|CFOs Hold Key to Corporate Decisions
They may be the real decision-makers in hiring and firing CPA firms.
July 9, 2009
When companies go looking for a new audit or accounting firm, who decides which to pick? If you ask a corporate CPA, you’ll get one answer. If you ask a CPA, you’ll probably get another. Want to wager on who’s right? We know where we’d put our money.
CPAs are apparently under the impression that company owners are the Dudes of Decision. In our study, “What Clients Really Want,” that’s what 80 percent of responding public accountants said.
Only seven percent thought the CPA in business or industry — a CFO, controller or internal auditor — makes the decision. Just five percent said it’s the CEO, and only two percent thought the board of directors decides. But when we asked corporate accountants who makes the decision, we got a whole ’nother point of view.
CFOs seem to think that they, the CFOs themselves, make the decision. One out of two (56%) of them think so. Only one-fourth (26%) said it’s the owner. An equal percent attributed decisions to the board of directors.
See the problem? An awful lot of perfectly professional CPAs are pitching to and trying to please the owners of companies, when apparently it’s the company’s number-crunchers who decide the fate of firms.
The data was surprising to some long-time observers of the profession when I showed them the early responses.
Dennis Howlett, a British-born ERP consultant now based in Spain, asked, “Isn’t it obvious that the CFO is someone on whose door the public accountant ought to be knocking in the first instance? Apparently not.”
And David Maister, the practice management consultant in Cambridge, Mass., commented, “It’s been my experience that everybody makes the mistake of thinking that THEIR project is so important to the client enterprise that it must be the client CEO who not only makes the buying decision, but wants to meet all the possible providers (i.e. them.) Even for a relatively small company, this becomes a ludicrous proposition once you start looking at how many different service providers are competing for the CEO’s attention.”
CPAs, consider, how this affects your business. Do your marketing efforts target the right person? Do they carry the information that person is looking for? Does your communication with the client reach the ears and eyes of the right person? Whom are you taking to lunch next week?
Granted, there’s a one-in-four chance that CPAs should be focusing their attention on the owners of companies, and certainly that’s almost always true in small companies. And though the CFO or controller is your key contact in half of companies, that’s only one out of two.The point is, the decision-maker isn’t always who you think it is.
And here’s something else CPAs might not be reading correctly: their own popularity with the client. Forty-three percent think “nearly every client” would recommend them to their close friends. Another 38 percent think “most of them” would make the same recommendation.Clients, however, seemed to have a markedly lower opinion of their auditors.
When we asked why clients switch firms, 79 percent said poor service. Price would negatively inspire 66 percent. Too little time with the firm’s top people would terminally annoy 38 percent, while bad chemistry could taint relations at 34 percent.
Differences over technical issues came up a lot. So did “auditor not proactive enough” and “friendship at another firm.” Some companies would change firms if they needed new or difference services.
A few offered answers we hadn’t thought of:
But the best advice we can think of is this: Know your client, not just your contact, but the whole company. Know who makes the decision. Know how the decision gets made. Then help them make that decision. The right decision.
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Copyright © 2009 CPA Trendlines/BSG LLC. All Rights Reserved. Used by Permission. First published by the AICPA.
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