In May 2016, we were honored to participate in the D-CEO Magazine Accounting Roundtable. Our newest partner, Mike Rizkal, CPA sat down with other leaders from accounting firms in the Dallas area to discuss the current state of business accounting, economic variables, and the various trends that affect our clients.
To read the full article on DCEO’s website, click here.
How is the location of a CPA firm office relevant to the decision to work with them?
Location is still a big factor, but no longer a deal breaker. Due to advancements in technology, we can now serve more clients that aren’t geographically located in our backyard while still maintaining the efficiency and personal touch of a face-to-face meeting. The advancements in online collaboration and meeting tools have changed our industry significantly and will continue to play an important role in how we service our clients. We invest in technology that matches our clients’ desire for convenience, and then we address their preferences for communication to deliver the best service possible. For traditional tax and audit compliance, those services are built around collaboration and often work best with a local CPA. However, a firm that has the capability to work remotely through cloud-based technologies can bridge the gap of geographical distance.
Is bigger better? How does the size of firm impact clients?
In our experience, going with a bigger firm doesn’t always guarantee better services or solutions. It is all about balance. Certainly for some larger entities and public companies a “name” firm carries weight with investors. However, in the middle market segment in which we serve, service is paramount and our competitive fees create more flexibility for ownership. Clients should focus on finding a firm with a solid reputation within the financial community that directly impacts them. When searching for an accounting firm, companies should consider: direct and easy access to partners, the capabilities of the firm to help solve their problems or provide referrals to other trusted service providers. The most common reason for change to a new CPA firm is that the client felt “lost in the shuffle.” Therefore, it is important to find a firm that can deliver on the level of service offered during the proposal process. Don’t buy based on size alone.
Do your clients rely on their CPA firm to make recommendations of trusted advisors in other service areas?
We spend a lot of time making sure we have strong alliances so we can refer clients to someone we trust. If we are not confident in the level of service they will provide, we do not refer them. The key to a successful recommendation is to know the needs of your client first, then match them with a specific service provider with experience that meets those needs at a value-based cost. Matching the personality of the client with the potential service provider is also an important factor in the referral selection. We go beyond simply providing a recommendation. It is our hope to provide a referral that leads to a successful relationship.
We spend a significant amount of time in the business community developing relationships that we believe can benefit our clients. Even after the referral, our team stays involved to ensure our client has a positive experience and the desired results are achieved.
How are your clients balancing the importance of providing strong earnings for banking needs versus reducing the amount of taxes paid?
All clients are looking for opportunities to reduce the tax burden while continuing to produce strong financial results that attract capital. We have found the answer to this question to be a combination of strategic tax and financial planning. This is often achieved through balance and communication.
There are several strategic tax planning opportunities that do not negatively impact the company’s earnings or common financial measurements. Banks are not purely concerned with earnings, but instead focus on the overall stability and financial health of the company.
We feel that it is important to help our clients through strategic planning to reduce the tax burden while maintaining strong financial performance. Then we work with our clients to communicate these strategies to their financial institution. We have often found that communication helps manage surprises and keeps our clients and their lenders on the same page regarding specific tax planning strategies and expected earnings.
How do tax laws and incentives in Texas benefit your clients?
Texas undoubtedly is one of the most business friendly states in the nation and has one of the lowest tax burdens in the country. Clearly, based on current economic performance of the state, Texas has done a good job incentivizing companies to do business in the Lone Star state. Unlike many other states, Texas does not impose a personal income tax or a corporate income tax. Texas’ margins tax was established to provide a broader, fairer tax assessed at a lower rate. There are numerous other tax incentives and laws that make Texas a business friendly state, including property tax incentives, sales and use tax exemptions for manufacturing, research and development and business relocation deductions, just to name a few. We look at every advantage and weigh it against the goals and financial results of every client before recommending a solution.
What unique marketing programs have you implemented to grow your business?
We are being very segment focused and promoting thought leaders in the industries we serve. We are increasing our web presence to encourage online leads, because a lead indicator among growing firms is website visits. We haven’t prioritized our website in the past, and I think the industry in general has underestimated buyer behaviors toward online search and comparison shopping.
We are promoting technologies that reduce client fees and improve operational efficiencies. Especially in services where we are experts, we are looking at solutions that make us attractive to clients for outsourcing such as payroll services.
What are obstacles that impede the growth of your clients’ businesses?
