Michael Platt: Future Brings Opportunity for CPA Firms – Along With Angst

The accounting profession is expected to undergo more change in the next 50 months than it has in the last 50 years – a prediction that is sparking anxiety among firm leaders, but also a recognition of vast opportunities, says IPA Publisher Michael Platt.

“They’ve been very, very successful getting to this point, but going forward it’s going to be a little bit of a different ball game – different business model, different services and different ways to serve their clients,” Platt said in an interview with Jody Padar, CEO of the New Vision CPA Group.

Platt appeared on “Let’s Get Radical,” hosted by Padar and David Knoch, president of 1st Global, which provides wealth management services to CPA firms. The interview was broadcast live on the Voice of America Business Network June 12 at the AICPA’s ENGAGE conference at the MGM Grand in Las Vegas.

Platt, in an interview that hit upon major issues affecting the profession, provided a glimpse of some of the trends emerging from IPA’s annual survey of more than 500 accounting firms.

He says profit margins are shrinking for two reasons – fee pressures, particularly for audit services, and rising staff costs, which are increasing by 6-7% per year. Billing rates are going up only 4% in the same time frame. “The accounting profession is one of the few professions that has a monopoly,” he says. “They’ve taken the monopoly, in this case the audit, and just driven the price of the audit into the ground.”

The most successful firms, which IPA recognizes every year as “Best of the Best” firms, are those that are changing the definition of a CPA firm and articulating the value of their knowledge to clients. Progressive firms are no longer selling products and services; they’re selling help and solutions for clients, Platt says. “Shifting from the expert who has all the right answers to the advisor who has all the right questions is a big hurdle for a lot of people to get over, but one that is quite achievable.”

View the entire interview.