By the Numbers
Seven local accounting professionals crunch industry trends.
Accounting is vital to any business or to any person whose finances are complex, yet it doesn’t always get the recognition it deserves for the key role it plays. With that in mind, MBQ queried seven local accountants about trends in their industry.
Jud Cannon is a founding partner of Cannon Wright Blount, PLLC, which opened in 1997 and employs 33 accountants and a support staff of six. Cannon has practiced in Memphis since finishing college in 1983.
Doug Gordon started Gordon and Associates CPA, PC, 15 years ago and, by design, has kept it small. The two CPAs and three staff accountants work primarily with healthcare providers. Gordon began his career 35 years ago with Frazee Thomas Tate, a large local firm.
After finishing college in 1975, John Griesbeck followed his father and grandfather into the firm that today bears their name, Reynolds Bone & Griesbeck. With a lineage back to Shannon Reynolds & Bone, founded in Memphis in 1916, the firm now employs 50 people, 40 of them accounting professionals.
Mark McBryde began his practice with Whitehorn Tankersley in 1985. In 1999 he opened his sole proprietorship and today employs a support staff of three people.
Shelley and Dorothy Smith are married and are the namesakes for Smith and Smith Certified Public Accountants in Collierville. Each of them has more than 30 years of experience in accounting. In their firm, which they founded 18 years ago, they are the tax professionals, and they employ two support staff members.
Trey Watkins is a member of the firm his father, William “Bill” Watkins, started 40 years ago, Watkins Uiberal, PLLC. Trey joined the firm immediately after college, 17 years ago. He is among the firm’s 65 employees.
Here is what they had to say about:
The current state of the local accounting business:
All of them are optimistic about the state of the accounting business locally, calling it “healthy,” “active,” and “competitive.” Cannon adds that practitioners are dealing with changes in the overall business climate here. “In Memphis, accounting firms have a somewhat limited number of new prospects,” Cannon says. “There are a lot of good firms, and often they are growing by simply moving market share around, not by creating new market share. Complementing our firm’s organic growth with the acquisition of quality firms has been a highly successful strategy with benefits for everyone involved, especially our clients.”
Gordon says Memphis’ service-based economy has enjoyed fairly steady growth. “Firms have stayed busy, there is always a need for staff, and accountants are able to make an above average income.”
McBryde believes there’s plenty of work and plenty of local firms to do that work. Past president of the Memphis chapter of the Tennessee Society of CPAs, he says there are more than 1,500 practicing CPAs locally, and the Memphis TSCPA group is the second largest in the state, after Nashville.
Shelley Smith says the accounting business locally is generally good, and current growth is strong. Though he has seen a plateau in the number of his firm’s business clients, he has also seen an increase in the number of its individual clients, an increase he attributes partly to the growth of Collierville. “That increase may also stem from the increasing complexity of the tax laws,” Dorothy Smith says. “People who formerly handled their own taxes are now turning to professionals.”
Watkins believes more opportunities exist for accountants now than in the past. “Clients sought accountants’ advice to help them survive the recession, and that actually benefited the practice,” Watkins says. He adds that Watkins Uiberall’s client base tends to mirror the Memphis business community — individual clients, small or family-owned businesses, nonprofits, healthcare, government, construction, and banking. Though there are still many local firms, Watkins has also seen a good bit of consolidation, so that firms that were formerly local now have a regional presence.
Changes in accounting through the years:
Each person interviewed cited technological advancement as the biggest industry change, and a close second the increased regulatory complexity faced by business owners.
Cannon remembers that, as late as 1983, accountants were still using traditional tools of the trade. Today, software helps accountants compute taxes, conduct audits, and run spreadsheets, so they can work more quickly and efficiently. The Internet has aided research, putting information literally at a person’s fingertips. “We have no paper files,” Cannon says, “and our employees may have as many as four computer screens on their desks to process the information they are working with. The concepts that underlie modern accounting date back 600 years, but how those concepts are put into action has changed dramatically.
