The use of artificial intelligence (AI) in your firm’s account-based marketing (ABM) efforts can transform opportunities and lead to significant process improvements.

AI technology can help your team gain deep insights into customer behavior and preferences, identify opportunities for personalized engagement and streamline marketing operations. This game-changing approach to ABM can also lead to more efficient and effective marketing campaigns, increased customer engagement and higher revenue.

What is ABM?

ABM is a strategic marketing approach where firms focus on targeting and engaging with specific, high-value prospects rather than casting a wide net and targeting a broader audience.

ABM is particularly effective in B2B (business-to-business) contexts where the customer base consists of fewer high-value accounts. It helps firms maximize their marketing efforts by focusing on accounts more likely to generate significant revenue. However, implementing a successful ABM strategy requires careful planning and collaboration and a deep understanding of the target accounts' needs and challenges.

Key Features of ABM

In ABM, the focus shifts to tailoring marketing efforts to individual accounts, treating each account as its unique market. It takes into account the following key features of high-profile accounts:

• Identifying target accounts
• Personalization
• Multi-channel engagement
• Collaboration between sales and marketing
• Metrics and measurement
• Longer sales cycle
• ROI focus
• Technology enablement

Game-Changing AI Assistance

Overall, AI can empower marketers and sales teams to deliver highly personalized and relevant experiences to target accounts, ultimately increasing the effectiveness of ABM strategies and improving the chances of converting high-value accounts into loyal customers.

AI can play a significant role in enhancing and optimizing ABM efforts, including:

• Data analysis and segmentation
• Predictive analytics
• Content personalization
• Chatbots and conversational AI
• Lead scoring and prioritization
• Automated outreach
• Account insights
• Data enrichment
• Campaign optimization
• Dynamic content generation
• A/B testing and optimization
• Sales enablement

Using ChatGPT

I asked ChatGPT to “write an ABM email example for an accounting firm speaking with construction company leads.” Here’s what it came up with:

Subject: Enhancing Financial Excellence for [Construction Company Name]

Dear [Lead's Name],

I trust this email finds you well. I've been impressed by the strides [Construction Company Name] has been making in the industry, and I wanted to reach out to explore how [Your Accounting Firm Name] can contribute to your financial success.

In the dynamic landscape of the construction industry, staying ahead financially is crucial. We understand the unique challenges and opportunities that construction companies face, and we have a proven track record of delivering tailored financial solutions.

Here's how we can partner to enhance your financial excellence:

• Cost Optimization
• Cash Flow Management
• Tax Strategies
• Project Financial Analysis
• Risk Mitigation

I'd love to have the opportunity to discuss how [Your Accounting Firm Name] can tailor these solutions to align with [Construction Company Name]'s unique needs. If this sounds promising, let's set up a conversation at your convenience. Feel free to reply to this email or use the link below to choose a time that suits you.

[Meeting Scheduler Link]

Thank you for considering us as a potential partner in your financial journey. I look forward to the possibility of contributing to the continued success of [Construction Company Name].

Best regards,

By harnessing AI's capabilities, firms can decipher customer behaviors, create personalized engagement and optimize marketing operations. This paradigm shift in ABM methodology facilitates more efficient campaigns, heightened customer involvement and, ultimately, elevated revenue generation.

The rapid growth and popularity of cryptocurrencies have revolutionized the financial landscape, offering numerous benefits. However, this digital revolution has also brought forth a plethora of cybersecurity challenges that demand rigorous examination from a digital forensic standpoint. As the use of cryptocurrencies gains widespread adoption, accountants must take the following five cybersecurity steps:

1. Understand the risks. To advise clients adequately, accountants must have a clear understanding of the cybersecurity risks associated with cryptocurrencies. These risks include cyberattacks on exchanges and wallets, social engineering, email compromises, phishing and fraudulent transfer schemes, to name a few. By understanding the various threats, accountants can help their clients recognize potential risks and implement effective security measures.
   
2. Encourage best practices. Accountants can play an active role in promoting best practices for safe cryptocurrency usage. This includes implementing multifactor authentication, securing wallet management and using strong passphrases. Encouraging clients to keep their software up to date and regularly back up their wallets is also crucial. By recommending these practices, accountants can help clients protect their digital assets from potential attacks and minimize their exposure to cybersecurity risks.
3. Be wary of insider threats and social engineering. The human element remains a significant cybersecurity challenge. Insider threats, where employees or trusted individuals misuse their access privileges, can result in data breaches or unauthorized transactions. Social engineering techniques, such as phishing and impersonation, target unsuspecting users and trick them into revealing sensitive information or transferring funds to malicious actors.
   
4. Promote regulatory compliance. Cryptocurrencies operate in a largely unregulated environment, creating challenges for regulatory compliance. As such, it is essential for accountants to ensure their clients comply with relevant laws and regulations, including anti-money laundering (AML) and know your customer (KYC) requirements. By promoting compliance, accountants can help prevent their clients from engaging in illegal activities while safeguarding their reputation and financial assets.
5. Stay Informed. The cybersecurity landscape is constantly evolving, with new threats and vulnerabilities emerging regularly. Accountants must stay informed about the latest cybersecurity trends to provide up-to-date guidance to their clients. This can be achieved by partnering with subject matter experts and organizations that offer proactive cybersecurity services and by attending relevant training events to stay informed about industry developments.

More IRS Crackdown

Beyond addressing risk factors and evaluating investment opportunities, accountants, business owners and individuals should be aware that the IRS is actively pursuing compliance from an income tax reporting standpoint and initiating criminal investigations when badges of fraud are present. “The IRS issued Notice 2014-21 defining virtual currency as ‘property’ for federal tax purposes. Depending on how virtual currency is exchanged or sold, there may be capital gains tax due on the disposition or ordinary income to the receiver of virtual currency in a business transaction,” said David Gannaway, principal at Bederson, LLP, and a 20-year veteran of the IRS who currently represents clients in IRS tax controversy matters. “If a business pays their employees with virtual currency, employment taxes should be withheld/paid and Forms W-2s issued. Also, Forms 1099 should be issued to independent contractors if paid with virtual currencies.”

In March 2021, IRS Criminal Investigation (CI) launched Operation Hidden Treasure, an enforcement initiative for criminal tax violations related to cryptocurrency. There have been several prosecutions across the country involving digital assets with more to come as proclaimed by CI Chief James (Jim) Lee recently.

By understanding the risks, promoting best practices, encouraging regulatory compliance, remaining diligent and staying informed, accountants can help their clients navigate the complex world of cryptocurrency safely.

