Name: Carl Peterson
Title: Vice President, Small Firm Interests
- Strong advocate for small firms and their concerns – I travel extensively to gather their views
- Managing partner and founder of small firm in Minneapolis
- Former chairman, Minnesota Society of CPAs
- Extended family in profession: my wife and daughter are in public practice, and another daughter is working as an accountant but isn’t a CPA yet. I have one sister-in-law who is a CPA in business and industry, and another in government. And my brother works as a CPA in the banking industry. So I have good sense of professional trends through my job and at home.
Keeping current with changes and complexity of tax laws and increased regulation remain top challenges for small- and medium-sized firms. How can the AICPA help small firms tackle succession planning and other important issues when they’re struggling just to keep up?
We have a number of resources and tools that can help. For members of the AICPA Private Companies Practice Section (PCPS), there is the Succession Planning Resource Center that offers guides and toolkits. We also just completed a succession planning survey that will be released soon that firms can use to benchmark their progress against other firms. The Center for Plain English Accounting is an affordable subscription service that offers technical updates, webcasts and other support. We also have a cybersecurity toolkit coming out that is designed to help CPAs be more proactive than reactive when it comes to best practices on deterrence.
Can you give us a couple of quick examples of small firms who are flipping the traditional business model and reinventing what ‘accounting firm’ means?
I know a firm in South Carolina with five or six CPAs that has gone totally to value billing and dropped time sheets. It’s a two-partner, father-son business and one of the things that’s impressive is that the father really jumped on the bandwagon with his son. We’re in this meeting talking about realization rates and he said, “I don’t know about that because we don’t do time sheets any more – all I know is I’m making a lot more money than I did before.” Another example is a smaller firm out of Maryland that’s very progressive – it’s run virtually, with staff people located in several states. They provide business process outsourcing and virtual CFO work with QuickBooks Online and their structure allows them to expand their geographic opportunities.
What are your top three objectives for the next 12 months or so?
- Raising global awareness for small and midsize firms. My own six-person firm has had clients with customers in Japan or sales operations throughout Europe. Leaders of small firms don’t think they have international exposure – well, I think they’ll find out soon that they do, because globalization is filtering down to clients. What a cool opportunity to be in this world.
- Succession planning. We’re seeing a lot of demographic drivers for succession decisions as Baby Boomers retire, so I expect to spend a lot of time discussing this issue with firms as I travel the country in the coming year.
- My final objective is to make sure PCPS continues to be proactive and provide the right resources for firms to be in position to take advantage of opportunities. We have a great set of toolkits called Firm inMotion that cover technology, leadership development, staff development, firm structure and other topics, but we’re always looking to add value. So my role is gathering intelligence from small firms about their needs and objectives.
You were a small firm practitioner yourself – if you were to start your firm all over again NOW, what would you do differently?
I’m a technology person, so the first thing I’d do is go totally virtual in operations. That way you can assemble a staff with no geographic limitations, so you really can focus on the best people for the job. We also know that firms that specialize have more value long-term. I have expertise in advising real-estate clients, so I’d probably stay on that path. But for staff members, I’d tell them to follow their passion. If someone was passionate about the wind turbine market for electricity – let’s develop that as a practice specialty. If you’re an advocate for business process outsourcing, let’s look into it.
CPAs and public practice are strong today. But I think we’re going to see even more opportunities as we make adjustments in firm practice to accommodate Millennials and other young people. I’m super optimistic about the profession. I was recently able to meet some attendees at the AICPA’s Leadership Academy, which is about building leadership and service in the next generation of CPAs. Let me tell you, there are so many passionate people in that group and they’re so excited about Big Data, analytics and other topics that are going to be great areas of opportunity for us. It’s inspiring.