Career Transition: A Focused Path or a Leap of Faith?
With a more agreeable environment to switch between career paths and shorter steps to achieve partner or CFO status, there has never been a more exciting time to be a CPA.
In most professions, an undergraduate degree opens doors, a master’s degree opens additional doors and having a specialized license or credential provides even more opportunities. While this is true in accounting, the profession also offers a plethora of choices for careers today that are increasingly varied and far removed from the traditional role of an accountant.
Student to Staff
Students who have done internships will likely have an easier time making the transition to full-time employee, but those without that participation can also do well, given the right academic program and willingness to learn. Some obvious missteps can occur in this stage, but young professionals who communicate, get organized and have a desire to learn everything they can get their hands on will be ahead of the game.
David Cristello, founder and CEO of Jetpack Workflow, has some helpful tips for those just starting out in the industry. He says it’s best to “become the most curious person about the profession you are about to enter.” This includes listening to podcasts, watching videos, reading one book a month about the field and then making a list of the top 20 companies someone wants to work for. By reaching out and asking to interview them about what they think of the new workforce and the challenges they’re experiencing as an owner/partner/leader, he says, it’s a proactive way to engage with them. “This ‘1-2’ approach helps you 1) quickly get up to speed on the industry and become a more insightful individual to connect with and 2) gets you in the door at the top companies.”
Other skills, such as the ability to communicate well with staff, clients and other company executives, will help students transition well to working life. As Courtney McLaughlin, CPA, a senior tax accountant at Withum, notes, “Communicate, communicate, communicate! There is no greater skill than that of communication — especially as someone who is new to the workforce.” Although it may sometimes feel uncomfortable, she adds, often times challenges or dilemmas could have been avoided if there was more communication.
Jose Borbon, CPA, assistant vice president/senior auditor at Kearny Bank, adds that joining organizations such as the NJCPA and the American Institute of CPAs are best practices. “Becoming a newly licensed CPA and making the transition from the classroom to the corporate office can be overwhelming. Almost overnight you have people asking you all kinds of questions on various topics simply because you are now a CPA,” he cautions. To alleviate some of that burden and to gain confidence, he suggests that young professionals read the Journal of Accountancy and New Jersey CPA.
As new managers take the reins of their new position, a lot can slip through the cracks if they are not careful. Speaking from experience, Borbon says, “Mismatching assignments with those tasked to perform them is one of the rookie mistakes new managers often make. To delegate effectively, a manager must take the time to get to know the members of the team and their skillsets.” This “matching” approach helps to maintain organization, save time and increase productivity, he adds, noting that it is likely that a staff member will be more motivated to work on an assignment that better fits their qualifications.
Private/Public Switch Off
For those making a move from a niche private practice or industry job to managing a full client workload in public accounting, such a switch can be challenging. As Stephanie S. Danos, CPA, a senior forensic associate at Withum who recently transitioned from a financial reporting role in the private sector to a forensic and valuation role, explains, “My first interview for this role concluded with a warning that juggling a workload full of varying client deadlines and impromptu tasks would most likely be my biggest hurdle. Boy, was that an understatement!”
The private sector, she notes, comes with few surprises since timelines are known well in advance and work tasks tend to be repetitive in nature. Fast forward to a full-service accounting firm, and things are quite different. “I’ve always been a task-oriented individual, but this role in particular has made me kick up my to-do list skills to the next level,” she says. “As all my fellow spreadsheet-loving accountants will agree, Excel is an amazing tool for organizing large quantities of data with great amounts of detail. When juggling so many different projects at once, details are crucial to ensure all deadlines are met and long-term projects stay on task.” And she also credits effective communication and countless cups of caffeine as having proven successful in navigating public accounting client workloads.
Retirement, Succession and Beyond
Whether one is close to retirement or a few years away, it’s never too early to start planning. While it can mean different things to different people — such as fully retired or taking up some sort of teaching or consulting endeavor — retirement and succession planning involves careful consideration by all transitioning into this stage.
“Retirement approaches faster than you think,” says Deborah Schaub, CPA, CTC, founder of C&B Accounting. “Carefully consider your options when selling or transferring your hard-earned business — especially if you plan on using the resulting income to enhance your lifestyle after retirement.” According to Schaub, there are many common pitfalls to avoid. These, she says, include not understanding after-tax cashflow needs for retirement, expecting an all-cash deal, only speaking with or seeking an owner-prospective buyer and lack of preparation.
So what’s the best plan of action for retirement and succession planning? “Begin strategizing five years before you plan to retire so that everyone knows what to expect,” says Schaub, noting one has to be proactive in creating a plan. She uses the following considerations when talking to clients, which are also applicable to CPAs approaching retirement:
- Understand choices for long-term financing.
- Cultivate staff to grow into new positions of responsibility.
- Consider rewards for key employees (this could include plans for phantom stocks and vesting schedules).
- Educate oneself on the business’s full value.
- Practice an annual hypothetical exercise to review operations, profits, earnings and debt covering three to five years of data so that the information can be shared with potential buyers.
Cristello agrees. “Every firm will eventually be sold, whether proactively or reactively. For the sake of the owner and their legacy, I would recommend proactive steps to succession planning. The first step is getting all the institutional knowledge out of your head. Create checklists and templates for as much as you can. Ideally, start delegating or coaching team members to take 10 to 20 percent of your workload ASAP.” This plan of action, he adds, will provide the space to identify, nurture or recruit a new partner or leader.
David Cristello is the founder & CEO of Jetpack Workflow. He's also the host of the "Growing Your Firm" podcast, an interview series that highlights best practices and trends in team management, metrics, M&A, marketing and more. David is also the co-author of the best-selling book "Double Your Accounting Firm.”
More content by David Cristello:
Jose M. Borbon
Jose Borbon, CPA, CRC, is an assistant vice president and senior auditor at Kearny Bank. He is a member of the NJCPA Emerging Leaders, Federal Taxation and Accounting & Auditing Standards interest groups.
More content by Jose M. Borbon:
Stephanie S. Danos
Stephanie Danos, CPA, is a senior forensic associate at Withum. She is a member of the NJCPA.
This article appeared in the September/October 2020 issue of New Jersey CPA magazine. Read the full issue.