Tackling CPA Pipeline Challenges Together

As you might expect, I’ve spent much of my first two months as your CEO in meetings with members and NJCPA leaders learning more about what keeps CPAs up at night. Unsurprisingly, the talent pipeline shortage is the accounting profession’s single-most important issue. Organizations from across the accounting spectrum, from the Center for Audit Quality (CAQ) and the AICPA to universities and state CPA societies, are taking a hard look at the challenges the profession is experiencing in attracting top talent, particularly underrepresented talent. We know that the profession has a diversity problem, according to the research presented by these and other organizations. By continuing to delve into solutions to attract and retain diverse talent, we can address some aspects of the pipeline issues. According to a recent CAQ report, which included responses from 1,800+ students, the next generation of talent sees the following hurdles/misconceptions: They have a lack of interest or passion for the major (driven in part by negative experiences with introductory accounting classes) and a perception that they’re not good enough at math to become an accountant. There are higher starting salaries in other majors, and they don’t want to pursue the 150 academic credit hours required for CPA licensure. For Black and Hispanic business-related majors, the 150-credit hour requirement was the biggest reason for not choosing accounting. A variety of structural supports are correlated with plans to pursue the license, including encouragement of a professor/mentor and whether a student’s college offered a 150-credit hour program (i.e., an accelerated undergraduate program covering 150 credit hours or a five-year master’s in accounting program). Unfortunately, Black and Hispanic majors and graduates reported less access to such structural supports. The NJCPA has prioritized the pipeline challenges by developing a Pipeline Task Force, which is made up of a diverse set of professionals. The task force is chaired by Zack Cohen, CPA, senior manager at CFGI, and includes many of the Society’s emerging leaders. The group has been entrusted with developing a set of actionable and measurable recommendations that will identify areas that need improvement; practices and programs that the NJCPA should launch, continue or ramp up; where to direct resources; and where further research is needed. It will deliver a first set of recommendations to the Strategic Planning Committee in the fall and to the Board of Trustees in December. We welcome your feedback and encourage you to share your stories and get involved.

 

As we distance ourselves from the pandemic, there are new realities that accounting firm leadership has come to face, including:

• Remote work
• Demand for higher wages
• Decline in the number of accounting graduates
• Consequently, less skilled staff/senior-level employees

In addition to navigating the reality of a post-pandemic workforce, accounting firms are also seeing an above-average increase in responsibilities and client services, such as:

• Multiple stimulus programs
• Increase in sale transactions/complex tax solutions
• Long wait times when trying to resolve tax notices

So how does leadership solve the issue of more work and less help? We need to get the leverage of staff back in our favor. This may slowly happen over time as we move away from the free money provided through COVID relief programs and interest rates normalize. However, we need to come up with permanent solutions.

Benefits of Outsourcing

Many accounting firms are outsourcing their work to countries where wages are lower and employee motivation potentially higher. It needs to be highlighted that for a firm to implement an offshore practice, they need to first confirm they have taken all security measures to keep client information safe. Additionally, all clients will need to give express consent to have their work offshored. 

While firms will always need U.S. staff, it is important that we start leveraging our accounts so that an increased amount of preparation work is being done by less-expensive employees. This allows our U.S. staff to get a first level of review and can lead to an immense development of their skills.

Offshoring was once frowned upon in the accounting profession, but it has gradually become the norm as the number of qualified U.S. accounting graduates has decreased tremendously. We are also seeing that many newcomers to the accounting industry are not as willing to work the grueling hours of busy season. It has long been a detriment that the accounting profession rewards promising staff with more work. We need to move in a new direction with our high-performing staff, so that although they may receive more responsibilities, it will not always equate to the grunt work of preparation. Instead, they will be given a team of outsourced staff to manage and complete lower-level preparation work, thereby alleviating some burden and freeing them to complete higher-level analysis work.

Managing an Outsourced Team

For large and midsize accounting firms, bringing outsourced teams to a satisfactory standard will take continuous investment. During this process, it’s important to convey to these new employees your corporate culture and to ensure they feel that they are an important part of the team. Look at these employees as if they are your U.S. staff. If they can develop and your firm can keep them motivated, it will be an exponential benefit as your tenured offshore employees can now train your newly hired offshore employees.

It’s vital to commit ample time to get the first wave of your offshore employees to where they need to be. This includes a lot of training and, most importantly, shadowing so that the new offshore employees get firsthand knowledge of what it is they are expected to do.

For many years, merger and acquisition (M&A) activity in the public accounting industry was primarily driven by succession planning issues. While succession challenges still play a role in a firm’s decision to sell or merge, there are many other factors that are driving the elevated levels of M&A transactions throughout the country, such as: 

• Difficulty in attracting and retaining professionals to provide quality services to clients 
• Private equity making significant investments in CPA firms, providing more opportunities and options in the M&A marketplace, including for smaller firms known as “tuck-ins”
• Lack of sufficient revenue growth due to the labor shortage
• Generalist firms with the absence of high-demand niches, specialty services and formal integrated advisory services, leading to a loss of competitive edge in their local marketplace to larger firms with more resources
• Inability for the partners to agree on a strategic plan together with the necessary investments in resources to remain independent
• Minimal partner accountability for performance and profitability

In this dynamic marketplace, the leaders of today’s accounting firms have several strategic options to consider for their firms’ future. 

Private Equity Investments

Private equity (PE) is making an impressive impact in the public accounting industry. Investments have been made into firms such as Citrin Cooperman, EisnerAmper and Cherry Bekaert. The goal of PE is to generate investment returns through capital appreciation via revenue growth, improved margins and increased valuation multiples typically associated with higher levels of earnings. The capital infusion supports the firms’ long-term growth initiatives, which include accelerating advisory and new and innovative services, investing in talent and technology, and expanding through organic growth and targeted mergers and acquisitions. 

Once a “platform” firm is secured by PE, they are charged with acquiring tuck-in firms, which benefit by receiving multiples based upon their earnings before interest, taxes, depreciation and amortization (EBITDA) that may provide higher valuations than traditional M&A deals. This is also known as a “buy and build strategy” for the fund to sell to a larger PE fund within three to five years. 

An example of a tuck-in transaction structure is as follows:

Cash at Closing	50%
Rollover Equity/Incentive Units	15%	A
Guaranteed Payout	20%	B
Contingent Payout	15%	C

 

1. Rollover equity can be available to current equity partners and incentive units available to mutually agreed upon partners, directors and managers.
2. The guaranteed payout is paid at the earliest five years from the effective date or sooner if the PE investor exits as part of a change-of-control event.
3. The contingent payout is based upon collectable billings to clients during the three calendar years following the effective date and may be paid at the earlier of the third anniversary of the effective date or sooner if the PE investor exits as part of a change-of-control event.

Traditional Mergers and Hybrid Structures

We are seeing a trend with traditional merger transactions where sellers are not seeking involvement with PE but wish to incorporate components of a PE deal into the transaction. The most common hybrid component is an upfront payment to partners. These hybrid deals will continue to evolve and become more widespread in the marketplace.

Internal Succession

There are many CPA firms throughout the U.S. that wish to remain independent, but few firms have implemented formal plans to ensure their legacy. Succession planning is not a program that should take place a few years before client service partners and/or leaders are about to retire. Succession planning should be an ongoing, daily occurrence that considers partner governance and compensation, growth through M&A, marketing, recruiting at all levels and human resource management. Succession planning needs to start at the top with a true sense of urgency.  

