An AICPA Small Firm Champion

A former practitioner aims to give small firms a front-row seat at every table at the Institute.
BY ANITA DENNIS

fter finding out how small firm members define success , I want to learn how the AICPA can help them achieve it,” James C. Metzler, CPA, said in August 2003 when he became the AICPA’s first vice-president of small firm interests. In the months since then, Metzler has used his entrepreneurial preneurial experience to devise a strategy for creating AICPA programs and services tailored to this constituency’s needs.

A FOUR-PRONGED APPROACH
Listen to and learn from members. Metzler plans to get as much information as possible from small firm practitioners—whom he thinks of as his “customers”—before he tries to address their concerns. To that end he set out on a still-in-progress “listening tour” two days after taking on his new job. Metzler says the tour will continue indefinitely. “By visiting members where they live and practice,” he says, “we at the AICPA are able to stay in close touch with their needs and wishes.” His itinerary includes visits to retreats, chapter meetings, state society forums and conferences to get a sense of what will enhance success for small firm members and how they believe the Institute can help them meet their needs. He has been to two to three cities a week since he started on August 1, 2003.

Although he set out with an open mind, Metzler anticipated that marketing and sales would be critical issues for smaller firms. “In a small practice, you not only have to sell and perform engagements, but you also have to continue bringing in new clients,” he says. “And because of their size and the demands on their time, small firms are very vulnerable when they lose clients.” At the same time, as clients’ businesses grow and become more sophisticated, their CPA firms have to keep pace, which adds challenges. “Losing clients can devastate small firms. So I want to find ways to help them prevent that and deal with it if it happens,” he says.

Metzler notes that when firms don’t have all the resources they need to serve a growing client, one good solution is to team up with another practice that offers different skills and expertise. As a result, two or more small firms can offer one client the full-service options normally available only from a large firm. “I am seeing a rapidly growing trend in which smaller firms ally with other CPA firms to jointly serve clients,” he says. “This enables them to stay with clients who seek a wider array of services as their businesses grow. Clients like it because they can retain the longtime trusted adviser who helped them through their early years.”

Metzler suggests that the AICPA could find a way to facilitate this process, becoming a matchmaker of sorts for partnerships between firms. “I hope to create resources, tools and guidance that will help CPA firms develop and succeed through key alliances with other firms,” he says.

Work within the Institute to guarantee it understands and addresses small firm members’ needs. “I want small firms to have a front-row seat at every table at the Institute,” Metzler says. In addition, he is investigating communications options to ensure members are aware of Institute resources already available to them, such as Partnering for CPA Practice Success—the AICPA Alliance for CPA Firms—and other member sections.

Track political and legislative developments that could affect small firm members and coordinate ways to address them with the AICPA’s Washington, D.C., office. For example, Metzler plans to forge new relationships with government agencies in Washington—such as the Small Business Administration—that have an enormous impact on small businesses.

Get feedback from the businesses small firms serve. “To deliver value our members first must understand what that word means to their clients,” he says. Metzler will be arranging forums with business owners around the country to better understand what real value from their CPA firm means to them.

Based on his own experience, Metzler believes small firm clients are seeking assurance that their CPA provides accurate and reliable financial information and that they’re taking advantage of all suitable, legitimate tax strategies. And, he says, each client wants a trusted adviser, business partner, confidant, quarterback and mentor. In his view these clients most often will turn to their CPAs as the trusted adviser to play those roles in situations such as these:

When making complex financing decisions, such as when a business is sorting through financing arrangements and securing crucial relationships with banks.

In a crisis—whether it be financial troubles, the unexpected death or loss of a key member of the organization, cash-flow problems or dealing with complex regulations.

During an expansion, to help consider financing or tax incentives and issues related to buying or merging with a company.

When facing succession-planning issues, such as preparing the next generation of owners, estate planning, making insurance decisions and constructing a will that considers family equity concerns.

To address wealth-building concerns and keeping the business, its assets and its ownership in the family. And on the sale of the business, to help with issues such as creating an exit strategy and getting a proper valuation.

When seeking to improve internal reporting so that critical business decisions will have positive results.

To tackle product-costing issues to improve sales prices and quoting.

For help with business processes and taking advantage of technology improvements.

SMALL FIRM BACKGROUND
Metzler got his start at a firm that is now known as Gaines, Metzler, Kriner and Co. in Buffalo, New York, where he worked with closely held family businesses on tax, accounting and financing issues. There were 5 people in the firm when Metzler started there in 1970, and 45 when he left the firm two years ago, along with another 25 in its technology subsidiary.

Metzler’s clients were mainly in manufacturing and distribution. They ranged from businesses in their second and third generation of family ownership to start-ups. While his largest client was a manufacturer with about $85 million in annual sales, the majority had sales of $1 million to $10 million.

In addition to providing clients with a variety of traditional services, Metzler also had a keen interest in marketing and sales and aimed to help them in these areas. He had grown up helping out at his father’s Western Auto Store franchise, where he repaired cars and sold auto parts. “I learned how to ask the right questions so I could identify people’s needs,” he remembers, and he later used that skill in his accounting practice.

As Metzler recalls, customers came to the store for two reasons. The first was that they had a problem with their car and didn’t know what to do about it. “So my dad taught me how to ask questions that would reveal the real problem and enable me to sell them the correct parts. He didn’t look kindly on me if a customer had to return a part because it was the wrong one. Thus, I became pretty good at asking the right questions and listening well.”

