The Innovators- Changing The Accounting Business Model

Reprinted with permission from Accounting Today.

The words “innovation” and “accounting” are rarely uttered in the same breath. Our profession is by nature conservative and slow to change. But over the past several years a movement of CPAs who see and do things differently has slowly been gaining steam.

After getting to know some of its pioneers I’ve concluded that we just may be on the cusp of a significant shift in our traditional accounting business model – the way we create, deliver and capture value.

In a series of articles in Accounting Today I will explore this shift through profiles of three practitioners of what I’m calling “the new accounting.” This introductory piece addresses the nature and characteristics of the movement and what it could mean for our firms and our clients.

The times, they are a changin’.

To get a full sensory exposure to the new accounting, click on thriveal.com. Pronounced “thrive all” (and this is important), the site is digital home base for a network of mostly young, change-minded CPAs. It is the creation of CPA Jason Blumer who narrates a fast-paced video on the site’s home page and is profiled later in this series.

Welcoming in an open shirt and hipster glasses, Jason describes Thriveal as a “creative CPA network.” We see images of young professionals passionately brainstorming, connecting, and generally looking like they’re having a blast.

In brief testimonials over throbbing, club-like music, network members talk about the value of collaboration. One admits to loving the profession again, after years of dissatisfaction in a traditional firm environment.

Presentations by, and conversations with Jason and others paint a picture of a new breed of CPAs. While the firms they’ve founded are distinct from one another, the group shares a number of characteristics. They:

• View themselves more as entrepreneurs and business consultants than as accounting practitioners.

• Use technology in every aspect of their practice, including removing geographic barriers to serve clients anywhere in the world.

• Tend to forgo formal work attire. While some critics interpret this as a lack of professionalism and reflective of diminished quality, the new accountants see it as a practical response to the fact that they more often Skype with a client than sit together.

• Are innovative in their approach to just about everything, including strategies for attracting clients and training and retaining employees,

• Embrace new business models and value-based pricing structures such as monthly retainers.

• Rely less on formal specialty training and more on their experiences and market knowledge.

• Have worked in traditional firms and have concluded, “I can do this better.”

• Are committed to finding out what their clients want and delivering it.

• Are collaborative and operate with an “abundance mentality,” confident that the pie is big enough for everyone.

• Do not hesitate to abandon traditional approaches if they believe these are not relevant or productive.

The jury is out.

Enduring change can only occur when conditions are right. I believe that’s exactly what we’re seeing today. Innovations in technology, strong competition and significant regulatory changes have created an ideal environment for a potential paradigm shift in our industry.

Many questions surround the new accounting movement. How strong is it? Can it add value to a traditional accounting practice? For example, the adherents generally do not perform audits. Can the approach be adopted within an audit environment in light of the fact that these firms generally do not perform audits? I’ll be seeking answers to these and other questions as I continue my reporting.

I will do this with an open mind and without judgment. As someone who spent 25 years in high tech, some of the aspects and optics of this movement bother me less than they bother others. Informality, for example, does not offend me.  I ponder other aspects, such as striking the balance between regulatory rigor and creative practice.

Watch these pages for my profiles of three creative, colorful, successful “new accountants.” With its focus on technology and entrepreneurship and strong appeal to those entering the profession, I believe this movement is here to stay.