CPA firm owners should maintain a realistic perspective about the changing marketplace.They need to understand the powerful impact that private equity has now and will have in the future, and continuously evaluate the market and assess viable options for their future. 

I had the privilege of attending the NJCPA Convention & Expo for the second time at the Atlantic City Borgata Hotel in June. I felt honored to represent the next generation of accountants as an NJCPA student ambassador along with nine other Stockton University students.

Takeaways

After attending two informative sessions, "The Future of Auditing in the Post-COVID Era" and "Using Data Analytics to Manage Audit Risk," and two keynote presentations by Gene Marks, CPA, columnist, author and owner of the Marks Group PC, and Dave Delaney, CEO and founder of Futureforth.com, I learned the following lessons and valuable leadership tips:

• In-person client connection is crucial. Though many accounting firms have implemented work-from-home job duties due to COVID-19, and although remote meetings are sometimes effective, in-person connection to clients is important. Discussing post-COVID-era communication strategies is essential for effective communication with clients.
• Analyzing complex data is key. This can prevent inefficient business practices.
• Leading with acceptance goes a long way. It’s important to improve listening skills to be a good leader.
• Never be afraid of failure. It is an important way to learn.

A big thanks to Daniel Barbera, CPA, MBA, CGMA, CFO of Lydia Security Monitoring, Inc., for sponsoring our group and Professor Barry Palatnik, Ed.D, MBA, CPA, associate professor of accounting at Stockton University, for making our attendance possible. I'm also grateful to have met Heather Sperduto, vice president of sales operations – accountant channel at ADP, who shared a photo of us on their company Instagram page.

A Great Start and a Path Forward

I am thrilled to be writing to you after my first month here at the NJCPA —  a month that started with our Convention & Expo in Atlantic City, where we celebrated our 125th anniversary, said “mahalo” to Ralph Albert Thomas, learned many ways to move the profession forward and held numerous side conversations. Our annual event even made it into the pages of NJBIZ. 

For me, the best part was being able to make face-to-face connections with so many members. I will put those takeaways to good use over the next 100 days or so as part of our statewide member listening tour. I look forward to meeting with you and all of our volunteer leaders to hear what our community needs and wants from their Society.  

This event and others illustrate that accounting can have a pretty good elevator pitch. We need to share our stories with students and graduates whose impression of the prestige and intrinsic value of accounting (and pursuit of CPA licensure) has been diminished by concerns over college debt, extensive CPE, long hours and slow career advancement. 

Earlier this year, I wrote in Accounting Today (an NJCPA partner) about another message that needs to be shared: include non-CPA recruitment and career development in your strategic initiatives for the coming years and of course, continue to encourage CPA licensure for interested employees. I added, “…multiple career path discussions should happen during recruitment as well as during onboarding and regular check-ins. This can help dispel myths that public accounting only offers limited career prospects and challenging working conditions.” 

The NJCPA is adapting to this new recruitment and career development environment with the creation of the new Affiliate membership category. This opportunity to bring new candidates into the pipeline will help us focus on supporting graduates who are still unsure about becoming CPAs. According to the National Association of State Boards of Accountancy (NASBA), the average age of successful CPA Exam candidates is 29, with the median age being 25 years. The Affiliate class enables these professionals to take advantage of the benefits of membership (e.g., discounts, training) while we present the relevance and benefits of the CPA credential.

These individuals are valuable members of the accounting and finance profession, and, thus, can be valuable members of the NJCPA community. 

If someone isn’t yet a member of the NJCPA, tell them why you joined. Explain how membership has impacted you. Share your story. Thank you for your membership, your kind greetings and continued support of the NJCPA. As always, we welcome your feedback.

New Jersey’s Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization (CREAMM) Act allows for the legal sale and use of cannabis and cannabis products for residents 21 years and older. With New Jersey double the size of Colorado in population, and with Colorado being a $2 billion market, you can see this market will likely be very large in New Jersey.

Across the U.S., there are thousands of cannabis businesses springing up, and there are not enough experienced accounting professionals to go around. For those CPAs in New Jersey who may be considering working with these companies, here are the top five myths about providing accounting services to the cannabis and CBD/hemp niches.

Myth #1: Accounting for cannabis companies is just like any other niche.

Actually, with cannabis and CBD/hemp, we are experiencing the birth of an entire industry, including many sub-niches like farming, chemical processing, manufacturing of foods and products, distribution, testing labs, retail and delivery companies. And you might even find all of these verticals in a single company or organization. 

The major accounting and tax issues in these niches include the following:

• Many vendors will not service companies that operate within the cannabis industry (e.g., accounting, POS, merchant services, payroll).
• There is a lack of accounting tools, workpapers, industry guides, GAAP guidance and chart of accounts.
• New software in the market is full of bugs, significant periods of downtime, features that don’t work and poor customer service.
• Cannabis companies cannot take any tax deductions on their federal return due to the substance's Schedule 1 status (IRC code 280e). There are legal ways to reduce tax liability, but you must understand the tax codes, including what is allowed and what isn’t for each vertical.
• Cost accounting is required under IRC 471-11 to book inventory.

Myth #2: CPAs will lose their licenses if they serve a cannabis company.

Yes, cannabis is illegal on a federal basis, but it is legal in many states, and these companies need good accounting and tax services. 

The American Institute of CPAs (AICPA) has recognized the need for accountants to serve cannabis companies and is on board. For the last three years, the AICPA has hosted a conference of hand-picked experts in the cannabis niche to present key information in an effort to better educate accounting professionals about this grossly underserved segment. If you have any other doubts whatsoever, contact your state board to learn more about serving cannabis companies as a CPA in New Jersey. (You can also attend the next AICPA Cannabis Industry Conference in Boston August 14-16, 2023, where I’m helping to plan and speak at this event. The NJCPA is also hosting a Cannabis Conference on August 2.)

Myth #3: This is an all-cash industry.

Actually, credit unions and banks serve cannabis companies in many different states. For example, Credit Union 1 serves cannabis companies all over the U.S.

That said, there is a lot of cash in the industry, so there is a big need for cash controls and procedures to prevent fraud and theft. Additionally, you will find many cannabis business owners have anywhere from two to 10 non-cannabis entities, such as a real estate or equipment company, and these can have easier access to banking.

The SAFE Banking Act is currently under federal review, and hopefully there will be easier access to banking and merchant services very soon for cannabis companies.

Myth #4: Cannabis companies are a gold mine in terms of net income.

Since there are massive taxes on this industry at the national level via 280E, as well as heavy state and local taxes, it's actually very hard for these companies to have a net income (if they are correctly doing accounting and tax).

