In the past year (2018), have you noticed any trends in practice at your firm/organization? For example, changing workloads; challenges in recruitment, retention, training, promotion, exiting; the outsourcing of accounting services; shortages of staff; difficulty recruiting experienced professionals; tapping into retirees?
Bernard Ackerman: One of the big challenges for us this year was the new Tax Cuts and Jobs Act, because it did take a lot more time than just meeting with clients. We’ve actually done several seminars for our clients and for the general public. That has taken a lot of time for us that we won’t have going forward.
We had to do the projections for all our clients. And then this last quarter, we had more planning than we’ve ever done. This year, we’re helping them get into some transactional stuff, like conservation easements, that will reduce their income to allow them to take advantage of the new tax law.
Jason Ackerman: The tax law was passed so fast, and they still haven’t released all of the forms or regulations. There’s so much more that we don’t have the details on that is going to really hamper us in 2019, because we’re all going to have to learn new forms and a whole different IRS regime.
The other biggest thing for us is trying to stay on top of all this new technology and figure out what is worth looking into, what we need to implement, and where we need to wait. That’s our biggest struggle. In the next year, I believe there’s going to be a couple of new cloud-based tax products. That’s really what we’re keeping an eye on, because we want to get rid of our in-house server.
The last two years there’s been a ramp-up in accounting technology products. We’re behind all the other professions, and now we’re starting to catch up and trying to figure out which tools are going to last and which ones we can trust. You can’t wait five years to change things anymore. You have to be changing your technology all the time, and your team has to get used to the disruptions.
We really like to focus on client satisfaction. We touch base with our yearly tax clients only a few times a year—gathering the documents, getting the tax return, and then our interaction in between. We want to make sure that all those touch points are good experiences. None of the technology companies have really cared about those in the past, so we’ve always had an in-house way to make client service better. Now there’s finally technology coming out for that. There’s a couple other organizing solutions that are getting there, but I don’t think they’re quite there yet.
Another big trend this year was communicating with clients in a fast way. You’ve seen a lot of companies come out with easier ways to gather documents and ask clients questions. We’re just trying to figure out a modern way to get information from clients the way the client wants to interact, which is normally by e-mail or text on their phone or tablet. I don’t want to make it hard for the client to provide new information or sign their tax return.
It’s not going to eliminate staffing. But the key with staffing is that you have to become an advisor earlier, and you’re not doing as much compliance as when you first started out. Then it becomes a question of how to train your staff so they can give advice faster.
According to the 2018 Rosenberg Survey, the accounting profession is aging—how does this impact your practice? How have you seen it impact colleagues, other firms, or clients?
Jason Ackerman: I think our firm has done a good job at bringing in the younger generation. We’re kind of half young, half old now. The key is making sure that you always have a constant stream of young people coming in and you don’t give up on them too early. If you expect them to know something right away, without any training, then you’re going to be disappointed. When you go to college, they don’t train you to be a modern CPA.
None of the Big Four firms train you. It’s really sad. Young people end up working there for a couple years and leaving; they’ve just lost someone who, with the right training and culture, could have been a valuable team member. That’s the thing I see the most whenever I talk to other accounting firms: they say staffing’s the hardest thing, but that’s because they don’t really care about their staff. They don’t take the time to train them and give them the mentorship they need.
It’s hard in our firm, too. If you’re understaffed or you don’t staff right, it’s easy to just let it go by. There needs to be a focus for everyone. Partners should be spending a majority of their time mentoring—especially the highest-level partners. I think they should be spending 70%–80% of their time mentoring their team and 20% on new business. And most partners are definitely not doing that.
Bernard Ackerman: We’re trying hard. We’ve got a couple pretty good mentors of our own, as far as spending time with staff. Even with all this great technology, the workload is still the workload.
Jason Ackerman: You have to offer staff something they want. They don’t want to work in a CPA firm that’s stuck in 1972.
