When CPAs and Clients Don’t See Eye-to-Eye

Clients may not be as reliable as many CPAs think.

If you’re a client, what do you say?

by Rick Telberg
At Large

We’re not quite sure what to make of two issues emerging from our canvass of finance managers and public accountants.

On the one hand, 38 percent of CPAs are saying in the preliminary findings that they’ve been working with their clients for five to 10 years, and another 34 percent are saying more than 10 years. So what does it mean when only 29 percent of clients tell us they’ve been with their CPA firm for five to 10 years, and only 29 percent say more than 10 years?
Add it up and we get 72 percent of CPAs seeing themselves in long or pretty-long relationships with their clients, but only 58 percent of clients are seeing themselves the same way.

Maybe optimistic estimation accounts for the difference, or maybe somebody’s clients are shopping around.

We’d discount the difference as insignificant, but we’re finding a parallel difference in another pair of questions. When we ask CPAs whether they think their clients would recommend them to their closest friends, 81 percent say most or nearly all of their clients would do them that favor. Only two percent thought fewer than half their clients would recommend them.

But when we ask CFOs if they’d recommend their CPA firms to their friends, only half say they’d do so.

And half, of course, said they wouldn’t.

Someone, it seems, has a perception problem. And someone else has some unaired issues with their CPA firm.

We sure wouldn’t want to be one of those CPA firms whose clients wouldn’t recommend them, nor would we want to be in the dark as to why. Hoping to shed a little light on the problem, we’re probing for comments from CFOs and CEOs on the corporate side of accounting.

Did we detect a bit of irritation in a comment from Jeffrey Lauder, CFO of Senior Spectrum, a not-for-profit in Augusta, Maine? Asked what clients really want from their accountants, he told us: “More regular communications that are relevant, not just general interest newsletters.”

We can almost see him tossing his CPA’s newsletter into the junk mail pile. How long until the CPA firm follows a similar route?

We’re hearing similar words from the other side of the country –Seattle, Wash., where Krista Mann, a financial officer at Adolfson Associates Inc., says accountants “should be thinking about their clients and know how to apply knowledge to their clients’ business.”

Dropping down to the southwest corner of the country, we hear similar words to the same tune. Bruce Codding, a chief executive at Librx in San Mateo, Calif., says “Be proactive in providing developments (e.g. an electronic newsletter) and personal advice (periodic in-person meetings).”

And from the southeast corner, we hear from Bryan Overcash, top-level officer at Global Contact Services in Salisbury, N.C., expanding on the same theme: “Client contact throughout the year,” he said. “Let us know you care. Proactive tax advice. Not just how to stay out of trouble but some actual creative suggestions!”

If that’s what CFOs say, what do successful CPAs say?

Looking to CPA firms that consider themselves well appreciated and with long-term clients, we take seriously the advice of Ron Dickinson, head of Dickinson & Clark, CPAs, P.C., in Council Bluffs, Iowa (conveniently in the center of the aforementioned four corners). He reported that most of his clients (60 percent to 80 percent) would recommend his firm to their friends, and his clients have been with him for an average of over 10 years.

So he must be doing something right. And guess what: he had pretty much the same advice.

“Meeting one-on-one at least quarterly to discuss their goals and strategies,” is what he told us clients really want. “Helping them focus on cash flow and performance measurements to fulfill their more critical success factors.”

So that’s the word from the four clients at the corners of the country and a solid CPA at the center? If CPAs and CFOs aren’t seeing each other through the same lenses, maybe this transcontinental cross-section will help them reach a truly mutual appreciation.

We hope so. That, after all, is why we’re here.

[First published by the AICPA]

Posted at August 20, 2006
Filed Under BSG [CPA TRENDLINES] |

Comments

5 Responses to “When CPAs and Clients Don’t See Eye-to-Eye”

  1. Dennis Howlett on August 21st, 2006 4:30 am

    Rick - this disconnect is something we see mirrored in the UK. My sense, having been on both sides of the fence - is that the ‘old’ style practicing CPA/CA just isn’t equipped to service their industry colleagues in the way those clients want. Practitioners enjoyed an uptick through compliance related work but that’s over. It’s unsustainable.

    I’ve been pushing the new forms of communication - blog/wiki etc as the technology base - for nearly a year now. It is hard work and take up is glacially slow but there are a few stars out there.

    But it ain’t all bad news. I am seeing glimmers of light here and there, with some excellent examples of innovative thinking and practice. There’s a long way to go, but the show is rolling, albeit slowly.