Gordon says, “Technology lets me be more responsive, productive, and mobile.” He also points out that regulations, some self-imposed by the industry and some mandated by federal and state governments, requires Gordon and his colleagues to account for how they do their work. However, government-driven change, much of it at the state level, has also made life easier for accountants. “Today, there are not as many restrictions on advertising or on soliciting business, and it is easier for firms to practice across state lines. That also makes it easier for an accountant to move from state to state and still practice his or her craft.”
Griesbeck has observed changes in the services offered and the competition. Early in his career, there was a broader approach to the work accountants did; today there are various niche areas, such as offering technology consulting to financial institution clients and an examination of their IT systems to assess their security and operating efficiency. In the past, Griesbeck says, there were the traditional “Big 8” national accounting firms surrounded by smaller firms across the country. “Today, there are the ‘Big 4’ national firms, but thousands of small and sole proprietors,” he says.
McBryde says that in the “pre-PC world” some business might be farmed out to specialists to prepare the figures for the accountants to work with. Now, software streamlines the work processes. “The Internet has made it much easier for us to do research,” McBryde says. “Instead of having to study large printed and bound books, we can find up-to-the minute information online in just minutes.”
Shelley and Dorothy Smith point to the continual onslaught of government regulations. “A byproduct of the laws’ growth in complexity,” Dorothy Smith says, “is the increase in spe cialized areas within accounting. This has created more opportunities for people wanting to come into the field.”
Watkins has noticed the gradual specialization by industry. “We have invested heavily in our staff’s education to ensure that specialized knowledge is available to serve a variety of clients,” Watkins says. He also perceives an aging of the accounting business, with many sole proprietors nearing the end of their active practice. “Unless they have arranged for the continuation of their businesses, they will likely refer their clients to other firms with whom they have a professional relationship, or advise their clients of their decision to retire, leaving the clients free to choose another accountant.”
Advice to those considering an accounting career:
Everyone advocates accounting as a career, but most also mention the need to master a non-accounting concept: communication. “Accountants have to speak the language of business,” Cannon says, but they must also communicate well in general. One of an accountant’s best attributes is the ability to make difficult concepts understandable. If clients don’t understand what you are saying, they will find someone else whom they do understand.”
He also encourages would-be practitioners to study the liberal arts to gain broad-based knowledge. “That will make it easier to interact with clients,” he says. “Any accountant, especially someone who aspires to own a firm, needs such knowledge.”
Gordon recommends that future accountants give thought to their personal likes and dislikes, that they get as much experience as quickly as possible, and that they realize they cannot be all things to all people. “There will always be a need for accountants,” he adds.
Griesbeck advises college students who are majoring in accounting, “Pursue internships as soon as possible,” he says. “In addition, learn how to communicate effectively and how to think critically, skills that are invaluable in any career.” He also advises students to sit for the CPA exam as soon as possible, because the exam tests for knowledge that is very closely related to what they have learned in school.
McBryde says, “Accounting is a good college degree, because it is marketable, it teaches skills that are useful throughout a person’s life, and having a knowledge of accounting is very good background even if a person goes into some other area of business.”
Shelley Smith advises accounting students to “make the highest grades possible in accounting courses and in related business courses, because those grades will catch the attention of future employers.” Dorothy Smith’s advice to students is to develop good rapport with professors. “They can be helpful with getting internships and with networking for full-time jobs,” she says. She also recommends that students stay informed about current topics in the accounting field and become active in the industry and community.
Watkins says, “Accounting uses a unique skill set, but one that is required by every entity that exists. Compensation is another plus: The accounting industry has always paid relatively well and will continue to do so.”
He, too, advises developing interpersonal skills. “Client interaction is as important as the financial advice we dispense. Our profession thrives on trust. We often ask our clients, ‘What do you worry about the most?’ We must truly listen to our clients. That lets us gather the information we need to offer them value beyond just running numbers and calculating taxes.”