would you recommend your cpa firm to a friend?
by rick telberg
for the finance executive
cpas and cfos share a common question: how much longer will their relationships go on?
the question begs another: what might cause the client to switch accountants?
bay street group’s studies of accountant-client relationships go straight to the second question and we’re getting a surprising dichotomy of answers. cpas tended to say one thing, while cfos said another. surprised?
public practicing accountants (47%) seem to be under the impression that they lose clients due to “price, fees, costs, budgets and affordability.”
but finance managers and cfos have a different take. a solid majority (79%) point to “poor client service and lack of attentiveness.” fees and costs ran a significant second, at 66 percent.
back on the cpa-firm side of the question, service was the third most commonly perceived reason for expected loss of clientele. while 35 percent saw service as a potential problem, 44 percent said they could lose a client who died, sold or went out of business.
there’s something wrong when twice as many cfos as cpas see service as the determining factor in client longevity. that might mean that a lot of cpas are failing to offer what corporate accountants want. while cfos seem to think they’re paying for service and attention, cpas are hoping their clients don’t die, move or go cheap.
the other reasons cpas fear they might lose a client were distantly less common. twenty percent thought “bad personal chemistry” might be the problem; 19 percent recognized that they might not be proactive enough; 17 percent figured they’ll beat the client to the punch by firing them for business reasons; and 11 percent worried that the client might take the function in-house.
the third most common gripe among financial officers was “not getting enough time with cpa firm’s best people” (again, a matter of service and attention) at a significant 38 percent. bad chemistry followed next, at 34 percent. lack of proactive advice came close, at 33 percent. twenty-two percent said they might need new or different services.
an anonymous partner in an unspecified cpa firm stated a scary truth we hadn’t expected, except in hindsight: “they don’t need a cpa. they need quickbooks.”
another professional, equally anonymous, expressed an equally common experience: “they want ‘creative’ tax services.”
mark d. estes, cpa, a sole proprietor of a tax and bookkeeping service in columbia, s.c., works just part time, with a full-time job elsewhere. “some clients outgrow my [available] time,” he said.
maybe that’s good, right? these microsofts of ma?ana will never forget who counted their first frijoles.
an anonymous financial officer in government echoed a theme we heard elsewhere: “too long a relationship established.”
hey, it happens. cpa firms and corporate clients aren’t married, you know. they hook up. they date. it’s nice if they go steady. but sometimes breaking up is the right thing to do.
but it’s right only when it’s for the right reasons. for the sake of solid audits, yes. for lack of service and attention, no. service is the responsibility of the cpa. if they don’t give it, it’s the professional duty of a cpa finance manager to change cpa firms.
[adapted from a report first published by the aicpa]
5 responses to “finance execs see service lagging at cpa firms”
robert h. woosley
to say that you are preaching to the choir is an understatement in my case in that our company has created an entire business to help solve this very problem.
?a solid majority (79%) point to “poor client service and lack of attentiveness.”
there is an unfortunate truth that exists with thousands of practitioners. unfortunately cpas do not even receive interim financial accounting information from their business clients! how can they be attentive when they are largely choosing to ignore the very information that would enable them to get in the game?
as i write this e-mail, hundreds of thousands of private business clients across the country have closed their may 06 financials and are in the process of closing their june 06 financials. guess what; the vast majority of the cpas will not see that information until the end of the year. as a result they miss obvious opportunities to create a dialogue around even the simplest revenue, profitability and growth trends. it?s the very information they should be demanding from their clients and its no wonder clients feel under-served.
imagine a world where all business clients upload their monthly financial information to their cpas and that information is analyzed, trended, benchmarked and is available to prompt a conversation between cpa and client. it?s a beautiful thing to see and we are excited about solving the problem identified in your article.
rick, keep it coming!!
robert h. woosley
chief executive officer
ilumen, inc.
atlanta, georgia
aden kuenzi
your conclusion with this data was to suggest something was wrong in how cpas were perceiving the situation versus cfos. i’m not sure i agree with that conclusion, since good client service, and the cost of such service are two sides to the same coin.
i would say that your conclusion also depends on the industry, and size of entities and cpa firms that are being discussed, too.
i can understand why cpas site fee concerns as their number one item, since we’ve experienced it at our firm. this is a front-line battle.
and let me tell you, we give the best service we can possibly offer to those clients that pay us for it.
those that don’t pay us for the service, or are constantly beating us up on fees, don’t get the best service we can possibly offer. they still get service, but not what they could get if they were willing to pay for it.
doesn’t that just make sense? we bend over backwards for those that are generous and willing to pay for our time.
those that expect us to bend over backwards for little cost–well, they might indeed site “poor service”
as the reason they would change cpa firms, but they are giving a ‘red herring’ as their reason, since they expect stellar service for cheap cost.
the real reason is cost.
they are communicating to us what kind of service they want by how little they are willing to pay for it. our challenge has been to find those good quality clients that are willing to pay for the good service. it’s much more fun to serve those type of people, and much more profitable for us both.
i don’t think the cpas and cfos that were surveyed are as far apart as you think.
aden kuenzi, cpa
kuenzi & company, llc
salem, ore.