Similar to the tech boom, many of these companies will lose money for years. The name of the game for founders and investors is focusing on building brands, growing revenues rapidly, vertically integrating and staying well capitalized. Exit valuations are now based on growth and brand, NOT net income, and will likely be for some time.

Myth #5: Cannabis must be a horrible niche for CPAs.

Since there are so few CPAs in the niche right now, it’s actually a massive opportunity. When you consider that a small, mom-and-pop cannabis business, whether a farm, dispensary or vertical integration, will often be a $10 to $20 million company very quickly, these clients will pay sizable fees for rock solid accounting and tax.

Getting Started

Cannabis accounting is one of the most rewarding industries for those who love the challenge of navigating complex accounting and tax issues, implementing systems and controls and helping clients manage the financial health of their business while maximizing cash flow. 

You can get involved with groups like the NJCPA’s Cannabis Interest Group at njcpa.org/groups.

The use of cloud accounting is on the rise across all types of businesses, and accountants are tasked with staying on top of this trend. If you're an accountant looking to transition from traditional systems to a new cloud accounting solution, benefits include the following:

• More robust security measures. Cloud accounting platforms have data backups, encryption and multi-factor authentication options available, making sharing data and collaborating on projects much easier and more efficient.
• Always up to date. The cloud provider automatically includes changes in accounting rules and tax rates, and new features are also added without you needing to do anything.
• Streamlined workflows. Cloud solutions automate tasks, freeing up time for accountants to focus on more high-value tasks, such as analysis and strategy.
• Accessible from anywhere and on any device with an internet connection.
• Ease of collaboration. Multiple users can access and work on the same data simultaneously. This can be particularly useful for businesses with multiple locations or remote teams.
• Flexible and scalable. Traditional accounting software is often limited by the capabilities of the computer it is installed on. But cloud-based software can scale up or down depending on the business's needs. This makes it easier for organizations to adjust their accounting software to accommodate growth or changes in their operations.

By using cloud software, accountants can benefit from automatic backups and secure data encryption. It is more flexible, scalable, collaborative and secure. This can especially benefit businesses with limited IT resources.

Find a Provider

The first step is to do your research and find a high-quality cloud accounting software option. Important features to look for include the following:

• Multi-user access for remote employees
• Customer relationship management so that client information can be easily accessed and updated
• A secure platform that meets the necessary compliance standards

Prepare Your Data

It’s important to thoroughly clean and organize your data before transferring it to the new system. This includes removing duplicate files, correcting any errors, ensuring proper formatting and verifying data accuracy.

Additionally, be sure to include all relevant data: financial data, customer data, vendor records, payroll records and inventory data. Identify any data that is no longer required or is outdated and delete or archive it to prevent unnecessary storage costs.

Assess Security Needs

When you navigate the transition to cloud-based accounting systems, you will need a solid security plan. Since you will be relying on cloud providers to store sensitive data, you must ensure your firm's bank accounts and financial information are well-protected.

Start by evaluating your organization’s current financial position and the level of security risks that you may face. Determine what information needs to be protected and who should have access to it. This includes identifying the types of data that should be classified as confidential or sensitive and defining the extent of their accessibility.

Once you clearly understand your security needs, develop a security plan that meets those requirements. This should include all policies and procedures that will help safeguard your information from outside threats, like access controls and password management.

Monitor Performance

Regular monitoring of cloud-based applications helps to identify performance issues such as slow system response time, downtime and network latency. These issues can be caused by various factors, such as overloaded servers, inadequate bandwidth, software bugs or even human error.

Furthermore, monitoring the cloud-based system's performance can help businesses protect their financial operations. These systems are vulnerable to security threats such as cyber-attacks, data breaches, and intentional or accidental data loss. With regular performance monitoring, you will identify any potential security threats early. Then, you can take the necessary measures to mitigate them.

A study from Salesforce found that 66 percent of clients expect you to know their needs. If you don’t understand a client’s financial goals, you’ll fall short of meeting their expectations. No one wants to feel like a “number,” which is why accountants need to do the following:

• Learn their clients’ goals
• Understand the benefit of goal setting for their client relationships

For example, if you know that a client’s goal is to retire soon, what’s next on their radar? Maybe this individual wants to have money to travel the world and they’re considering selling or handing their business to someone else (perhaps a family member). Each goal comes with its own implications that you can use to meet clients’ expectations.

Exceeding Client Expectations

If your clients seem content with your work, why should you take the extra step to focus on both their personal and business financial goals? Here are a few reasons:

1. Trust: Building trust with a client is one way to ensure long-term success. If you focus on an individual's goals, you can meet their expectations and gain their trust.
2. Satisfaction: The personalization of focusing on financial goals is what your clients want. One survey found that 8-in-10 clients are more likely to purchase if given a personalized experience.
3. Retention: Happy clients will stay with your business. Retaining clients is in your best interest because attracting new ones is always more expensive.

Identifying and Prioritizing Clients' Financial Goals

You won’t know your clients’ goals if you don’t have in-depth conversations with them. An effective technique is to ask open-ended questions, such as the following:

• Where do you envision yourself in five years?
• What milestones need to be met to reach your five-year goal?
• What do you want to do with your business when you retire?

For example, imagine a client saying, “If everything works well, I would like to retire.” You know the client wants to retire, but perhaps “if everything works well” indicates that business needs to stay the same or grow to reach the person’s goal. In this example, you could ask them to define what they mean by “everything works well” and when they would like to retire by.

Setting Goals

Strategies for reaching your client’s goals can be anything because it’s 100-percent reliant on what the client wants to achieve. However, it’s important to create realistic plans and stretch plans.

Why both? Stretch goals can help inspire the client to achieve more and may improve performance and create a sense of urgency. Even if the person doesn’t reach a stretch goal, they’ll often surpass their realistic plan, which is always a good thing. Sticking to SMART (specific, measurable, achievable, relevant and time-bound) goals will put your client on the right track to reaching them.

Throughout the process, whether it’s months or years, it’s crucial to remain in close contact with the client and adjust plans to continue meeting their needs. For example, if the economy impacts the business, you may have to adjust the amount of money the client invests in the company and sets aside for retirement.

Now, finally, how should you go about offering these services? When it comes to offering these services to your clients, you may choose to offer them entirely in-house, partly in-house or partner with another firm to provide these services. What works best for your firm, your team and your clients will vary. As goals come closer to reality, expectations will be met and exceeded, making you an invaluable asset in the process. But first, you'll need to help identify, set and prioritize your client's financial goals. From there, you can tailor your services to help them reach these critical milestones with the services that your firm offers.

Hello from the NJCPA's New CEO

As I begin my first week as the new CEO and executive director of the New Jersey Society of CPAs, it’s wonderful to be part of the excitement at the 2023 NJCPA Convention & Expo in Atlantic City! I have that same level of enthusiasm to serve this great community at such a critical time of transition.

