are you sure that grass is greener?
by ed mendlowitz
call me before you do anything: the art of accounting
i know many cpas who left public accountancy to take a “better” job. for many of them this was a mistake. for some it worked out, so if you are one of the lucky few, you can stop reading what i have to say.
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there are basically three types of companies the accountant could work for – a small client that does not have an in-house controller or cfo, one whose controller will be replaced by the departing cpa, or a large company that has an entire accounting staff already in place. let’s talk about working for the small companies that do not have a controller.
in many situations the accountant is hired to bring in-house much of the work the independent accounting firm was doing, with the client anticipating substantial savings in fees. at the same time the accountant is told the client wants to expand their business and needs a sharp numbers person as a key participant in that growth.
the growth part could be true and in that case the accountant would play a key role. however, if growth was the reason, the framework would have already been taking place. the product line would have been expanded, along with the customer base, distribution and marketing, while additional personnel would already have been hired. it is logical for the company to need an in-house accountant if it is expanding.
however, in many cases this is not what happens. the owner thinks that hiring the cpa working on his account (and sometimes it is a partner) would pay for itself with reduced accounting fees. so, the accountant quits his or her job and starts working for the client. what they think will be an exciting adventure and career boost becomes a dead-end slot where about 75 percent of the work is what they were doing already, with not much time left for managerial assistance or to venture into new fields. in effect, their learning ends, along with the stimulation of working daily with other professionals and a wide range of clients.
so is the ability to share complicated situations with colleagues. the new controller can’t call the accounting firm because that will generate a time charge. what happens is the accountant surrenders their career and the client no longer has the support of the accounting firm with varied specialists and access to the most experienced partners, who also are great door openers with bankers and others clients occasionally need. the accountant becomes dead-ended in an overhead position with the prospect of pretty low raises. these people usually last about five years and then they switch jobs, spending the rest of their careers locked in a time warp.
this obviously is not the case where the company they are joining is really growing. then it might be stimulating and last longer than five years. there are many reasons these people leave public accounting, but i suggest they are illusory and might deal with an immediate frustration for which the good is being ignored while the bad is concentrated on too much. not advisable for managing a long-term career.
even when things work out great, the future of a family-owned business will be somewhat clouded by other family members potentially joining the company, and the owner becoming incapacitated, dying or selling. if the business really takes off, it is probable that someone more experienced will replace you.
good luck!
2 responses to “when cpas leave to work for a client”
ca r. venkata subramani
an accountant needs to weigh the possibility of the client growing fast vis-a-vis not taking off for a long time to come. when the going gets tough for the client, the accountant would be reduced to a fire-fighting role managing the tight finances. this would deprive the accountant of learning new things and keeping abreast of several professional advancements which will impact the growth in the long run.
continuing to be part of a large cpa firm may have substantial advantages from a career grown perspective as the accountant would be always ‘sharpening the saw’. of course the accountant should take the plunge when he/she can smell a unicorn in the ‘small client’ that he/she plans to venture into. this is easier said than done, but that is how life is – taking informed decisions among the plethora of choices!
todd burford
my career immediately started working in the private world so i never had this choice. but so many of my friends and old school mates have had the difficult choice of deciding where to continue their careers. i don’t think there is a wrong decision but you must take the time to evaluate both options.