Times are good for accountants, but that doesn’t mean the profession can afford to stand still, according to Illinois CPA Society president and CEO Todd Shapiro.
Citing statistics from a recent society survey that found that at least 85 percent of members are optimistic about the future of the profession and about their own situation, Shapiro asked during a keynote Tuesday at the 2019 ICPAS Summit in Chicago, “How do we maintain that optimism for the profession? How do we continue to be viewed as a leader in the business community?”
A wide range of factors are already combining to undermine the optimistic position on the future, from automation and commoditization via technology to slowing numbers of young graduates entering the profession and pursuing their CPA licenses.
“I worry about the value of the current compliance services,” he said in a separate interview with Accounting Today. “In the next five to six years, those services will come under tremendous fee pressure, and suddenly you don’t have that excess cash flow, and you’re in a position of weakness. You may lose clients to more nimble firms down the street.”
The answer, he told the 900 or so CPAs in attendance at the Summit, is for accountants to go beyond the “most trusted advisor” role they currently occupy.
Accountants are trusted to conduct a successful audit, and to prepare a tax return that nets their client the largest refund, but that level of trust isn’t enough for the future, according to Shapiro.
“Name a business that got to be wildly successful through a successful audit,” he challenged the audience. “That’s a critical service that we provide, but no business ever got more profitable because of it. Name me a business that became wildly successful through a tax strategy.”
Instead, accountants need to go beyond that level of trust, to become their clients’ “most strategic valued advisor” — offering insights and strategic advice that make their clients’ businesses much more profitable.
“Who knows more about the underpinnings of a business than the CPA?” Shapiro asked. “What clients really want is profit improvement ideas and strategic planning. Some accountants say, ‘We don’t do this, we do tax and audit’ and some say, ‘We do this, but we don’t charge for it, because we charge for the tax return and the accounting’ — but if we move to this, it will cement our value for years to come.”
No easy task
Shapiro acknowledges that pivoting to proactive business advice, with CPAs focusing on the future of their clients, rather than their pasts, won’t be simple or easy.
“What I am suggesting is very hard, and it requires exhaustive thinking,” he told Accounting Today. “There is no checklist for this — this requires ground-up thinking. But that shouldn’t be a reason not to do it.”
Nor, he pointed out, should accountants’ concerns about the risk of making predictions be a reason to avoid giving advice to clients.
“People think providing strategic insights is just guessing, but most forecasting is about looking at what has occurred and analyzing that looking forward. It’s not making things up about the future. It’s making educated estimates based on historical knowledge or environmental knowledge of the market,” he said. “You’re not guessing — it’s looking more closely at current data and trends, and projecting out from that. It very much ties into what CPAs do.”
“Someone told me, ‘CPAs aren’t strategists,’” he said. “Show me a CFO who’s a CPA who’s highly thought of, and I’ll show you a CPA who’s a strategist.”
Others, he noted, may be worried about the risk of offering forward-directed suggestions: “They ask, ‘What happens if I give them advice and it goes bad?’ Well, what if you give them advice and it goes well?”
The upsides are enormous, Shapiro said, including more profitable clients and larger fees. “Your clients are going to view [this strategic insight] as highly valued,” he explained. “And if you’re driving greater value, you can charge more — and it has nothing to do with the time you’re spending.”
Moving to strategic advisory services can also help with staffing. “It’s exciting, it’s not methodical, it’s not that compliance work,” Shapiro said. "You want to attract qualified people? Provide them exciting work.”
“You’ll attract the best and the brightest because you’re asking them to think — to become business professionals,” he continued. “‘We don’t teach you to be a tax preparer or auditor. We want to teach you how to provide business advice. You can spend your first four years in accounting learning tax and audits, or you can spend it becoming a business strategist.’ Younger staff are much smarter than we think. How can we help them become strategic advisors? Challenge them — help them build their careers.”