This experience provided an excellent foundation for Metzler’s accounting career. “It was natural for me to listen carefully to clients and inquire about their businesses to determine what it would take to resolve their problems. This background helped me immensely when I wanted to close deals with prospective clients or gain new engagements from existing ones.”

The second reason customers came to the family’s auto store was to improve their car’s efficiency—for example, by getting better gas mileage. Metzler says his father was committed to helping customers enhance their cars’ performance, so it was natural to adapt this approach to his accounting career. “I always was enthusiastic about improving a client’s business or financial position on an ongoing basis. Both my auto-parts customers and my accounting practice clients perceived me as delivering great value when I helped them improve their cars or their businesses in ways they hadn’t thought of.”

At the age of 28, Metzler became a partner in the CPA firm and throughout his career there he took on many leadership roles in areas such as marketing, information technology and community involvement. After 32 years with the firm, he left to cofound ConvergenceCoaching LLC—a CPA firm coaching practice in which he worked until joining the Institute. Metzler also has a long history of volunteering within the profession. He has served on many AICPA committees, is a past president of the Buffalo chapter of the New York State Society and has spoken in public forums on technology and practice management issues. Many practitioners know him because he spent more than 10 years speaking at conferences throughout the country on practice management and niche development issues. In addition, he is the author of the book How to Build a Million Dollar Technology Consulting Practice, has participated in AICPA video courses and is often quoted in professional publications.

THE IMPACT OF SARBANES-OXLEY
Although accounting reform has caused tremendous changes in the corporate environment, in Metzler’s opinion, small clients at least are not terribly concerned about how they will operate in the wake of the Sarbanes-Oxley Act of 2002. “In terms of regulation,” he says, “they’re far more worried about issues such as Occupational Safety and Health Administration regulations, labor laws, environmental issues, liability insurance rates and coverage, foreign competition, health insurance rates, unions, customer pressure for lower prices and the negative effect these forces have on the bottom line.”

Small CPA firms may face a very real challenge after Sarbanes-Oxley because of the fee resistance from small business clients who will have to comply with potential regulations and disclosures they don’t perceive as legitimately applicable to them, Metzler says. “In these cases small firm practitioners fear they will have to absorb all the additional costs of compliance clients are unwilling to pay for.”

But there’s good news, too. “There are many opportunities for small firms to perform myriad nonaudit services for public companies—especially the smaller public companies in cities throughout America—after Sarbanes-Oxley,” he says. These services include outsourced accounting and bookkeeping, due diligence, valuations, forecasts, internal auditing, advice on complying with section 404 on internal controls, providing audit committee guidance and membership, and technology and other special projects.

In addition, there are initiatives under way at the AICPA that address ongoing issues, Metzler notes. The Institute’s task force for differential accounting standards has opened the debate on the appropriateness of private company accounting standards. At the same time, the auditing standards board has been restructured to better reflect the needs of the private business sector.
Encouraging Feedback
Metzler urges members to send him their questions and concerns. He can be contacted by phone at 212-596-6039 or via e-mail at jmetzler@aicpa.org . Members can write him at the AICPA, Harborside Financial Center, 201 Plaza Three, Jersey City, NJ 07311-3881.

A GOOD TIME FOR SMALL FIRMS
Metzler is very enthusiastic about the prospects for these members. “There has never been a better time for small CPA firms,” he says, adding that small practices can work with larger accounting firms to perform some of the nonaudit services mentioned above.

In the end Metzler believes the bond between small firms and their clients will be of paramount importance. “The enormous strength of the relationship between a small firm practitioner and his or her small business clients is second to none,” he says. “Today there’s a renewed focus on the importance of small, family and privately held businesses throughout the profession and across America.” For example, he notes that IBM has refocused its efforts on the small and medium business markets. “These types of clients are the heart and soul of smaller firms.”

ANITA DENNIS is a journalist who specializes in business topics and is a former JofA managing editor.


RESOURCE S
Web site
Information about Partnering for CPA Practice Success—the AICPA Alliance for CPA Firms—is available at www.pcps.org .

Conference
2004 Practitioners Symposium
Las Vegas
June 14-16, 2004

CPE
Successful Selling Strategies for CPA Firms, a video course (VHS, # 181191JA; DVD, # 181190JA).

Publications
Accountant’s Business Manual (loose-leaf, two volumes, # 029418JA).

AICPA Audit and Accounting Manual (loose-leaf subscription, # AAM-XXJA; paperback, # 005143JA).

Audit Risk Alerts. These publications provide “how-to” advice for handling almost every type of financial statements. They help CPAs identify for specific industries the significant business risks that could result in material misstatements.

Checklists and Illustrative Financial Statements. This series is for CPAs who are auditing financial statements or preparing them for companies operating in specific industries. The checklists help practitioners make sure they are accurately and effectively obtaining or reviewing the appropriate materials.

Consulting Services Practice Aids. These publications help CPAs apply their knowledge of organizational functions and technical disciplines in the course of providing consulting services—for example, business valuation and litigation services.

Management of an Accounting Practice Handbook (# 090407JA; online version, e-MAP , # MAP-XXJA).

For more information about any of these resources or to place an order or to register, go to www.cpa2biz.com or call the Institute at 888-777-7077.

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