    I’d recommend talking to Malcolm McLelland at Purdue Uni - he has some interesting insights that might help get a better understanding as to root cause issues.

  2. Peter Land, CPA on August 22nd, 2006 3:47 am

    Ethics, ethics, ethics. That is a list of the three biggest problems I have with my clients. The clients who would not recommend me? ?He won?t let me deduct my?..? Hell, I don?t want their friends in here anyway.

    I had thought I had a fairly clean group up until this summer when I discovered a long time client had been outright lying to me for years. I am presently in the process of cleaning house.

    I am beginning to have problems with my elderly clients. I call the problem CRAFT. Can?t Remember A F***ing Thing. Stock trades, estimated taxes, gifts to children, my tax organizer and who knows what else. I would guess that when the baby boomers get a little older this issue will become a big compliance problem. I just hope I?m retired by then!

    Peter Land, CPA
    Lebanon, NH
    .

  3. Paul Casey, CPA on August 22nd, 2006 5:18 am

    I think you have been wrestling with a perceived issue of CPAs thinking their clientele is safe while CFOs are fairly willing to toss their CPAs overboard. But I think you are missing the boat on this one.

    By the way, I enjoy your newsletter article each week, and will have to re-enroll, now that my spam-blocker has sent the last issue packing.

    Here’s my take: any business large enough to have a CFO is likely to be in a different market than smaller businesses with bookkeepers or owners doing the accounting. CFOs are likely to see audit and tax as commodity items, willing to put them out to bid for a better price. These CFOs have mastered a lot of the routine issues, sometimes more so than the CPA firms. Small business owners are much more likely to be joined at the hip with a good CPA.

    Last week you used the example of a sole proprietor who happily thought most of his clients would recommend him. You can, thankfully, put me in that category. But, on average, I don’t think sole proprietors have too many audit clients with CFOs. I would venture to say most sole proprietors don’t do audits, since the compliance costs for a firm don’t justify doing just a few. And how many audits can a sole proprietor do?

    Just for reference, I am a sole proprietor with 14 years experience (the last five on my own). I am the part-time Controller at six clients, I consultant with a few more, and also have a small tax practice. I fill the need for high-end accounting at small companies that couldn’t afford a full time Controller but still need quality monthly reporting and year end audit preparation. My six main clients get annual audits or reviews by larger local CPA firms. I was usually referred in (by the larger CPA firms) when there was a mess to clean up or a vacancy to fill, and, thankfully, I’ve been asked to stay on long term.

    I think, by default, when you poll CFOs, you are polling larger companies.
    When you poll CPAs, you are polling smaller firms, most of which have bread and butter clients who don’t have CFOs. If you are polling Joe and Suzie, auditors at KPMG, are they really giving you good feedback at how their Fortune500 clients would recommend them? Examine the size of the CPA firms responding, and ask yourself: how many of these CPAs have clients with CFOs?

    I think that is where the perception problem is.

    On the other hand, practitioners have to grow and stay ahead of their clients. If I sit back and idly perform the same functions year in and year out, never adding new value, I’ll become the mess someone else comes in to clean up!

    Paul Casey, CPA
    Duxbury, MA
    .

  4. Marguerite I. Harkness, CPA on August 22nd, 2006 5:23 am

    You?re an accountant. Do the math. The CPA?s percentages are of a different population number, than the Clients? percentages.

    34% x 100 responses = 34 CPA?s who have clients 5-10 years.

    29% x 117 responses = 34 clients who have CPA?s 5-10 years.

    Maybe you?re NOT an accountant. Do the math anyway.

    You?re coming to the wrong conclusion for the wrong reasons. There is absolutely no mathematical reason why the %-ages should be the same, CPA?s vs. Clients.

    Marguerite I. Harkness, CPA
    .

  5. Michael L. Wiley, CPA on August 22nd, 2006 6:04 am

    I liked this article and I can certainly relate to it. I do have a perception that our CPAs think they are doing a great job, but I don?t necessarily feel that way.

    While I do believe they are qualified for what they do and the services they perform, they come off as being much more concerned about their standing in the engagement than ours. When they are here for the annual audit, they look mainly for overvaluation details, or overstatements of income, etc.

    I have never heard any suggestions on what we can do, or how we can report our income that would be to our benefit. They are now so gun shy about any perception that there may be negative issues in our reporting that they are really not our advocates at all. Yet? we pay their fees.

    Michael L. Wiley, CPA
    Controller
    The Creative Street Media Group
    Indianapolis, IN.
    .

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