Why a CPA is a Natural For Providing Management Consulting Services

 Why a CPA is a Natural For Providing Management Consulting Services


During my travels in the eastern half of the United States and Canada providing consulting services to small businesses, it never failed to surprise me when I heard repeatedly Managed IT Services Milwaukee  from clients that their expectations were for their public accountants to provide organizational performance improvement services to them as part of their ongoing relationship. But when questioning these small business owners as to whether basic analytical, planning and profit improvement activities were being provided by the CPAs, the answer was always a reluctant no. Having had an earlier career as a public accountant, I explained to the business owners that the consulting services had not been contracted for with the CPAs, and that the CPAs had primarily agreed to provide compliance services, including the preparation of the annual financial statements and entity income tax returns. I further explained that having obtained a Master of Science in Accountancy degree and having taught at several colleges, it was clear to me why their public accountants were not offering management consulting or organizational performance improvement services to their small businesses.

As you know, an accounting education is primarily focused on the recording, categorizing, summarizing and reporting of financial data in a manner that reflects the standards prescribed in Generally Accepted Accounting Principles, which are developed and published by the American Institute of Certified Public Accountants. This mission is no insignificant matter. Without public accountants available to report financial information in a standardized way, third-party users, including banks, vendors, and government agencies, would not be able to get a clear and unbiased view into a company’s financial performance and condition. So having been trained to report financial data, the public accountants have mostly focused on compliance services as their primary domain.

Training and Skills

However, as I have provided consulting services to clients over the past decade I have often reflected on why public accountants do not weave management consulting services into their service mix. It is clear that accountants have much of the training, analytical skills, and core competencies necessary to help businesses solve their performance problems and increase the profitability and value of their organizations.

The world of business today depends greatly upon data to measure performance and gain insight as to what types of products, processes and personnel provide value to their organizations. As a former accountant I know the trap that I and many other professionals can fall into. That is, accountants, as professionals and experts in the field of accounting and finance, often assume that their technical and problem-solving skills are possessed by many others. In other words, they often devalue their level of knowledge and expertise because it has become somewhat familiar and easy for them; therefore they believe others must possess these skills as well. This belief is obviously not true. Having worked alongside consultants who do not have sound financial backgrounds I can tell you that the lack of the kind of in-depth financial knowledge that CPA’s possess puts them in a league of their own in the consulting arena. The connection between a business’s performance on multiple levels in an organization and the resulting impact on the financial results is a relationship that is unambiguous to accounting professionals, but often unclear to non-financial professionals: it is more difficult for them to connect the dots.

Having this insight into how businesses work and how their performance is reflected objectively in financial data and reporting is a large prerequisite to becoming an effective management consultant. Another way of describing this condition would be to label it as financial literacy. I have often told clients that their financial statements, particularly when viewed over a multi-year span for trends, really tells a story about the company’s successes and failures, financial strength, and resilience to future unknown events and economic conditions. Having an individual who can teach a client not only how to read and interpret financial data, but also how management’s decisions and actions can affect the organization’s performance for the better, is an invaluable and essential resource.



Leave a Comment