These Firms are a-Changing

For nearly a quarter century I made the weekday commute from my leafy suburb to Manhattan. First a 45-minute ride on the railroad, followed by a lengthy subway ride. As a remote worker, let me tell you that daily grind is not one of the things I miss about my old office.

As anyone who has ever done an overlong apprenticeship as a commuter knows, each train and subway car is overrun with billboard advertising – whether it is for medical or dental practices, banks and financial institutions or even the state lottery.

Since I began my involvement with the accounting profession more than 16 years ago, I always paid special attention to the advertisements trumpeting both the regional and global CPA firms – from those on the cusp of cracking the Top 100 to the behemoths of the Big Four.

As an advertising and marketing reporter in a former life, old habits die hard as with any ad I pay close attention to the copy.

And do you know what word the copywriters almost never use in those ads for those firms?

Accounting.

Let me repeat that for emphasis.

Accounting.

Care to guess what they use instead?

Advisor.

Such as in “At XYZ, our advisory services meet the needs of the client”.

The nouns accounting, auditing and tax rarely appear.

Care to guess as to why?

It’s a subliminal harbinger of where the profession is headed.

Because over the past decade and somewhat under the radar, CPA firms have been engaged in an evolution of sorts, morphing from traditional “service firms” to “advisory firms.”

Estimates are that within a decade or perhaps sooner, accounting firms as we know them today will have veered from the plain vanilla and Type 1 audit and tax work to the higher ticket consulting work – part of an ongoing transition from the traditional annuity based model to a client service model as firms strive to differentiate themselves from their competitors.

In sort of a disturbing parallel a recent survey of 400 firms showed just 8 percent of them felt that the profession was “future ready” and a scant 10 percent viewed themselves as “innovative.”

That’s not encouraging when you consider the quantum change approaching with regard to the traditional roles of accounting firms and their readiness to meet the needs of a changing marketplace.

And if you still remain unconvinced, it’s often right in front of you in both black and white and color.