Does trusted mean valued?
There is a lot of truth in the statement I can’t stop repeating since hearing it at a conference last year: “We will never see the pace of change slower than it is right now.” That is a scary thought for many of us who have come up in professions largely steadfast in much of their tradition. The trouble with tradition, sometimes, is that it becomes dated. Below, I will make the case that the CPA profession, while still important to society and the business world today, risks becoming outdated tomorrow.
Advancing technologies are quickly taking over tasks that many in the CPA profession have built their entire livelihoods and practices around. Technologies like artificial intelligence, blockchain, machine learning, robotic process automation, and more, are disrupting the status quos across every industry. And, yes, that means in every industry CPAs touch (keep in mind this is status quo for new generations coming up in the CPA profession now). From accounting to analysis, audit to tax, financial planning to risk management, there is — or soon will be — a technological option for it all. However, while technology itself may be the driver of much of the change and disruption we are witnessing in the business world, it is only part of the disruption CPA firm and accounting and finance leaders must face.
The American Institute of CPAs predicts inter-related impacts in hiring practices and new client demands will significantly change the CPA profession moving forward. I will go so far as to say that the sustainability of the CPA is at risk if we don’t start to rethink, redefine, and rebrand what the CPA is to the business world. CPAs have hung their hats on being “the most trusted business advisors.” Now, I contend that CPAs must become “the most valued and strategic business advisors.”
Think about this. In 2018, the World Economic Forum’s “The Future of Jobs Report” identified the top 10 roles it expects to decline by 2022. “Accounting, bookkeeping, and payroll clerks” ranked second on the list and “accountants and auditors” came in seventh. Looking to 2020, the World Economic Forum’s top 10 most in-demand jobs list pegs “accountants and auditors” at No. 10 — bordering on the brink of falling off the list.
To ensure the relevance of CPAs and the CPA profession, it is time to look beyond the traditional tax, accounting, and audit services — what I refer to as compliance services — that CPAs have built their reputations on. For years, being experts in these areas has treated CPAs amazingly well, but we cannot overlook that companies and clients today are demanding so much more from their business advisors — think deeper strategic insights, data analysis, and predictive analytics, just to name a few. (Hint: “Data analysts” and “management analysts” rank No. 1 and No. 5 on the World Economic Forum’s 2020 top 10 in-demand jobs list.)
Further, from Wall Street to Main Street, every business needs top-line revenue growth to remain viable and successful. But how often do businesses turn to their CPAs for help in growing their revenues outside of those one-off cases when they call with questions? By nature of the accounting, audit, compliance, and tax work CPAs commonly perform for their clients and companies, they know more about the inner workings of these businesses than most. What are CPAs proactively doing with this knowledge?
A recent survey asked business owners what they would want most from their CPA if they had a magic wand. “Profit improvement” and “strategic planning” were among the top answers, which makes it clear that these aren’t services that CPAs are commonly selling. Meaning, that CPAs’ deep understanding of their clients’ businesses is not being leveraged into other services. Why not? While fretting about technology’s impact on the CPA profession and the broader business world, CPAs are missing out on capitalizing on a vital area that cannot ever be automated: strategic insight.
When we look at some of the traits that define great CPAs — the ability to dissect and understand a problem, analytical and communication skills, mastery of information, and being able to analyze data to drive decision-making — it is clear that there is nobody better to meet the evolving service demands of clients and companies. And thanks to technology, CPAs have more data and tools than ever to provide new services and deeper insights in an efficient, cost-effective manner.
But the general public still hears CPA or CPA firm and thinks of accounting, audit, and tax. And, too often, CPAs are their own worst enemies, defining themselves in these same limiting terms. While we historically regard CPAs as being the most trusted business advisors with broad business skills, we increasingly see recruitment of non-CPAs for advisory and consulting roles. Why? Because CPAs largely are — and have been — selling themselves short. This needs to change.
A senior partner I know from a relatively large firm recently told me about a meeting with a client about providing expanded services. The client’s initial reaction was along the lines of, “We don’t need anything else from you, because we’re happy with our audit and tax services.” Yet, when the partner dug deeper, the client needed help making sense of the company’s ERP system data — the senior partner’s CPA firm had the capability to help with that problem.
My point here is that CPAs are only limited by themselves. Yes, public perceptions need to change. That will happen as CPAs celebrate and promote not just the skills and services that made them the most trusted business advisors but also the ones that will make them the most valued and strategic business advisors moving forward. The winners of tomorrow will be those who move from being assemblers of information to being business strategists that help drive companies’ top line revenue growth and success. Clients and companies will always need strategic advice and insights to help grow their businesses. If CPAs don’t provide it, someone else—or maybe something else — will.
This article is reprinted from the Insight Special Feature, “Trust Is NOT Enough,” which is available for download in its entirety courtesy of the Illinois CPA Society at www.icpas.org/trust.