Somewhere along the line, the traditional bean counter turned into a “financial services” expert.
There have been a lot of changes in the accounting industry lately, most notably the addition of new services to the bookkeeping and tax preparation that had been every CPA’s bread and butter.
“I would imagine that a lot of it is a need to leverage basic accounting services into, we’ll say, higher mark-up services that are more profitable to deliver,” explains Tim Fogarty, chairman of the accounting department at Case Western Reserve University’s Weatherhead School of Management. “The large Big Five firms have been very successful at using base-level accounting and tax services as a kind of foot in the door.”
As technology shrinks the profitability of older CPA services, new ones are being born every day. However, figuring out what your company needs in a financial services firm can be intimidating in the face of so much change.
If you’re new to financial service companies or you haven’t had to choose a new firm lately, here are a few points to consider when shopping your company’s business around.
Mergers in the financial services industry are here to stay. In fact, some experts predict that within 10 years, 60 percent of the CPAs practicing today will work for a public company. That means a lot of smaller firms are still to be swallowed up.
So, if you’re more interested in dealing with a small firm than a large player, figure out whether it has a plan to hold its ground in the face of such rapid change. If not, it may end up on someone’s acquisition list.
It’s very likely your CPA will want to keep track not only of your finances, but your investments as well. Regulatory changes allowing CPAs to accept fees and commissions opened a new revenue stream for the industry and have fueled the trend of accountants reinventing themselves as investment advisers.
It’s a reality of the modern American economy. People do not want to visit more than one store. That’s how the Wal-Mart and Home Depot chains got so popular so quickly.
The accounting industry is no different. A modern financial services firm will likely offer a host of services ranging from payroll processing to consulting services. Before hiring a firm, determine the specialty services you need. More than likely, you’ll find somebody that offers them.
An Accounting Today study found litigation support, business valuations, heath care consulting and technology consulting topped the list of services provided by today’s financial services firms. How to reach:Case Western Reserve University Weatherhead School of Management, (216) 368-2030
Jim Vickers ([email protected]) is an associate editor at SBN.