It’s a new day at the NJCPA — one where we start to build on our 125-year history and write our next chapter of impact and growth as the professional home for New Jersey’s accounting and finance professionals. As we look toward the future, meeting the needs of our members and communicating member value are our highest priorities. As we work through some of the industry’s toughest challenges, I want to assure you that the NJCPA will be here for you.

The Society is in the process of implementing new directional initiatives grounded in deepening member engagement, strengthening the overall value proposition for our community and bolstering the pipeline of new professionals. While there are already some specific, concrete ways that strategy has begun to shift the NJCPA’s focus and alignment of resources, one of the most important roles I can play is to listen to you. In the months ahead, NJCPA staff and I will plan a comprehensive listening tour, taking time to meet with members and volunteer leaders to hear what our community needs and wants from us. I look forward to sharing what I learn, and I’m confident that you’ll start to see our listening translate to action on your behalf.

Thank you for being on this journey with me. Together, we’ll ensure that your Society is well positioned for growth and vitality now and in the future. I will work closely with our team, our volunteer leaders and NJCPA stakeholders to meet your needs. I look forward to updating you again soon on our progress!

Accountants and auditors are exiting the field in record numbers. In fact, according to Bloomberg Tax & Accounting, employment numbers in accounting dropped by 17 percent from 2019 to 2021. However, a new source of candidates — neurodiverse talent — is ready to assist in this employment decline by filling back office operations and accounting roles with the necessary certifications.

Neurodiversity describes the differences in brain functions and traits that include but are not limited to autism spectrum disorder, ADHD, dyslexia and dyspraxia. So, why this talent pool? Neurodiverse staff may have skills such as attention to detail and pattern recognition that can help lower error rates in datasets to identify, mitigate and prevent larger issues down the line.

Start at the Beginning

The number-one question I get when interested employers want to implement neurodiversity in their workplace is, where do I start? My answer is always the same: at the beginning. The employee lifecycle begins at the application and interview stages. But for neurodivergent candidates, an inclusive and accessible process is necessary to ensure an adequate opportunity to showcase their skills.

Neurodivergent candidates, many of whom hold advanced degrees, may be rejected for a job due to neurotypical interview standards. Traditional responses hiring managers may look for in a neurotypical employee — maintaining eye contact, having a firm handshake, knowing where they want to be in five to 10 years — are interactions a neurodivergent candidate may struggle with. These are not reasons to disqualify a perfectly qualified candidate for the role.

In lieu of a traditional interview, hiring professionals within accounting can follow these best practices:

• Utilize neurodiversity-certified professionals. Allow them to lead the interview process for a hands-on evaluation. This can often showcase a candidate’s skillsets in a supportive environment.
• Remove the panel-style interview. This kind of interview is not conducive to accurately assess both hard and soft skills.
• Have patience. Candidates may have delayed processing, so it is imperative that you provide ample time to respond.
• Ensure a quiet environment. Whether remote or onsite, eliminating outside distractions from the interviewer is key to maintaining a strong level of focus from the candidate. Interruptions, even from a pet or child, can disorient candidates’ responses.
• Respond with empathy. Neurodivergent candidates have faced trials and tribulations. Being neurodivergent myself with generalized anxiety disorder and depression, I understand what some of those experiences are firsthand. It’s that empathetic response that makes for a stronger leader.

Expand to Onboarding

Onboarding and integration into the workplace culture are both essential in setting employees up to thrive. Neurodivergent employees can be successful when they work with accounting leadership to identify, advocate for and help implement any necessary workplace accommodations that will make it easier to perform. Some accommodations that can greatly improve comfortability and productivity include the following:

• Provide noise-canceling headphones.
• Place desks away from high-traffic areas.
• Avoid overstimulating lighting.
• Use virtual closed captioning or record meetings for later review, which can reduce anxiety for remote or hybrid employees.

Impact Beyond the Workplace

One of my greatest passions in life is helping the neurodiverse community find long-lasting, meaningful and rewarding careers with a life of independence. Being neurodivergent myself, I empathize over workplace nuances that can make it challenging to navigate not only the working world, but life in general.

Proof of reserves (PoR), a method cryptocurrency exchanges and other financial institutions use to demonstrate that they hold the funds they claim to have on deposit, is still in its infancy stage. However, it will continue to be tweaked to meet the standards of compliance and regulatory guidance as needed. The concept behind PoR is to provide transparency and to assure customers and regulators that the institution has the necessary assets to meet its financial obligations.

CPAs need to be aware that there are different ways to prove the existence of reserves, but generally, the most common PoR method is to have the institution provide cryptographic proof that it holds a specific amount of funds in a specific address. This proof is generated by a third-party auditor, which verifies that the institution indeed controls the private keys associated with the address in question.

PoR may help build trust and confidence in the institution, as it gives assurance to users that their assets held by third-party institutions exist. There have also been a few institutions that share their liabilities in a PoR audit for additional transparency. The ability to see a 1:1 ratio between assets and liabilities may help ensure that customer deposits are not being utilized for any other purpose. 

Proof of reserves offers these benefits:

• Increased transparency and trust. Proving reserves can help build trust with stakeholders by providing a clear and verifiable depiction of the organization’s underlying assets and/or liabilities.
• Improved accountability. By proving reserves, organizations can demonstrate that they are responsible stewards of their customers’ assets.
• Enhanced reputation. Proving reserves can enhance the reputation of the organization among its stakeholders, customers and the public.
• Detection of fraud. Proving reserves can help to detect fraudulent activities and ensure that the company’s financial records are accurate.

However, some potential obstacles of PoR include the following:

• There can be significant costs and resources required to perform regular audits to prove reserves.
• The potential for errors or discrepancies to be found during the audit process could lead to negative consequences for the organization.
• Privacy concerns may arise if the process of proving reserves involves disclosing sensitive financial information or a company’s keys.
• It may not provide a complete picture of the company's financial health, as it only focuses on one aspect.

Despite comments by Paul Munter, chief accountant at the SEC, saying, “Investors should not place too much confidence in the mere fact a company says it’s got a proof of reserves from an audit firm,” according to a December Payments.com article, he also mentions that PoR only shows reserves, not liabilities, which would paint a better picture of a company's financial health. To date, only a handful of exchanges have shared a PoR with liabilities included. This will most likely increase as the space matures and as more clarity is provided to the cryptocurrency markets. 

It was once thought that technology and the automation of tasks would be the solver of staffing shortages in the accounting profession. Unfortunately, not only is the technology implementation rate taking longer than expected, but the hard truth is that CPAs are still needed to assess specific intake data, follow the rules, review and input numbers and guide clients. The human component of what CPAs do cannot be replaced in its entirety…well, at least not yet. And, because of a concern about artificial intelligence (AI) some students who would otherwise become accounting majors are shifting gears and seeking out engineering and technology roles, which, by the way, are rich in diversity. Understanding this shift leads to a new way of thinking about who we can hire.

