The accounting profession certainly has its share of challenges, but with increasingly complex regulations and reporting requirements coming at a time when more than 10 million small business owners are planning to exit and $90 trillion in wealth is expected to transfer between the generations, accountants have never been more important.
Clients are increasingly turning to their accounting professionals for more than just bookkeeping, tax returns, and payroll. They are expecting more information, more advice on demand, and more help with their complete financial lives. Are firms ready to evolve to meet those demands?
The jury’s still out.
However, two of the profession’s most influential change agents, Alan Whitman, CPA, and Susan Bryant, CPA, CTC, are out to change that mindset.
Bringing a vision to a top 10 firm
Whitman is the former CEO and chairman of Baker Tilly, one of the 10 largest accounting firms, and currently an advisor and coach to CEOs. In just a few years, he tripled Baker Tilly’s revenue from $475 million to $1.5 billion compared to organizations of that size.
“After I was elected to be CEO in 2015, we did a lot of things differently, said Whitman on my podcast. “We changed the focus from ‘can we actually do it?’ to ‘what will it take to get things done?’ If you're really going to achieve great things in a short period of time, you need to Break the Mold™.
“Think about a production mold; it’s meant to produce a systematic, easily replicable, repeated result,” he continued. “It’s the same thing over and over and the epitome of ‘the way we’ve always done things.’ We will continue to use the same process to churn out the same result unless someone comes along, breaks it, and creates an entirely new mold.”
According to Whitman, organizations that intentionally break the mold have these seven attributes in common. They:
- Challenge the status quo.
- Build things from scratch.
- Ask “what will it take?” when considering new ideas.
- Seek new perspectives from people outside your lane.
- Assume what’s working now will not necessarily work in the future.
- Listen to what your people and your customers really want.
- Never assume “the way we’ve always done things” is the optimal way to get things done.
For Baker Tilly, Whitman said that meant things such as:
- Exploring a four-day work week.
- Acquiring new firms and adding leaders with new perspectives.
- Embracing remote work and that the office was a place, not the solution.
- Creating personalized development plans optimized around remote work.
- Ditching the busy season “badge of honor” and finding new ways to work.
- Being willing to move away from a chargeable hours-based accounting model.
- Building team member work plans and work weeks around outcomes, not hours.
These would be seismic shifts for any size firm, let alone an organization with 43,000 people in 700 offices across 141 territories. Whitman conceded that many of these dramatic shifts were already underway before the pandemic, but the crisis turbocharged them forward.
“Things happen gradually then all of a sudden,” he said.
How to take your firm to the next level
Susan Bryant, founder of Unboxed Advisors told me on my podcast that most firms won’t change overnight. She said staff and clients might be willing to evolve, but owners generally won’t let go of legacy mindsets such as billable hours, every day in the office, and partners working in silos with clients they own. But she said that’s not going to cut it anymore if we want to “retain our position as the most trusted advisors to business owners.”
According to Bryant, here are the six most important areas where you can take your firm to the next level:
1. Organizational structure. “We need to do away with the old flat organization in which a partner owns each client,” said Bryant. Instead, she said the entire firm should take ownership of servicing the client, similar to how a corporation serves each customer.
2. Learning to say no. “In the old model, firms try to handle every client that’s referred to them. In the new model, firms are more selective and intentional about the kinds of clients they choose to work with.”
3. Technology. Bryant said new systems for automation must be championed in areas such as automation of workflow, accounts payable, accounts receivable, and journal entries, including accruals and revenue recognition, for example. She also said there must be a commitment to integrating apps, advocating for firms to move toward using data warehouses and related reporting so they can “actually use their information” in a meaningful and proactive way—not just being financial historians.
4. Processes. According to Bryant, technology tools will drive the systems and processes that must be well-constructed and streamlined to yield consistent customer results. She believes new client onboarding is one of the most fertile areas for transformation. “With the client’s help, opportunities are prioritized and integrated into the ongoing services. As the opportunities or problems are addressed, ROI is measured and the client receives a very clear report showing how the firm is delivering value.”
5. Pricing. As many of my guests have told me, the days of billing clients by the hour and surprising them with a big invoice, even if favorable outcomes aren’t achieved, are in the rearview mirror. “We need to be specific about the services we are providing to clients and how we are billing for those services,” said Bryant. “By switching to value pricing and fixed-fee work, we’re in a better position to measure our results and provide clients with a clear calculation of the return.”
6. Collaboration. As I’ve long maintained, modern accounting firms are moving to proactive collaboration from a reactive financial historian mindset. We can’t keep working in isolation. We must bring in other specialized advisors, much like doctors do, when a particular issue or complex client situation arises. “It's about looking at the customer holistically instead of only through the lens of debits and credits,” said Bryant.
It’s time to roll your sleeves up
It’s clear to me that the CPA’s and accountant's relationship with financial advisors, estate planning attorneys, corporate/M&A attorneys, bankers, and other professionals must change. Modern accounting firms must stop simply referring clients to these specialists and get more involved in shaping the client’s 360-degree financial future.
The modern CPA should be comfortable in the quarterback role, tracking relevant information and helping each client navigate the path forward to make optimum, results-driven decisions.
My new book “A Holistic Guide to Wealth Management for Accounting Professionals” has much more about collaboration with outside professionals.
DISCLAIMER: https://www.arrowrootfamilyoffice.com/disclaimer/
