8 Fast-Growing Service Areas for CPAs
by Susan Firriolo, CPA, Tax Correspondence Service –
August 1, 2019
Savvy CPA firms are taking advantage of opportunities to expand their services and quickly deliver more value. International reporting, cannabis guidance, environmental management, and sports and entertainment taxation are among the areas CPAs are enjoying early success in servicing.
As organizations increasingly utilize artificial intelligence, CPAs can offer robotic services focusing on simplifying life for clients. CPAs who are expanding in this area are going all out to know everything about a business so they can advise their clients on and develop robots needed to automate basic processes. Although robots are great at finding solutions, they don’t yet have the capability to find the problem. That’s where the CPA’s skills come in to identify problems, set goals and utilize resources for those rethinking traditional methods. CPAs who are successful in positioning their firms as experts in robotics are being pursued by clients not only for their expertise but also for the human involvement they offer.
Many CPAs are already providing outsourced accounting and bookkeeping services to their clients. Now virtual CFOs are becoming popular. A virtual CFO analyzes real-time business data to optimize a company’s financial performance, manage risk, develop tax strategies and more. They may offer one-time services such as advising on business plans or corporate strategy. Virtual CFO services are also marketed to small businesses that are looking for expertise to scale their operations but are concerned about the costs of hiring a full-time CFO. CPAs finding success in this area are filling the void between accounting and meeting the needs of the C-suite.
Cybersecurity is a hot ticket especially since it has become a business requirement across all industries. CPAs are pursuing cybersecurity services to help clients improve data protection and boost controls for important business processes. Because CPAs already understand internal controls, systems management and risks, it can be a natural segue into offering cybersecurity services. Forensic accountants are particularly adept at analyzing, interpreting, summarizing and communicating complex matters. However, it may not be time to dive in yet. Not all CPAs are prepared to offer cybersecurity services just because they possess certain skills. Those offering cybersecurity services need to come armed with a strong high-tech understanding of software development, access controls, data privacy, multiple security domains, emerging technologies and system vulnerabilities.
Blockchains are a continuing series of records constructed to transmit data. Blockchain-led solutions are giving CPAs a chance to expand their business valuation and financial planning services. CPAs are also offering a new service advising business owners on the cost benefit of entering blockchain. On another level, there will be a demand for CPAs having a detailed understanding of how blockchains work, bringing their expertise together to create blockchain regulations.
The U.S. continues to follow Generally Accepted Accounting Principles (GAAP) for financial reporting which some CPAs feel are outdated standards. Although the U.S. is making a shift from GAAP to International Financial Reporting Standards (IFRS), the move must speed up as many companies are doing more business internationally. CPAs are training themselves in IFRS so they can keep up with the demand this area is beginning to experience. In addition, as international tax laws, expatriate rules and treaties are becoming increasingly confusing to comply with and hard to understand, CPAs who position themselves as experts in this area are positioning their firms as an early and essential business partner to savvy business leaders who want to take advantage of the opportunities world capital markets offer.
Some CPAs are finding they’ve hit the so-called jackpot providing services in the challenging marijuana industry. Before diving in, CPAs must be careful navigating the hodgepodge of state laws that regulate a substance considered illegal by the federal government. CPAs need to make sure they are well experienced with Internal Revenue Code 280E concerning taxation of illegal income. As a result, CPAs servicing the cannabis industry need to assist cannabis businesses in setting up a chart of accounts to ensure transactions are properly allocated for tax and reporting purposes and avoid audits. Another roadblock is that although the federal government has given banks the okay to work with businesses in the cannabis industry, many banks are reluctant to agree until the federal ban is lifted. CPAs who can successfully work with financial institutions to obtain deposit accounts for those in the cannabis business will have the edge. Alternatively, they must be able to teach clients how to keep accurate records and run their cannabis business using only cash. CPAs should also consider establishing a network of other service providers in the cannabis industry, because their guidance can be invaluable in gaining traction in this new industry.
The specialty field of environmental accounting has not yet matured and offers CPAs an opportunity to get in on the growing green movement. Improving the management of environmental costs is good for the world. CPAs offering services in this area use their skills to find ways for organizations to reduce environmental costs and create revenue streams. Companies are also implementing an Environmental Management System (EMS) which gives them more credibility. CPAs can be involved in the planning, reviewing and reporting on a new EMS or improving an existing one.
Sports and Entertainment
With the complexity of U.S., state and international tax codes, athletes and entertainers are increasingly seeking experienced CPAs to protect their net worth, ensure their financial security and explain to them why their 18k gold-trimmed Rolls Royce isn’t a business expense. CPAs offering services to the sports and entertainment industry are becoming an important resource for assuring tax compliance, business structure guidance and estate planning.
Technology changes daily, cannabis is continuing to be legalized, financial reporting standards are evolving, environmental initiatives are increasing, and tax laws are getting more complex. Astute CPAs will improve their skills to take advantage of the opportunities available.
This article appeared in the July/August 2019 issue of New Jersey CPA magazine. Read the full issue.