Basic Skills

In breaking down some of the basic skills necessary for entry-level accounting roles and beyond, it’s a given that two highly sought-after skills are math and analytics. If that’s the case, then it would be fair to state that consideration should be given to the following majors: mathematics, statistics, economics, computer science, engineering, physics and actuarial science. These degrees have similar entry-level basics as that of an accounting curriculum and may, in some cases, be more directly suited for candidate roles that companies are desperate to fill. 

Most accounting firms and departments require a degree plus experience after year one. With that said, existing employees are responsible for teaching them the job responsibilities they will have in their particular organization. Would it be fair to say that many of the “accounting” majors you hire, and then teach, end up leaving your company before they become a CPA or on average between two to four years later? If you agree, why wouldn’t you try an alternative to one of the areas lavishly under-represented in these careers, such as academic upbringing?  The firm that realizes that engineering graduates are also insanely great at project management might, in fact, provide audit jobs completely on time.

To be radical, but not off-base, the “come up” of accounting in our firms should require three components of transformation:

• Learn the basics of the job. The employee goes through a series of learning; they learn how to do the job, how to use the technology, the culture of the organization and the ropes.
• Become the teacher. If they stay long enough, then they become the teacher and guide the next layer of new hires along the same path they came.
• Transition to proud employee. Finally, the destination we hope many new employees reach is being proud employees (wearing the logo on their shirt and LinkedIn profile). At this stage, they’ve become subject matter experts or recognized in the area of specialization they’ve chosen, and they can easily sell the organization’s services to clients.

However, most traditional accounting and accounting ancillary degreed individuals likely do not make it up the ranks — more than half of accounting majors, if told that they will grow up to “teach” and “sell,” would choose a different path. With this in mind, psychology, marketing, human resources, entrepreneurship and business and technology degrees also offer huge opportunities for highly sought-after abilities that are often missing in the top tiers of companies. Those individuals make for wonderful candidates who, given the right training (same as accounting degrees), may be the missing link to the growth and expansion of your company. 

Business owners often have the choice to sell equity interests to an outside buyer or to sell internally to employees. Unlike employee stock ownership plans (ESOPs), where there are many employees that will start to have ownership in a company, and there is a fiduciary responsibility had by the ESOP Trustees and management when commencing and managing an ESOP, there is also an opportunity to sell ownership to key employees who might be interested in acquiring equity in the company and ultimately taking over when the selling shareholder retires or wants to slow down. Here are some important considerations for CPAs to relate to clients or their organizations.

Internal Selling Pros and Cons

An employee looking to acquire an equity interest from the owner likely doesn’t have the financial wherewithal to pay a premium price for his or her equity interest. However, they may be able to:

• Take reduced compensation for a period to buy into the company.
• Take out bank financing to help buy out the owner.
• Have the seller take back a promissory note, with principal and interest payments determined.

The positives of doing a transaction like this is that the seller gets commitment and effort from a buyer who wants the company to be successful. Selling internally also allows the seller to plan an exit strategy for him or herself. The company will have a legacy beyond the current owner. It may also allow the seller to work a little longer, in an employee capacity, and to feel connected to the company if the buyer agrees.  

The downside of selling internally versus externally is that the seller may get a lower purchase price when selling to an employee instead of an outside buyer. In valuation, the terms investment value and strategic value refer to a premium over fair market value that may be paid if an acquiror knows the advantages and synergies that may be obtained by owning the target company. The acquiror knows how it might leverage employees, customers, distribution, suppliers, systems, logistics and more, in a transaction. The buyer is willing to pay more because of the anticipated benefits it may receive. 

The valuation standards of value, investment value and strategic value, are perceived as a premium value more than fair market value. For example, if there is a large medical practice with an ambulatory care center and multiple offices, a private equity (PE) firm might pay a premium for that practice because it is buying a substantial medical practice, with work force in place, doctors already on insurance plans, large captive patient base, IT systems in place, and more. The practice may receive a price of six to eight times EBITDA (earnings before interest, taxes, depreciation and amortization) for the whole practice because it is a “strategic” buy for the PE buyer. If the owner of the practice looks to sell it internally, physician employees looking to buy in will not pay this multiple of EBITDA for the practice.  Typically, they don’t have the financial wherewithal, the expertise of private equity investors and the ability to achieve synergies and efficiencies with acquiring the practice. The PE group likely has synergies it will obtain because of other practices it has already or practices it will add onto the first “platform” practice it acquires. 

In a perfect world, when an internal employee buys a minority interest in a company, his or her equity interest value should be discounted by a discount for lack of control and discount for lack of marketability because the employee cannot control the company and the equity interest is illiquid (not readily convertible to cash).  However, owners want to get the highest price they can from an equity interest sale, and usually the value determined will not reflect discounts. When owners are looking to sell internally, they are not interested in discounts to equity interests. They are interested in the value of their company and then they will take a pro-rata percentage of that value as the buy-in price, or at least the starting price in a negotiation. 

Thus, the best way to handle sales to internal employees is to be fair with them and fair to the owner. A reasonable fair market value calculation (or full valuation) should be performed by an appraiser to understand the 100-percent equity value of the company. Then the owner can consider what level of equity they are willing to sell initially. Discussions with employees are important to understand what their expectations are when buying in and when they may want to be a controlling shareholder. Setting proper expectations for everyone is important to making a deal happen and keeping relations positive.

Long behind us are the days when the stereotype of becoming a CPA linked you to a career working alone at your desk. Not only has the economy and technology progressed, but the accounting profession has evolved as well. A CPA in today’s society requires much more than fulfilling a college credit requirement, passing a four-part exam and gaining years of experience through monotonous days of “crunching those numbers.” The evolution of the profession and the meaning behind the license has transformed the goal of an aspiring CPA to become the long-term, most-trusted advisor to clients or their company.

With this newfound role comes a key quality that each CPA and aspiring CPA should develop and continue to foster: being adaptable. It would shock many whose perception of CPAs is solely based on the individual who prepares their tax return, or the auditor who comes around annually asking for paper documents, to learn that almost no day repeats itself. The role of advisor provides CPAs with new challenges and opportunities to service our clients or company on a daily basis through the complete life cycle of the business.

Adaptability in this profession is like an onion — it has many layers. It means not only being able to respond to the changes required in the accounting industry, whether that be due to economy shifts and new regulations (e.g., new grants, tax credits and various programs that were the result of the COVID-19 pandemic), but also adjusting to the internal changes that occur. These internal changes can be due to disruptive technology software updates or conversions, opportunities for innovation, shifts in leadership and changes in firm structure and ownership.   

However, the most unexpected, and yet most important, meaning of being adaptable is adapting to the people you work with, those you report to and those you lead. There are many types of personalities and work styles and being able to pivot between them on a daily basis depending on the team, client or project, while remaining effective, can propel a career. Why is this so important? The behind-the-scenes source of an accounting team’s success is their ability to consistently and cohesively take on the challenges that will inevitability accompany the work.  Clients’ expectations and preferences for receiving their deliverables may be completely different from one another, while the varying teams’ collaboration on achieving the same result may also be unique. How one adapts successfully to the variety of personalities they interact with, styles of work and challenges they face on a day-to-day basis enables the best possible client service and overall leadership within. 