The biggest obstacles to growth are often corporate governance and finding and attracting talent. There are many issues that affect our clients’ businesses. Few owners can solve them all on their own. Many business owners are top-line focused and struggle to address the other challenges affecting the company primarily due to lack of time. Business owners need to invest inside the company as much as focus on new business development in order to remain competitive on all fronts. Keeping talent, investing in the right technologies and managing a diverse and mobile workforce are the biggest challenges to growth.
What is the best formula for creating a valuable and successful relationship between you and your client?
The key to creating a valuable and successful relationship is proactive involvement and communication. We strive to be actively involved in our clients’ businesses through tax planning and regular interaction throughout the year. Every client wants to feel attended to on a professional and personal level. We have leveraged internal resources, technology and our team to ensure follow-up with clients so they are well informed during every stage of the engagement. Our focus as professionals, then, is to exceed expectations with our attention and value-added services.
How should companies evaluate the effectiveness of their accounting firm?
Companies can evaluate the effectiveness of their accounting firm by assessing whether they feel the firm goes above and beyond to meet their expectations.
- Is the team simply completing the task they’ve been assigned or are they spending time proactively planning for the engagement to ensure the best client results in the most efficient manner?
- Is the accounting firm providing the right level and type of communication as to the status of the project and the expected delivery date?
Proactive service means showing clients what they want before they know they want it. Clients need to hold their accounting firm to a standard of meeting promises and expectations. A CPA must be engaged in the relationship to know what can make a difference.
As a trusted advisor, what are you doing differently today to provide additional value to your clients?
We are striving to be more than just a service provider. We want our clients to view us as a resource to help with their business challenges. We encourage communication by offering an unlimited phone calls and meetings retainer to every client. We want our clients to know that simply calling us to discuss a solution is not going to cost them. These conversations often uncover opportunities and needs and enhance our client relationships.
Our professional team brings value to the table from a background of various industries and experiences, which can often be translated into a unique solution for our clients’ needs.
How has the use of technology impacted how clients run their business — are they willing to make the investment in this economy?
The advancements in technology and increases in efficiency it creates are often too big to ignore. During the recent downturn of the economy, companies sought out opportunities to leverage technology to decrease overhead and increase profitability. Although there has been some economic improvement, companies continue to look for new ways to increase efficiency. This is often achieved by leveraging new technology. We focus on making technology recommendations that fit our clients’ needs and help our clients assess the cost/benefit of their technology investments. It can be as simple as setting up ACH bill payment through their bank or investing in an ERP system. We live in a technology-based world at a time of high competition and increased demand for efficiency. Our clients are willing to invest in solutions that reduce overhead costs, increase efficiencies and help them remain competitive in today’s economy.
What are the most important issues impacting your client base today?
There are numerous issues impacting our clients, including increased competition, pricing, talent retention, taxes, succession planning, changes in healthcare regulation, increased compliance complexity and demand for efficiency.
We take pride in helping our clients navigate these challenges by being proactively involved in their business. Clients need an advisor to help prioritize and weigh their decisions, provide insight based on experience in their industry, and assess the financial impact of these decisions. Our goal is to help our clients make the best decision they can to provide a solution they can be confident in.
How do you keep up to date on issues that impact your clients?
We attend trade shows and conferences within our industry and the industries in which our client operate. Spending time with our clients is how we get the first-hand information on issues and trends affecting their industry. We see it as part of our job to stay in contact and be experts in our clients’ segments. We want to give clients a head start on what’s coming — and it’s constantly changing.
Often the concerns of here and now outweigh what’s coming in the future. It’s natural. Attending these conferences helps our professionals stay aware of upcoming changes in the industry, which allows us to provide knowledge to our clients regarding the latest trends, and in turn this helps our clients succeed in today’s competitive market.
What keeps your clients up at night?
The issues that keep our clients up at night are numerous and often different based on the industry in which they operate and the lifecycle stage of their business. Companies are always balancing the long-term decisions to remain competitive with the short-term concerns about payoff. What’s the short-term reward for the long-term investment? It’s human nature to worry about that. Are we on the right track? Can we keep the key people we need to succeed? Not to mention the normal concerns all business owners face, such as meeting revenue targets, maintaining healthy cash flow, technology investment and managing increased regulation. During these times of increased complexity it is important to find a trusted advisor that can help navigate the ever-changing business environment.
Mike Rizkal, CPA has been with Cornwell Jackson for over ten years, and leads the firm’s benefit plan and financial statement audit practice. He specializes in providing a variety of services to privately-held middle market businesses, with a focus in the construction, real estate, manufacturing, distribution, professional services and technology industries.