AICPA CEO: Helping Businesses Recover Involves Taking Some Risks

Just as health care professionals work on the front lines of the COVID-19 pandemic, CPA firms are the financial first responders, helping their clients recover economically.

More than any other profession, accountants are best positioned to serve as trusted advisors to the 6 million small “Main Street” businesses battered by the economic downturn caused by the COVID-19 shutdowns, says AICPA CEO Barry Melancon.

Melancon, speaking May 20 at the virtual AICPA Spring Council meeting, says accountants will play a critical role in bringing back an economy that in April saw consumer confidence plummet by one of the largest one-month drops ever. GDP dropped 4.8% in the first quarter and more than 40 million are unemployed.

As passionate debates flare on the fairness, or unfairness, of reopening plans, Melancon says, “It’s our job as a profession to not be bogged down by that.” Focus on helping clients take some risks in developing new business models and avoid being “ultra-conservative.” He adds that accounting is a profession that “strives to get it right,” but it’s also a profession that “gravitates to the technical” and can become paralyzed by the details.

“Our real value and our real message going forward is that trusted advisor role,” he says. “I think we will see that the most valuable employees in firms, and the most valuable people in finance, are going to be the ones that can focus at that level.”

He adds, “How well we do that, I believe more than anything else, will drive how well we help the economy to recover.”

Melancon discussed the numerous ways accounting professionals can succeed in an uncertain economic environment. One way is by retaining staff, and he says that in his many discussions with firm leaders, he has seen a passion for maintaining the workforce, keeping commitments to hire in the fall and to continue internship programs, even if they’re virtual.

Keeping talented professionals will be key to helping small business clients, who are being hit disproportionately in this crisis, as are small CPA firms. The reverse was true in the 2008 recession, which heavily impacted large companies and large firms. Firms with diverse client bases will fare better than others, he says.

Business opportunities for firms include helping clients with Payroll Protection Program (PPP) forgiveness, tax deductibility of PPP spending, business valuations, forensics, tax planning, new state regulations and extended tax deadlines. Additionally, firms can consider business continuity (“not a traditional sweet spot”), business transformation, forecasting and scenario planning, supply chain management and workforce planning. Consulting skills will be at a premium.

The “new normal” will certainly be different and will offer opportunities. For example, Melancon says, members of Congress are talking about legislation requiring annual audit of or assurance over of emergency stockpiles.

“We are on the front lines – not just for the next day, not for the next month, but for a series of months into the next year – as to how this economy is going to recover. Never before have our skill sets been more needed, has our attitude been more appreciated and our outcomes more expected than they are today.” – Barry Melancon.