Source: Bowman FirstAlert

Bowman asked some of the profession’s best thinkers to comment on the accounting profession’s challenges to:

·          Increase profits while working smarter rather than harder.

·          Use technology to streamline operations.

·          Choose between attest and consulting.

·          Decide on niches to serve.

·          Explore merger to add talent and services to meet client needs.

·          Differentiate their firms from their competitors.

·          Develop a culture that motivates and attracts the best talent to achieve excellence.

·          Build a leadership training program to prepare for the next generation of partnership.

·          Create and track a strategic plan.

·          Increase shareholder/partner value.

Here are some comments from the group on the challenges and the trends:

Sam Allred, Upstream Academy: Every firm leader has the responsibility to prepare his or her successor. Firms can’t wait for the new leaders to magically appear. It takes serious planning. Because of poor planning, many firms will have less value to successor firms. There will be too many firms for sale.

Gary Boomer, Boomer Consulting: Partners need to more involved in thinking and planning, and focus less on chargeable hours. Pay for performance is the trend in partner compensation, with performance measures centering on processes, client satisfaction, staff development, and financial issues.

Jean Marie Caragher, Capstone Marketing: Partners want to know what other partners are doing with their marketing time. This calls for more accountability for business developed, referral networks developed, client retention, etc. You must get face-to-face with prospects. Don’t hide behind newsletters, Websites, brochures, etc. Not all marketing is good. Your targeted clients should be  companies with the characteristics of your best clients. Marketing professionals will become principals. Firms will hire business developers.

Gail Crosely, Crosely + Company: Face-to-face calls on prospects should be one-on-one, not in packs of two or three. The audit committee will become more active in selecting providers. CPA firms should interview audit committee members and debt holders to determine whether the opportunity is worth their time.

Roman Kepczyk, InfoTech Partners North America: By the end of 2005, the majority of firms will have digital document storage and retrieval systems in place, and will be changing their processes to manage work flow more effectively. Privacy and security anxieties about client data will lead to HIPPA-like legislation requiring firms to be completely digital in the next two years.

Allan Koltin, PDI Global, Inc.: Firms should take off the gloves and compete for people as aggressively as they do for clients. We are going to see an exodus of tax partners from the Big Four. They will go to smaller accounting firms, law firms, or on their own—looking for referrals from other accounting firms. It’s an opportunity to find tax people. 

Bob Martin, Martin & Associates. Successful upward mergers are more likely when everything is going well and you don’t need to merge. Large firms look for a surplus of talent in a merger candidate. So firms that think they will be attractive merger candidates when the partners are in their sixties will be in for a shock.

Gerry Riskin, Edge International. Most professionals are not reading trade publications in their clients’ industries or attending their conferences. They don’t know the clients as well as they claim. They will have to do so to create client trust.

Gary Shamis, SS&G Financial Services. Firms will be downsizing, rightsizing, and becoming more selective in client retention. The staffing shortage will end in two or three years as all the preliminary SOX 404 work is concluded and increasing numbers of accounting students are graduated.

From Bowman FirstAlert, Bowman Communications, Inc., Atlanta, GA 770-972-0783, awbowman@bowmancomm.com. The full report is available for $100, or free to subscribers to The Accounting Report by Art Bowman (subscription price $299 per year).