For example, we have someone who has to move in a couple of months. We already told her, “We want you to stay with us, just work remotely.” You don’t want to lose someone who’s good just because they move. It’s 2018. You should be able to do everything in accounting online and remotely.
Bernard Ackerman: What’s also been successful for us is our internship program. We start with high school students; we’re lucky because we’ve got several that have not only gone to high school, but to the local college. So we keep that person for six to seven years. And then we can pay them the same amount that the Big Four firms start folks off at in Charlotte, because they’re really equivalent to a three-year person. It’s a win-win.
Partners should be spending a majority of their time mentoring—especially the highest-level partners.
According to the 2018 Rosenberg Survey, the percentage of women partners continues to grow very slowly (especially at large firms), and continues to lag behind the percentage of staff. Anecdotally, what evidence have you seen of this (or that contradicts this)? What explains the challenges the profession faces in achieving greater gender parity?
Jason Ackerman: We’re actually mostly women here—maybe 80% women, 20% men—so I think we’re doing well in that respect. But I think diversity is more of a challenge. We have very few nonwhite CPAs, and I think that’s a problem across the profession. We’re trying to hire diversely. We just hired a young man that’s Syrian, for example, and we have a young African-American guy we’re trying to hire.
Bernard Ackerman: I could see how it might happen in the profession, because maybe people have this old conception of how many hours a partner should work, and there are probably a lot of wonderful women CPAs who say, “I don’t want to be a partner, I’ll just stay a manager controlling my own life.”
Jason Ackerman: Who would want to work at one of these big accounting firms, with their antiquated idea of what you need to do to get to the partner level?
Bernard Ackerman: I’d love to get a group of other CPAs and talk about the whole structure of our profession, because the partner method is antiquated. We need to be like corporations, with a president, a board of directors. Having partners is causing havoc in firms.
Jason Ackerman: You have to be changing your practice at a very fast pace now. As the economy turns down, if you haven’t set up your practice for the modern world, you’re going to be left behind. I think that’s coming pretty soon.
According to the Rosenberg Survey, revenue per partner and equity per partner are increasing. What do you think the reasons for that might be?
Jason Ackerman: The economy is booming. There are so many new businesses, especially in our area, right outside Charlotte, North Carolina. I think most of the country is booming.
Bernard Ackerman: I think firms like us, that have added other divisions, have found them much more profitable than their accounting side. That revenue is what’s increasing partner revenue.
Jason Ackerman: The CPA is set up the best for that, because we’re the number-one trusted advisor. If you have a wealth management side, you’re going to do pretty well.
Bernard Ackerman: We’re also getting better at value billing. We haven’t kept time for over three years in this firm. Accountants were never taught to look at the value of what we’re doing.
Could you talk about what you’ve seen in the past year (2018) in terms of new practice areas, new regulation, legislation headaches, and new emerging areas of growth?
Jason Ackerman: There’s going to be such a need for clients on the sales tax side—the Supreme Court decision in Wayfair is going to be huge for accountants. CFO outsourcing is booming too, especially for small businesses.
I think the biggest trend is just getting away from the model of doing a monthly compilation for a client and moving to giving them real-time data. It’s already happening.
What concerns do you have about the professional marketplace? Do you think there has been a dilution of the profession, or of the value of the CPA license?
Bernard Ackerman: Our profession needs to learn how to market like certified financial planners do. Our marketing is so bad, most people don’t even know what “CPA” stands for.
Jason Ackerman: The person off the street doesn’t understand how a CPA is different from a tax preparer or just an accountant or bookkeeper.
The other big problem is, there’s just not enough people becoming CPAs because the colleges are not pushing them to the CPA track. They have to go for five years, and often don’t want to pay for that.
Finally, I’m really tired of people blaming everything on millennials. It really frustrates me, because older generations thought the same thing about the baby boomers. And no one wants to work with someone who thinks that way, and they’re just going to go someplace else.
Bernard Ackerman: Being the older guy, I want this profession to really be the best of all the professions, and it’s going to take some work.