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My CPA doesn’t do that!

When I started my own public accounting firm, most of my work was preparing tax returns and financial statements. This work is certainly necessary since the Federal government requires the filing of tax returns and banks will not issue, or renew, a line of credit without a financial statement prepared by a CPA.  In the ten years I previously spent at a medium sized CPA firm, the majority of my time was spent auditing, preparing financial statements, preparing, and reviewing income tax returns. So, I thought, that is what a CPA does!

I soon realized that, even though I was providing an important compliance function to my clients, I was not contributing any value to the company’s bottom line. So, I thought about how I could help my clients streamline their operations and improve their profitability. I became proactive in asking my client questions about his/her business and looking at the big picture of how he/she runs the business.

In short, I changed the way I viewed myself, from a provider of tax returns and reviewed financial statements, to a trusted advisor – essentially the client’s interim Chief Financial Officer (CFO). I decided to learn all that I could about each of my client’s operations, so that I could provide as much assistance and advice as possible.

 I usually began by asking my client this question:  “What major concerns do you have about your business?  What keeps you up at night?”   This question would get them thinking and talking.  I would listen intently and ask follow-up questions. I probed deeper into other aspects of the company. Is management receiving the timely and accurate financial information that they need to make informed management decisions? Typically, I would develop sample reports, either from their accounting system or from raw accounting date using Excel, and ask “Will this information help you run your business?” Do the members of management know how to apply this information?  I would suggest ways to use financial information to produce better operational results.

The upshot of this is that my clients appreciated my observations and began to ask more questions. One client invited me to lunch and peppered me with questions and problems for almost two hours. I spent so much time answering questions and taking notes, that I was not able to finish lunch. Other clients would call me and say, “I have been thinking about buying another business, or opening a plant in Illinois, or taking on a new line of products, or this other business I invested in is not doing well, or …. . Dennis, what do you think?”

I even interjected myself into non-financial areas. If I did not know the answer, I brought in an expert. One quick example: I was at my client’s office and I asked the CEO if the receptionist, who was eight months pregnant, was going to return to work after her maternity leave. His answer was “I am going to fire her today!”. I stood up, closed his office door and advised him of the potential consequences of that action. With the assistance of his corporate attorney, I was able to dissuade him from proceeding. And, yes, this really happened.

Recently, I met with a potential new client and described some of the ways I could help her. She appeared shocked and said, “My CPA does not do that!” I told her that what he did, and did not, do was very common among CPAs, but that I have a different approach.

What do you want your CPA to do for you and your company?

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