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missouri cpa
i probably have a bit different take on the disparity between cfos and cpas with respect to why they part company.
i don’t find the apparent differences in perception to be very surprising. my bias comes from being a partner in a cpa firm. i’m sure there are cases where some of us would like to think it’s fees when in fact the service may not have been stellar.
however, my experience is that cpa firms move clients down the priority list for service once they meet continual fee resistance. or they may not provide top notch service to a client who tends to be overly demanding and/or abusive to the cpa firm’s staff.
in a perfect world, both parties would meet and discuss this, and agree to part company if they can’t come to a good resolution. more often, though, both parties are reluctant to have this confrontation and so the cpa firm may simply figure that if the cfo isn’t willing to pay for service, or is overly demanding and abusive, he/she will not get first priority on time and attention.
the cfo may be blind to the reason service is not top notch, but the answer may be in the mirror.
i would caution against necessarily concluding that cfos have the high road on this and that cpa firms simply need to improve their service.
cpa, partner
columbia, mo.
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a. marshall northington
regarding your article about service being lagging at cpa firms: do you just suppose the following perhaps may anything to do with this perception??
1. beginning in 1986 virtually all pass-through entities have switched to a calendar year end and their tax returns must be prepared prior to preparation of the individual income tax returns of the related individuals.
2. a steady increase in cpe requirement for those practitioners who perform yellow book audits where every staff member who works on the engagement now has to have 80 hours of accounting and auditing cpe every two years with the required 24 hours in yellow book specific; then those professionals would have to obtain cpe in other areas that are also constantly changing.
3. cascade effect of sarbanes-oxley where the large multi-national firms are getting all of the talent under contract in the spring semester of their junior year of college and just leaving the dregs for other firms.
4. fasb now up to no. 155-plus issuing pronouncement such as fasb int. 46 ( r ) which is incomprehensible as an english word document.
5. the asb producing pronouncements that just ?rubber stamp? whatever the pcoab proscribes for publicly held entities.
6. refer to no. 3?the profession imposed the 150-hour requirement for licensing and thus today there are fewer number of people applying to sit for the cpa exam?which now is much more expensive to take in the computer format.
maybe their cpa is just out of breath?i know that i am.
a. marshall northington, cpa
wells, coleman and company, llp
richmond, va
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florida cpa
if you were to poll cpas in public practice as to whether or not their service level had slipped, most would admit that it has and we in private practice don’t like it any more than our clients do.
i firmly believe that most cpas strive to do their best. the good news and bad news is that there is plenty of work for cpas to perform.
the good news is that there is plenty of work. the bad news is there is not plenty of available professional staff anywhere in the country (if you know of someone working in an area where that is not the case, please send them to florida).
most cpas in public practice are working even more hours and not less hours in recent years.
staffing concerns effect not only our profession and not “just public practice accounting professionals” but private industry and government as well as many of the other professions. unemployment in our county is under 3% (again, a good thing).
demographically, i don’t see an improvement coming in the next ten-twenty years.
however, our profession needs to do what it can to step up the efforts encouraging students to enter the accounting profession. there are plenty of jobs available. we do not need to erect or keep barriers in place to those seeking to sit for the exam or cross state lines.
reciprocity needs to be easier. if someone is a cpa and is meeting the cpe requirements, why is there any other reason to not grant a license in any other state?
florida has had a fifth year requirement for quite a while. personally, i was fortunate enough to have passed the exam prior to the 1983 effective date. my retired senior partner was very much involved with the initial enactment of the fifth year process. i’m not convinced there has been a benefit to the profession and the state board makes it difficult for students working on their fifth year to know what courses will count. it is very difficult to determine “if a class qualifies” until after the course is taken. “take the course first, then apply” seems to be the response. this procedure doesn’t work and is very time consuming, frustrating and costly to the student.
i have personally seen where a graduate level law course was determined not to be acceptable when the content and course outline clearly demonstrated that the course was different than the undergraduate course. the phoenix online graduate course was deemed to be a duplicate and the individual was told that an acceptable alternative would be a law course from the local community college?
i don’t think it was a coincidence that the denied course was completed online from an out of state school (this same individual had completed the masters program through phoenix).
an experience requirement (like there was before) is probably a better answer or perhaps and “either/or” process would work. the alternative of a two year experience requirement or a fifth year of courses i believe would work better as the required prerequisite for the exam.
it would be difficult to get the universities to agree as graduate level courses cost more per hour and without the 5th year requirement the schools would certainly lose tuition dollars. based on what i read, it seems the state societies support the current process.
i am convinced if they polled the members in public practice (and our colleagues in industry and government) the results would likely show that both the reciprocity rules and the 5th year rules need work. of course, i would like to separate the votes of any cpa members currently teaching in the university system.
one more point in response to your article on financial executives – why not ask the specific ones complaining about the level of service if their firm has hired any cpas from the ranks of their audit or tax firms in the last five years.
we’re all competing for the same employees – there currently are not enough out there to go around.
“florida cpa”
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