Menu

CPAs Wanting to Do It Themselves

In its ongoing effort to stay on the forefront of developments in tax profession technology, CPA Magazine talks to Mark Strassman, president of Make My Day CPA. Strassman discusses CPAs’ current adoption of “do it yourself” practices and some crucial mistakes that must be avoided.

What are some recent developments with Make My Day CPA?

Strassman MarkMake My Day CPA has begun a very active growth and acquisition strategy. It is our goal to build an iconic brand for entrepreneurs, startups and micro-businesses. Of course we will take on clients of all sizes and needs, however, our expertise is in the unique needs of what we feel to be a very undeserved market, “the little guy.”

To reach that goal we are in talks with several Washington D.C. area firms who are of similar thought and would like to be a part of building a bigger name and network, to be a part of a new brand in public accounting. From there it is our intention to grow regionally and then nationally both through acquisition and organic office openings.

I also believe to combat the potential flight of the tax client, firms must start providing a great number of other services to fill in the gap. Wealth management has grown within firms. Other similar ancillary services such as benefit administration, human resource consulting type suites of services will help bring the CPA firm closer to one stop shopping for clients’ business as well as financial and tax advisory needs.

What is a current challenge in the tax profession?

Two major problems facing the profession at the moment and one on the horizon.

Currently, from a pure growth perspective, there is a great challenge within the smaller to mid-market client base. Many of these type clients, both corporate and individual are becoming heavily invested in the “do it yourself” (DIY) model. The advent of numerous software options available to these users is appealing in that it gives them the feeling of control and cost certainty and savings.

However, the DIY user creates a major problem: doing the job right. In many cases, even with highly efficient software at their disposal, many users are preparing workpapers and tax returns with a vast number of errors. They don’t fully understand the rules, but if the software accepts the input, the user assumes it’s good to file. Of course, the IRS sees things a little differently. Thus, many clients are finding themselves in trouble. So much for cost savings and control as they end up right back in their accountants’ office, in many cases, spending more time and money than had they brought it to their CPA in the first place. That’s not to say there isn’t a place for DIY, but the user must be capable and recognize their limitations.

Secondly, and this is an age-old problem: staffing. Finding a qualified staff that is committed to a career in public accounting, much less taxation, seems to get more difficult with every passing year. It takes great time, effort and commitment to find, hire and train staff to bring them up to the level of expertise that a firm expects of their staff, and certainly at a level the client expects. With it becoming more acceptable in today’s working world for staff to move on in shorter and shorter periods of time, a firm must evaluate the risk/reward of investing the time and money into in depth training.

As for future concerns, it seems like with every new administration we hear rumors of tax change and simplification of the tax code. While some change is good for accounting firms, much conversation is had over what major simplification might mean to the tax preparation and planning part of the industry. But we aren’t there yet.

What do you see as a solution to this challenge?

We have begun to encourage the use of DIY software for those clients that feel compelled to go that route. Solution to the DIY issue is not fighting the concept but supporting it through education and at times training of our client base. We stay close, offer encouragement and guidance and let them know we are there for them if they have questions or concerns. It is our belief that whether it is audit-related issues, or other more difficult tax issues that software simply doesn’t make self-explanatory, we let it be known we won’t turn them away. We have also built a unique billing plan for such clients.

As for staffing, we always keep a pipeline of potential new hires in process. Even when we do not have an opening, we are looking for the needle in the haystack, the talented individual that embraces a career in taxation. As for those where transition appears to be a forgone conclusion, you do your best to treat them extremely well to get them stay in the firm as long as you can, thus maximizing your ROI.

Where have you recently seen significant progress in the tax profession related to technology?

As I mentioned, the DIY options do offer some wonderful options for our clients. Not without challenges, but still, a positive change if used in the right situations.

As for the progress for the tax profession itself, I believe the ability for most financial software to integrate with each other has been a wonderful advance. From financial statements and workpapers to research to the firm’s CRM, many systems allow it all to tie together quite nicely. Add the cloud to the mix and for better or worse, you can be at “your desk” 24/7.

What is a mistake you see CPAs make?

Being slow to change. Surprisingly, the accounting practice is changing. Some change has to do with technology, some with changing needs of clients and staff. But the industry is aging and many of the old guard still make the rules. They still see it through a filter that was on target 20, 30, 40 years ago but not with today’s need for change and adaptation.

A related problem to the aging industry and firm leaders, is succession and transition planning. A large number, over 50% of non-national firms don not have a well thought out succession plan.

What do you suggest CPAs do to avoid this mistake?

If more firms had solid succession plans, ones that included younger staff, it would solve two major problems at once: staff, seeing how they are a part of the future of the firm would feel more engaged and may choose to stay with the firm longer, and the partners would expose themselves to more modern thought.

What do you see occuring in the future?

For us at Make MY Day CPA it is all about growth through embracing the change in the CPA firm industry. Embracing technology and the needs of the millennials, both as new clients and as staff to grow with.

As for the tax and CPA industry as a whole, I think it will have to go through a few pains that come with change. Against the norm, the larger firms seem to be adopting change at a more rapid pace than the smaller, seemingly more nimble firms. But as the need for change becomes more apparent to the smaller firms, I think they will adapt by bonding together in alliances and networks that support each other, and assist in the growth of the small to medium size firm.