In a recent CFO magazine article, the ingenuity of accounting firms to handle the economic downturn proves that the industry is not only prepared to handle financial crisis but certainly the most appropriate group to do so. Accountants make sense of the mess, and besides balancing the numbers and offering advisory services to clients seeking to recession-proof their business plans, firms are now meeting crisis head on via crisis management. This may just be the next big thing for accounting firms across the country, and a smart way to ensure there is plenty of work to go around in the months and years ahead.
Since October, firms such as WithumSmith & Brown, J.H. Cohn, and Wipfli have launched crisis-management or economic-recovery practices, offering to help struggling companies in areas from cash management and working capital to financing and risk management.
But they won't take just anyone as a client. "We're not in the business of workouts or helping the dead and dying," says Jeff Greeneway, partner and consulting leader for Wipfli's "Troubled Economy Surviving and Thriving" task force. "We're focusing on companies that have some struggles or immediate crises and want to [make lemonade from] lemons."
The Big Four accounting firms, too, have consulting groups devoted to crisis management and economic recovery. But just as doctors are not immune to disease, the accountancies themselves are prey to recessionary pains, as their woe-stricken clients cut back on services or delay payments. Crisis management, then, can help compensate for the loss of conventional business.
"The accounting industry lags about 12 months behind the recession, so just now it's hitting the accounting firms," says Allan Koltin, president and CEO of PDI Global, a marketing and management consultancy. That means CFOs should be getting more phone calls and E-mails offering assistance.
"A big theme for accounting firms is to stay positive and be really proactive," says Koltin. "They're going to be out there saying that they've lived through these recessions before and they can help you, too."
Consulting and advisory are getting a makeover, and this can only lead to good things. These firms have the expertise to deftly guide clients through tricky times and many have experienced recessions before. Look at McGladrey - created just before the Great Depression, they are now the 7th largest accounting firm worldwide! That says something about the ability of accountants to weather the storm.
M&A is seeing a huge leap, even in the face of an uncertain economic recovery timeline, and clients need assurance that their intended goals are not only sound but accomplished correctly. Who can guide them? CPAs of course!
This is nothing new, of course, accounting firms have been ramping up their economic recovery efforts since last year (always ahead of the curve, those CPAs!), providing much-needed forensic accounting, compliance, restructuring, and business valuation services to clients looking to ensure their companies survive the economic turmoil.
Just one more reminder that the accounting industry is at the forefront of taking financial uncertainty and turning it into opportunity.