This is the first deep dive in a series of three focused on how to transform your staff into trusted business advisors. For a background on why this is so critical to the long-term success of your practice, read our intro to the series here.
Learning and development is a topic I am very passionate about. During my time in public practice, I regularly taught L&D courses, was a lead mentor for the UFE program, and marked the SOA and the UFE. In my opinion, part of the value propositions of working at a public accounting firm is the opportunity to learn so much early in your career. You see how many different businesses work, you have direct access to senior team members and client contacts that you can learn both technical and soft skills from, and you learn how to manage multiple priorities real quick.
To that end, to be able to effectively deliver on the trusted business advisor, you need client-facing team members at all levels to understand how the business operates, and know what triggers or cues to listen for, or questions to ask, that can unearth opportunities. Having a once/twice a year meeting with the partner on the engagement is valuable, but to make the most of it, the ground-level insights need to bubble up to them.
Presumably, firms are hiring smart team members, but the educational requirements to qualify for a CPA are not easy. Most firms also are pyramid models, where there are way more junior staff than partners. So the key to delivering on this trusted business advisor model is empowering and activating the junior team members in the field to know how to do this.
I’m going to nerd out for a minute here, but one of my favorite ways of learning about how businesses actually run (and not just whether they keep copies of their invoices well organized for easy vouching) was through a now rarely used audit step called substantive analytics.
Substantive analytics looked at the correlation between various accounts or pieces of financial data to see if the balances made sense. For example, did the cost of sales move proportionately with revenue or was there an efficiency/inefficiency this year, and if so why, and how can we validate that?
Understandably from an audit quality perspective, this is not enough to get reasonable assurance. But, having this overarching view was important to see if ‘the big picture’ made sense. Also, the true insight into the operations of the business that came out of those conversations were invaluable, both for the engagement team’s ability to have meaningful, value-added conversations with the client, but also for our own learning and development.
Most firms focus on developing new training curriculum over the summer months in preparation for roll-outs in the fall when everyone is back from vacation but before another busy season. While the first focus of course needs to be on compliance and regulatory updates, spending time on developing staff’s business acumen and interpersonal skills is part of the holistic training needs.
On the technical side, incorporating financial health analysis into the training curriculum for senior staff accountants and managers is important for them to move from being procedural-focused executors to partner-track-worthy advisors. Having exercises and case studies on dissecting a client’s financial statements is an engaging and easy way of training this. On the intangibles side, role-playing client conversations and teaching structures to follow in these conversations (such as following the PASTOR framework for these conversations) will help elevate the staff’s ability to add value for clients and generate upsell opportunities.
Having a way for staff members to easily see the top-level financial statements and connect the tactical observations and client commentary is fundamental to developing quality CPAs. Taking the knowledge from performing all the audit or tax work and turning it into insights is tricky and time-consuming. The key is to have a way to efficiently deliver these to the practitioner for their consideration, review, and commentary. This will lead to answering the question of “when should this be done” when we dissect processes, and “how should this be done” when we dive into leveraging technology.
Author: Dave Bunce CPA, CA