Those who come into this career expecting to have a steady and predictable day to day will have to adjust their mindset. CPAs bring much more to the table than the typical visor-wearing, loud-calculating figure portrayed in cartoons. CPAs offer a wealth of knowledge and expertise across every measure of running a successful business. To become that trusted advisor for our clients or company, we must adapt the services we provide, whether that be advisory and outsourced accounting, human resources, business valuations, estate planning, wealth management, forensic or many others.

CPAs can complete technical trainings and have an abundance of knowledge, but the ability to acclimate to this ever-changing career is a developed skill that is sometimes overlooked as the reason for the success of many leaders. With your CPA license, you have ample opportunity and career path options. And you may find that where you start is not where you end up. Every individual and every business relies on smart financial decisions for success. Executing the details of those decisions will bring many challenges. Adapting to navigate these challenges can lead to a rewarding and long-lasting career. 

“Guilty!” is heard often in federal court, whether the defendant is pleading to the charge or a jury is finding it as a verdict. In cases involving financial crimes, the main witness will be a government employee who is a forensic accountant testifying to the total financial loss.

During the 2022 fiscal year, IRS-Criminal Investigation had more than 1,500 defendants who were sentenced in white-collar crimes. In almost every sentencing hearing, the federal judge will sign a court order requiring the defendant to pay restitution, which becomes a 20-year judgement against the defendant. This judgement allows the United States Attorney’s Office to find and sell the defendant’s assets to pay for the judgement. If the IRS was a victim in the criminal tax investigation, the court order will be sent to the IRS to be classified as a tax assessment, meaning that adverse IRS civil collection actions can be taken as well.

On average, a criminal tax investigation will take 18 months to complete, and that doesn’t include the judicial process of indictment, arrest, trial and sentencing, which can add additional year or two to the process. In many criminal tax investigations, the defendant will need an expert with financial skills to help the criminal tax attorney and defendant. That’s where the CPA is invaluable to the defense team, because the CPA can assist the attorney in evaluating the evidence and independently calculate the loss and possible restitution.

There are a few key areas where the CPA can bring value to a criminal defense attorney and the defendant:

• Burden of proof is different. Calculating the tax loss in a civil audit is different than in a criminal prosecution. The main reason is the burden of proof on a civil audit is on the taxpayer and not on the government. If a taxpayer does not have the proper documentation for a charitable contribution, the IRS can deny the deduction and assess additional tax. In a criminal trial, however, the burden of proof is always on the government to prove the crime beyond a reasonable doubt, whether the allegations are bank robbery, money laundering, illegal drug sales or a criminal tax violation. A deduction on a tax return is assumed to be true until the government proves otherwise. Knowing this burden of proof, the CPA can properly evaluate the loss amount and not rely wholly on the government’s loss calculations.
• 6020(b) calculations. The IRS is in the business of assessing and collecting taxes. When taxpayers don’t file tax returns, the IRS is allowed in its civil authority to estimate the tax due under Title 26, United States Code, 6020(b). And as you can imagine, the IRS will estimate the liability in their favor. If there are unfiled payroll tax returns, the IRS will assume a 20-percent federal income tax withholding rate. This is more than twice the average withholding rate. The estimated amounts under 6020(b) become the basis to calculate the tax loss, and restitution in criminal court. If a CPA is tasked with reviewing tax calculations, one of the first questions to be asked is if the IRS calculations are from the 6020(b) statute.
• U.S. Courts can estimate loss. The federal government is not required to be precise in calculating the loss and restitution. The U.S. Sentencing Commission issues a report every year that advises federal judges on the appropriate sentence for various federal crimes. In white-collar crimes, the financial loss that is attributed to the defendant is the driving factor in determining the length of imprisonment. If a defendant falsified deductions or had unreported income, the courts are allowed to estimate the tax loss using a flat rate (28 percent for individuals, 35 percent for businesses) if a more accurate calculation is not available. The good news is that a more accurate loss calculation can be used if shown to the court.

These three areas are where a CPA can bring value in litigation support in criminal tax cases. If hired, the CPA should review the tax loss through the lens of the government’s burden of proof, question the IRS’s calculations and, if possible, calculate a more accurate amount so that a federal judge doesn’t have to estimate the tax loss.

Worker demands for perks on the job are being met head-on by employers these days. Organizations that are eager to keep talented staff and lure potential new candidates to their offices are developing procedures and creating benefit packages that appeal to the masses, according to Frank Karlinski, a senior vice president at Robert Half on an NJCPA webinar earlier this month.

Currently, he said, there are 11 million open jobs nationally, which is 2 million higher than during 2021. This, according to Karlinski, is “a huge jump.” In addition, the quit level, which is the number of people who are voluntarily leaving their job on a monthly basis, is at about 2.7 percent (4.1 million), which is high but down from the record highs over the summer at 3 percent, he added.

With a national backdrop of a strong hiring market, low unemployment rate of 3.4 percent nationally and unemployment related to accounting and finance of a little over 2 percent, it’s no wonder that retaining people is a top priority, he said. Some of the lowest levels of unemployment are in financial planning and analysis (FP&A), corporate accounting, public tax accounting and audit, and some specific roles within accounting and finance, which are almost at zero unemployment.

According to Robert Half research, national employers are attracting skilled workers by the following breakdown:

• Higher starting salaries (46 percent)
• Signing bonuses (34 percent)
• Flexible work options (33 percent)
• Hiring of remote candidates (31 percent)

Compensation Trends

A common hiring trend currently is employers having to offer higher salaries, he said. “Companies need to be proactive in addressing employee needs regarding compensation. If you are not doing this, you will lose people,” he said. “Signing bonuses is something where we’ve seen a pretty big uptick.”

However, accounting and finance organizations, in particular, are faced with internal equity challenges such as people being hired at higher salaries than what the existing people at a similar level are making. “It’s absolutely a problem and absolutely something that companies need to be proactive in addressing,” he admits. “Sixty percent said existing employees have raised concerns about this. Eighty-two percent have given raises to those who raised concerns. If you are not doing this, from my experience in my day-to-day job, you will lose people.”

So, how does an organization keep people? “It is challenging to retain people because the best people are sought after.” But, compensation helps, he admits, as does incorporating remote and hybrid work options. See table 1.  


Table 1

Hybrid/Remote/Flexible Opportunities

Allowing workers to use hybrid/remote work is a necessity in today’s market. “This is a differentiating factor that employers can offer, and should offer, but there’s a benefit to the employers too.” This applies specifically to remote options, but hybrid options as well, he said. “Flexible work is really no longer seen as a benefit that a company offers it; it’s more or less an expectation at this point.”

