry R. Palatnik, CPA, Ed.D., MBA, assistant professor of accounting at Stockton University. “Changes in the workforce, technology, the economy and regulations will no doubt reshape the CPA profession over the next 10 years. Our hope is that the CPA profession works together to anticipate and manage these changes.”
James C. Bourke
James C. Bourke, CPA, CITP, CFF,CGMA, is a partner and the director of firm technology at WithumSmith+Brown. He has served as chair of the AICPA CITP Credential Committee and the AICPA Tech+ Conference. He has been named by Accounting Today as one of the “Top 100 Most Influential People in Accounting” and by CPA Practice Advisor as a “Top 25 Thought Leader in the Accounting Profession.” He is a past president of the New Jersey Society of CPAs.
Sarah Krom, CPA, is president of the NJCPA for 2018/19 and is a managing partner at SKC & Co., CPAs, LLC. She works primarily with entrepreneur business owners who have high growth goals for their company. She is also a member of the Strategic Planning Committee and previously chaired the Young CPAs Council, which is now called the Emerging Leaders Council.
Thomas Pedersen, CPA, is a principal at WilkinGuttenplan. He is a trustee of the NJCPA Scholarship Fund and is the chairperson of the Student Programs and Scholarship Committee.
Bill, CPA, CITP, CGMA, is the co-founder and CEO of Succession Institute, LLC and has been consulting for three decades to all size businesses, primarily in the areas of strategy, leadership and change management.He is also the Chair of the Board of the American Institute of CPAs (AICPA) and was a past Commissioner on the National Accreditation Commission. He also serves as an advisory board member to several organizations.
This article appeared in the May/June 2020 issue of New Jersey CPA magazine. Read the full issue.