Does it sometimes seem as if your longtime accountant, that calm, analytical, type-B personality, has recently taken booster shots?
Where once he may have been content merely to visit with you occasionally for a chat about the balance sheet, perhaps throwing out a couple of ideas about better managing cash flow, does he now seem to routinely explore you and your entire operation for opportunities to layer in other than his traditional services?
Does he, in short, seem to be trying to turn himself into a management consultant?
You’re fully justified in your suspicions, because the accounting profession is indeed going through a bout of serious soul-searching about its place in the financial marketplace. As a wave of consolidation has hit the profession, making the large accounting firms larger, and as even smaller firms have begun adding related in-house offerings such as financial planning services, the traditional mid-sized accounting firms catering to privately held businesses are left with something of a quandary: How best to position themselves in the escalating competition for clients?
You can hardly blame accountants for not wanting to remain pigeonholed in the role of bookkeeper, auditor and tax-return preparer. After all, as automated accounting packages increasingly penetrate the market — there are scattered reports that companies as large as those with $2 and $3 million in annual revenues are using them to prepare tax returns — accounting firms throughout the country are trying to head for higher, drier ground.
And what looks best? Why, business consulting, of course, where large shops like Andersen Consulting make billions of dollars in fees.
But for dozens of smaller and mid-sized accounting firms in this area, the question remains: How to recast their services, and where to find higher-level consulting talent?
Consider the firm of Zalick, Torok, Kirgesner, Cook & Co. As accounting firms go, it’s resolutely middle-of-the-pack. With offices in Broadview Heights, Medina and Mentor, it employs about 30 professionals, 43 people in all. It has a few hundred corporate clients, the majority in the service sector, but plenty in manufacturing, too. And it has more than its share of automobile dealerships.
It, too, is struggling to keep up with the changes in its industry. However, says principal Tom Bonus, “I really believe that the consolidation our industry has gone through has done the industry a favor, because with consolidation, you won’t be able to sit on your hands and crank out tax returns. If you want to prosper, you’d better provide value-added services.”
Which is where Bonus comes in. About a year and a half ago, he joined Zalick, Torok from the larger, better-known firm of Cohen & Company.
“They understood the need to grow in the value-added area,” he says of his current firm. Armed with an MBA and a deep Rolodex from his many years in accounting, he now heads up a group called the business growth specialists.
By whatever buzzword it goes, the notion is fairly simple. “Our job as a business advocate is not to have all the answers. We just need to ask good questions,” he says, sounding like a consultant. “The client typically knows his business better than any outsider. In the short run, every client should be a good technician, but then pull back to be a thinker for his business. And hire others to work in his business while he works on the business.”
Take a recent engagement in which he convened a focus group with the employees of one client, who owns about 20 fast-food franchises. He got the employees together for some unstructured talk, with the goal of eliciting useful operational insights to pass along to his client. His findings? The middle-management group was weak.
“When I put together a matrix [of responses], the client was amazed. In his 20 years, he hadn’t found some of this.”
This kind of value-added approach, of course, is utterly dependent on accountants bringing to the table the kinds of business analytical skills that go beyond delving into the numbers — though that’s obviously crucially important, too. Now, they must also be able to wade into the softer issues involved in running businesses, like personalities.
Bonus defends traditional accountants.
“A CPA is like a continuing MBA — they’re in and out of a lot of businesses, and they see a lot of things,” he says.
At the same time, he readily concedes they will have to broaden their perspectives. While in the past, accountants mostly performed discrete tasks such as audits, “Now we’re being asked to change to something that doesn’t have a beginning or an end. When does adding value end? It involves reading and thinking and going to client meetings where you don’t know how it will come out. When I went to that [client] focus group, I didn’t know what to expect.”
These more amorphous assignments “can be a challenge to the [traditional CPA] compliance mentality.”
In the meantime, don’t be surprised if you never again bump into a self-described accountant at a cocktail party.
“When people ask me what I do, I don’t say I’m an accountant,” says Bonus. “I say I’m a business growth specialist.”
John Ettorre ([email protected]) is a contributing editor at SBN.