Business as we know it is transforming.

With this transformation comes change from our customers — they are smarter and more engaged, and, as a result, they expect more. We have to figure out how to make our trusted advisor relationships work today so that our new customers have a pleasant experience. In my next five columns, I will tell you what you need to know to start the process of “radicalizing” your firm.

But first, let’s take a moment to look back. Many of us have the inherent tools we need among us. It’s time to express that wisdom and knowledge through new external tools.

Take, for example, Ed Mendlowitz, one of my favorite CPAs of all time. He tells stories of what an “old-school” accountant would do in any given situation, and recently wrote a blog on about how his old boss, Mr. Ruben, ran his practice. I thought it would be fun to compare how accounting has changed since those days.

Ed: “On an early job I had — in a time long, long ago with no computers, smart phones, copiers, or electronic adding machines — I used to go to a client in the morning, write up their books, prepare a financial statement, drop it off at the office at end of the day, and then go home.”

Radical CPAs: Log in and complete that above work in minutes, and complete online financial reports in perhaps a half hour.

Ed: “The secretary typed the report in the morning. I often wondered what my boss Mr. Ruben did, and whether there have been any changes in that in the half century since I started?

“There have been no changes — or to state it more clearly — there should have been no changes. Here’s why: My boss took the typed financial statement to the client, sat down with him for an hour or so, and talked about the business. On some basis, the statement was the admission ticket to the discussion.

“What happened was that Mr. Ruben would discuss the previous month and the year-to-date results. They would review any differences in items from what was normal or what was expected. They would also compare this year to the previous year or two and possibly the next year or two. They would look at trends that were either starting, developing or continuing.”

Radical CPAs: We don’t need someone to type the financials and that same conversation can now happen in near real-time via video. The analysis can be done daily, weekly or immediately at month end. Because we are in real-time, we can impact a small business quickly. Many people think that virtual is less intimate; however, it can actually be more intimate due to the frequency and timeliness of the critical conversations.

Ed: “Taxes were always an issue, so Mr. Ruben would discuss the projected taxes and determine whether they were on target, as well as the potential to reduce them. If time permitted, they would discuss the client’s plans for the future, any new products in the hopper, the need for additional financing, bank loan covenants being met, and bank charges if the client was factored or had rigid compensating balance arrangements.

“They also discussed key employees, adding or reducing personnel, new equipment needs, whether moving was a thought, and any plans the owner had — if any — to sell their business, buy another one, groom a successor, or retire. While they were at it they discussed the client’s personal wealth accumulation, his investment portfolio, and whether the business’ value was growing.”

Radical CPAs: We keep taxes in conversations so they are part of the broader plan. They can also be paid immediately if the client chooses, as our calculations can be in real-time. As a result, the conversations can now be around other key performance indicators related to a specific product cost or a marketing initiative. Online lending, cash flow, and maintaining virtual workplace cultures are all now regular topics for discussion.

Ed: “So, that is what Mr. Ruben did, and my question to my readers is, ‘Is this what you do?’ My partners and I do this, if not monthly, then at least four or five times a year. This is the way you form relationships and bond with a client. This was so 50 years ago, and also when my father did it in his practice 30 years prior. And neither Mr. Ruben nor my father lost clients because of inattention, or because something was going on they did not know about. This is how they became their clients’ ‘trusted advisors’ long before that term was ever coined by a professional association.”

Radical CPAs: I wholeheartedly agree that the above makes us trusted advisors. To kick it up a notch, work with your client in near real- time and you too will see that the trust and intimacy that Mr. Ruben knew can be amplified in the cloud. The Radicals are working this way now.

Thank you Mr. Ruben, and the Eds of the world who have gone before us in our profession. You have paved the way.

Jody L. Padar, CPA, MST, is CEO and principal at New Vision CPA Group and author of The Radical CPA.

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