Technology Enables Accountants to Do More for Clients
YOUNGSTOWN, Ohio -- Small-business owners’ adoption of Intuit QuickBooks and other accounting software has changed their relationship with the public accounting firms that serve them, a change for the better, says Harold Davis, owner of H.D. Davis CPA’s, Liberty Township.
He is joined in that belief by Paul Milligan, owner of Paul Milligan & Associates CPAs, Boardman, Gregory L. Gett and John Donchess, principals in Packer Thomas, Canfield, and James Rosa, principal in Hill, Barth & King LLC, Boardman.
As Gett, also president of Packer Thomas, notes, not spending time on routine bookkeeping allows his staff to devote that time “to higher-end services,” such as tax planning, succession planning and other consulting, for which the firm can charge a higher hourly rate.
“Those [accounting] programs are so user-friendly,” Donchess marvels.
“Our philosophy is to make them as user-friendly as possible,” Gett adds, “so they come to us for our higher-end services.”
There remain companies, basically very small enterprises, Milligan has found, that rely on his firm for their bookkeeping because the owners would rather devote their time to running and developing their businesses.
“I have a client who does auto-repair work,” Milligan says. “He has piles of paper on his desk. He’s purchased QuickBooks but not used them. It’s easier for him to have us keep his books.”
Many of his clients, he’s quick to add, do use QuickBooks and use Milligan staff to ensure everything’s in order.
“We keep tabs throughout the year. We’ll offer advice on coding properly,” the CPA says, “and so few adjustments have to be made.”
At H.D. Davis, Harold Davis also cites the increased ease of using QuickBooks. “With the QuickBooks technology,” he says, “you no longer have to do backups. Now I can correct your QuickBooks [in his office] and you don’t have to stop working.”
QuickBooks has relieved HBK of much of the bookkeeping services the firm used to provide, Rosa agrees.
“But bookkeeping was only a small part of our practice anyway. And clients still have a lot of questions [about QuickBooks] they ask us,” he relates. “So we provide consultation and a service, but it’s a different service.”
Little noticed outside the accounting and banking industries is the role of liaison CPAs play in arranging financing for their clients. Besides offering guidance in helping owners write business plans that set forth their cases for lines of credit or commercial real estate mortgages, CPAs stay abreast of the business sectors to which banks want to lend.
“The most common questions are related to bank financing,” Rosa says, are how to secure a loan, how much a bank will lend, and on what collateral.
Harold Davis left Yurchyk & Davis CPA’s with the intent of using his knowledge of accounting “to become a business coach versus a consultant.”
The irony is that his firm today is a traditional public accounting firm not unlike the one he left.
Not only that, H.D. Davis is growing. It just opened an office in Newberry in Geauga County and, with the advances in computer technology, the firm is seamlessly serving clients across the country, “in Houston and Oregon. I even have a couple of people in New York,” Davis relates.
His staff ranges from interns who attend Youngstown State University to two nonagenarians who still do everything on paper. One, Jean Zuzak, came with the new office in Newberry.
“She’s so well-respected,” Davis says, that she’ll continue to work as long as she’s capable. Zuzak puts in 40 hours a month as does Ethel Sherman, mother of an inactive CPA, Bruce Sherman. (Davis bought out Sherman’s practice).
Both women produce “work that looks like what I used to do in the late ’70s,” Davis says. Interns or junior staff enter the women’s work into computers.
The firm’s office in Newberry, which serves many in the nearby Amish community, is headed by Heather Davis (no relation to Harold).
The Amish are selective in how they employ electricity, Davis notes. (Light produced by batteries powered by a generator is OK. Computers powered via electric grids are not.) He admires their work ethic and entrepreneurial spirit and is accepting of them doing their bookkeeping by hand because they won’t use computers.
The American Institute of Certified Public Accountants warns of a shortage of CPAs because of the number of practitioners who could retire within the next decade, HBK’s Rosa relates, and an insufficient number of accounting majors in colleges to take their places. The accounting profession, more than any other, takes pains to provide internships and nurture college students interested in pursuing public accounting.
Davis, Milligan, Gett, Donchess and Rosa give accolades to the accounting program at Youngstown State University for the caliber of students it graduates although Milligan only rarely takes on an intern.
“We just hired three new YSU graduates,” Davis relates. “They’re the best, really terrific.”
“Finding the best [candidates] is a difficult chore,” Rosa says.
Firmwide, HBK will hire 33 interns, he reports, 12 locally. (HBK has offices in Ohio, Pennsylvania, Florida and New Jersey.)
“In the last 12 months, we hired 22 firmwide,” he says, “six in the Valley. Many come from Youngtown State.”
Hiring and investing in interns carries an expense, Rosa notes. “We have significant training programs internally. It’s crucial that we identify and hire the right people. It’s not just about them earning their degrees. It’s getting them certified.”
Packer Thomas’ Gett likes the interns who come from YSU and in 2014 will hire five. “Mainly, YSU has been fantastic,” he comments.
“We see a student three months [during tax season]. Some come back more than once. Some stay with us two years,” he adds.
Accounting firms appreciate the interns they take on, Gett continues. “They might be part-time but they’re paid well. If they work overtime, we pay time-and-half,” he says.
“We have an incentive to do this,” adds Donchess, who heads the Packer Thomas tax practice. “Most have a good work ethic and are hard workers. The last four or five years, these kids have been outstanding.”
If an intern does well, the accounting firm knows his work, will have a leg up in recruiting him and will want to further its investment in his training.
On the other hand, Donchess admits, despite the caliber of an intern’s work, “Some find this is the last thing they want to do. Which is all right. That’s what an internship is for. Better to find that out now.”
Public accounting firms bill by the hour and are likely to continue the practice, the CPAs agree.
“Our fees are based on the time we spend,” Milligan says. “We look at the [client] transactions to determine how much time we’re likely to need. We can tell them pretty much what our fee will be.”
When his firm takes on a new client, his staff closely monitors its needs the first 90 days, presents a bill and reviews with the client how it came to that fee.
“We can present a client with a fixed monthly fee,” Milligan says. He meets with the client at least once a year to review those fees.
HBK bills by the hour, Rosa says, except when it bids on a project.
“Then there’s the issue of value provided,” he adds. “If you call me with a question and I give you a five-minute response, should I bill you for just five minutes? From a value standpoint, I might have given you a $10,000 answer based on my 30 years of experience.”
As does Packer Thomas, HBK still bills by the hour but in tiers based on the experience of the staff who work on a project.
EDITOR'S NOTE: This story was first published in The Business Journal.
Copyright 2014, The Business Journal, Youngstown, Ohio.
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