The Future of Client Relations in the Accounting Profession

Written By: Sam Savage

Published Date: July 25, 2008 Last Edited: July 25, 2008

By Mukamal, Barry

In the following article, the author discusses the challenges faced by CPA firms as generational differences among employees and technological changes have an impact on client service and relationships. Over the years, my partners and I have discussed at length the changing landscape of the accounting profession. Often these discussions centered upon what we perceived to be a shift in the manner in which clients are serviced and, therefore, a comparable shift in the work of the partners and professional staff who are charged with providing that service.

Recently, a college professor spoke at a firm-wide meeting regarding the generational issues that have challenged organized entities throughout the United States. Frankly, I was unaware that this issue had even achieved the status of academic recognition. It did not, however, take long to become fully engaged in this topic and recognize the importance of the message that the professor was attempting to deliver.

The professor’s theory was essentially this: Three different generations concurrently occupy the contemporary workplace (Baby Boomer, Generation X, and Millennial). Each generation possesses vastly different attitudes, mores, and priorities that affect both their work lives and their personal lives. The reasons for this landscape are many, but the lines of demarcation themselves are bright. Moreover, those individuals who were born on the cusp of the two generations are caught in a situation of some ambiguity, which in turn, may create a sort of identity crisis for them.

The professor attempted to explain and ultimately rationalize the behavior of each generation and those conflicts that are created by the tension of competing, and often conflicting, attitudes and priorities. He also suggested ways to bridge the differences.

Balancing personal priorities with client service

In the context of a professional or business environment, this effort seemed to me at first to be overwhelming and potentially unattainable. After all, as a Boomer myself, bred in the credo that client needs must be fulfilled when the client expects it (regardless of whether those expectations are reasonable), it was hard for me to accept the Millennials’ notion that client service can take a back seat to personal and family obligations. After much reflection, it became clear to me that the challenge facing our profession is to create an environment and a culture that accommodates both. Our firm is working very diligently to achieve this objective.

The influence of such generational analysis, however, is often exaggerated. Although one can hardly doubt that intergenerational differences affect how our profession operates, they do not fully explain the significant changes that I have witnessed over the years in the manner in which accounting professionals discharge their day- to-day duties to clients, the firm, and themselves. I do not believe that the pursuit of work-life balance or of nonwork personal goals adequately accounts for the radical changes that have characterized accountant-client relations and our approach to our work. Something more is happening here.

To properly examine this issue, one must first define it. I am old enough to remember the days when doctors made house calls, milk was delivered fresh each morning to the door, and accountants, by necessity, visited their clients on a scheduled, periodic basis. These were the norms of the day. In our contemporary technology- driven world, they seem quite bizarre and dated.

Changes in interaction

The demise of the first two examples was impelled by simple economics, but other factors drove the demise of the third example. The shift from personal onsite client service to office-based remote delivery has many root causes, but the desire of firms and clients to attack the escalating costs of providing professional accounting services is not one of them.

Our professional and personal relationships have been forged by constant contact and interaction, resulting in deeply rooted and long-lasting relationships. Accountants were the financial and strategic confidants of their clients, keenly aware of their clients’ deployment of family financial resources, their financial and strategic goals, and even their emotional needs and those of their families. Consequently, client loyalty remained consistently strong. It was unusual to see clients migrate from one firm to another, and polls consistently ranked accountants as their business clients’ most trusted professional.

Truly understanding clients

These bonds were not created spontaneously, nor did they arise solely from constant contact. Mutual respect between an accountant and the client was earned. It required an in-depth understanding of the client’s business operations, competitive situation, financial and administrative resources, strengths, weaknesses, vision for the future, legal environment, succession plans, and liquidity (just to name a few of the pertinent issues affecting the relationship). This required a commitment on the part of the accountant to achieve a delicate balance incorporating the twin goals of ultimate benefit to the client by way of providing superior service and advice, while at the same time affording a high degree of security and stability to the accountant’s practice. Thus, a truly symbiotic relationship has been traditionally sought.

Robotic relationships

Stepping into the twenty-first century, I observe a markedly changed landscape. Although many changes appear to be subtle, they are eventful and may even seem insidious. Gone are the days when we visit clients on a monthly basis to “write-up” their “books,” to talk about the events that may affect their businesses, to review the challenges and opportunities that are affecting their industry, or to learn what is transpiring in their personal lives. This approach has been replaced with an antiseptic and impersonal processing of financial information and data flowing through myriad different hands and sophisticated computer programs. We often simply compare the results that these programs spew out with those of our clients’ peers and with prior period results. If they fall within an acceptable range, all is right with the world.

Certainly, I am not averse to the many tools that technology has offered to our profession. These tools have enabled us to greatly expand our service offerings and to enhance the efficiency with which we deliver them, all while helping to contain costs. There is, however, a price to pay for over-reliance upon or chronic misuse of this technology, particularly if it comes at the expense of diluting the relationships we have developed with our clients and our ability to truly understand their needs.

When e-mails replace phone calls and face-to-face interaction; when third-party bookkeepers, many of whom are located outside of the country, process routine financial transactions, but fail to perform necessary fundamental analysis; when “blast” mass mailings or e-mail becomes the preferred method to effectuate planning or to advise clients of changes that may affect them, we must pause and re- evaluate our business model.

Counselors or commodities?

From my vantage point, I routinely observe professionals who have grown up in, and who have become accustomed to, an environment in which it is acceptable and perhaps even encouraged to conduct their practices in this oddly detached manner. The growing trend towards industry and practice-area specialization validates this observation.

Sometimes, little thought is given to passing off a client’s situation to another professional, who might be better suited to deal with a specific immediate need, but cannot possibly be familiar with the full range of that client’s needs or have the personal ties to that client that underlie the type and quality of service to which our profession so uniquely aspires. This trend towards substituting people in a manner comparable to substituting fungible technological tools, if not managed properly, will lead inevitably to the erosion and even dissolution of the bonds between us and our clients. Left unchecked, it will turn us into commodities, rather than ensure our place as valued counselors and advisors.

When I visit Disney World with my family, I make a point of touring the Carousel of Progress. Although I never question the benefits brought by the advances of each decade, I do reflect on the values and visions of the past, particularly those that have stood the test of time. The future of our profession depends on our staying faithful to the fundamental principles and methods of practice that have sustained its development and its reputation. These principles and practice methods must be bolstered, but not supplanted, by the tools and appliances that can make us more effective if handled properly-or obsolete if they are not.

By Barry Mukamal, CPA, PFS, ABV, CFE

Barry Mukamei, CPA, PFS, ABV, CFE, is a partner with Rachlin Coben & Hoitz, which has offices in southern and central Florida.

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