And when that kind of work option is presented as too much of a bonus or benefit and not the norm, often employees come to consider it as one of the sole reasons they are working there at all. “Sixty percent of employees are working fully remote or on a hybrid basis at this point. I would argue in New Jersey that number is higher in accounting and finance,” he said, noting that within public accounting he has seen a huge increase in firms letting employees work in this manner. “It’s been a very useful tool in attraction and retention to employees, specifically in public accounting.”

Flexible work schedules and altering times of the workday, such as time blocking and work blocking, are also popular. These have become so much in demand that, according to Robert Half data, more than 40 percent of the current workforce on a national scale is planning to find a new job looking for these attributes, he said. Similarly, more than 50 percent prefer a fully remote position, while 55 percent are open to hybrid schedules. These perks lead to an increase in morale by almost 60 percent, and greater productivity by more than 30 percent, he said.

“There is a big difference being open to a hybrid environment versus a fully remote environment, especially when you are looking at specialized skillsets,” he said, noting that a hybrid employee limits the candidate pool to those who can commute. A fully remote employee gives employers the option to look nationally to fill that role.

“Generally speaking, public accounting has lagged behind private industry in their willingness to have people work completely remote. I am seeing a lot more of it this season, but, as a trend, they are definitely lagging behind industry at this point,” he explained. 

Accounting professionals have been attempting to provide quality information and services ever since cryptoassets became a mainstream financial instrument and asset class, but this has been an ongoing struggle. Due to the lack of authoritative accounting and audit standards directly connected to blockchain and cryptoassets, accountants have been seeking to provide solutions such as proof-of-reserves, proof-of-solvency practices and other services attempting to bring some much-needed transparency and reportability to the crypto space.

With crypto still a new financial instrument, accounting practitioners need to be aware of delivery and expansion issues, such as the following:   

Information Discovery

The ease with which clients — individual and institutional alike — can now enter the crypto space can lead to extremely complicated tax and accounting requirements. There is also the very real possibility that 1) the client, 2) family members of the client or 3) individuals acting on behalf of the client have gotten exposure to crypto without any overt announcement or strategic shift. Drilling down, practitioners should be sure to ask the following questions:

• Who has access to funds or trading accounts at the client?
• What applications or accounts are connected to these accounts?
• Are records and/or documentation from trading or investing activity available for review?

Expanding the Potential Client Base

It's no secret that as younger generations enter the workplace, move into leadership positions and obtain economic clout, technological and other factors accompany them. Millennials and Gen-Z, representing the largest age cohorts since the Baby Boomers, 1) are rapidly integrating in the workforce, 2) are going to be the recipients of the largest wealth transfer in history and 3) are almost universally positive toward virtual payments and currency options. For accounting firms and virtually any other business, appealing to these potential future customers while improving convenience and options for current customers makes perfect sense. Some specific factors and questions that advisors should bring up include the following:

• What is the current payment mix for customers, and what is the cost profile of maintaining this payment structure?
• Can conversations around the possibility of payments be raised with the current customer mix?
• Would cost savings driven by crypto integration justify the expense of implementation?

Crypto Vendor Management

Crypto has had no shortage of issues, failures and bad actors, and all of these factors came to the front burner in a major way during 2022. From exchanges failing and fraudulent coin offerings to criminal activity leveraging cryptoassets, clients of all kinds are likely to ask significant questions. CPAs are well positioned to provide objective and reasonable advice in this area. Since practitioners are well versed in vetting and reviewing vendors in other areas, there are factors and considerations that can be leveraged into the crypto space as well.

• What is the track of record of the vendor in question, and is there a public listing of existing clients?
• Who is on the management team of the vendor in question, and is there public information regarding their past ventures?
• Is there a way to test how crypto vendors, for payments or otherwise, will interoperate with existing technology tools?

Cryptoassets are here to stay; that much is widely agreed upon by developers, investors and policymakers alike. Firms and practitioners must be up to date on changes in accounting and regulatory treatment to best advise both current and future clients.

Consultative selling is the best method that accounting firms can use to avoid coming off as being too salesy with existing clients. As a tool, it requires accountants to ask clients good questions, actively listen to the response, be empathetic and focus on solutions.  

It is important to follow the 80/20 rule. Listen for 80 percent of the time and provide thoughtful solutions for the remaining 20 percent. The client will tell you everything that you need to know to make a sale if you take the time to listen. 

Here are four recommendations for having successful consultative sales conversations:

1. Discuss problems, needs, and wants. Ask open-ended questions to discover hot buttons, issues, challenges, needs and wants by:
   • Letting your client talk. The longer they talk, the more insight they will provide.
   • Asking open-ended questions to obtain a longer response to questions.
   • Listening intently and repeating back information to acknowledge that you understand and, if appropriate, agree with the client.
   • Talking about the client’s problem — not how wonderful you are.
   • Being prepared. Analyze the client’s key performance indicators (KPIs), historical data, industry trends and other relevant issues before the meeting.
2. Present your solution. Once you have a solid understanding of what your client is looking for or what issue they want to resolve, present your solution(s) by:
   • Explaining how you and your organization can solve their problem or meet their needs.
   • Illustrating your points with anecdotes by telling stories about the solution you provided to a client with similar issues.
   • Focusing on the benefits they will realize by expanding the scope of the engagement. Paint a picture in the client’s mind of how it will be once the solution is in place.
   • Watching your client’s behavior as you speak. Then, ask qualifying questions in response to their body language and comments.
   • Allowing the client to ask you questions or provide feedback.
   • Asking closed-ended questions to gain agreement.
3. Overcome objections. Expect objections and be ready to address them by:
   • Repeating the objection back to the client to ensure you understand them correctly.
   • Empathizing with what they’ve said and giving a thoughtful response.
   • Offering proof that you have the solution by presenting statistics to support your claim, telling a client success story, providing a report, earning designations and awards, etc.
   • Confirming that your answer has overcome their objection by asking the client if they agree.    
4. Close the sale. The client will only buy or expand the scope of the engagement once you have presented a solution to their problem, educated them on the value they will realize and addressed all their objections. Ask yourself:
   • Does the client agree that there is value in your service?
   • Does the client understand the benefits of working with you in this area?
   • Are there objections that still need to be addressed?
   • Have you minimized the risk?
   • Are there other factors that could influence the decision to expand the scope of the engagement?

   You may have to provide several forms of proof that your solution is the best to convince the client to buy the service from you. For example, offer testimonials or references, articles from vetted sources, results of research studies and statistics on other clients' return on investment (ROI).

   If you’re not sure if the client is ready to close, ask the following questions: Would you like me to help you implement (solution)? Should we get started? Can I send you a new engagement letter?

   Selling is about helping a prospect find a solution to a problem. All you need to do is educate your client that you are the best solution provider. Approach the process as a consultant — someone genuinely interested in helping — and you will not come off as salesy. Instead, you will be considered a trusted advisor, or if you are exceptional, the client’s most valuable advisor.