When leaders think of how to improve their customer’s experience, they often associate this practice with retail or technology services that are digital-first, transactional businesses. While the need for a positive customer experience is widely acknowledged, its importance across industries is highlighted by the fact that 86% of consumers say they would no longer purchase from a brand after only two poor experiences. Additionally, 73% of consumers cite experience as a main purchasing consideration.

Similar to technology and retail industries, accounting and advisory firms began increasing their customer experience efforts in recent years to focus on client retention and growth. This prioritization is still expanding across the industry, but there is no doubt that now is the time to implement personalized CX strategies in accounting and advisory client practices. 

A differentiator: Why CX matters in accounting and advisory 

In professional services, prioritizing the delivery of a positive experience can yield significant benefits for the organization as a whole. 

Focusing on client relationships and satisfaction can lead to longer and more productive partnerships, directly impacting the firm’s revenue. Organizations that prioritize CX strategies are 26 times more likely to experience annual growth of 20% or more. Additionally, nurturing existing client relationships fosters trust, paving the way for incremental projects and increased budgets.

Long-term client relationships also enhance efficiency for both clients and employees. Reducing client turnover provides a stable work environment for team members, creating opportunities for growth. Conversely, high turnover can hinder employee development, as they constantly onboard and offboard from various projects.

Prioritizing CX serves as a key differentiator in the accounting and advisory industry. When organizations seek new partnerships, client retention and growth metrics play a crucial role in decision-making. Firms that can clearly articulate their CX priorities, processes and successes will stand out in a competitive market.

Providing personalized client experiences

Gone are the days of transactional client encounters. The rise of technology, increasing client expectations and stiff competition have clients looking for much more than technical expertise. Clients expect firms to have deep knowledge and understanding of their industry, and their company’s unique day-to-day needs. To succeed in the current landscape, firms must provide personalized and proactive approaches to customer service. 

One of the most effective ways to provide a holistic approach to client relationships is having a dedicated team focused on understanding and improving the overall client experience. This team engages with clients at all points in their journey, soliciting feedback from prospects and clients to understand buying motivations, decisions and strategy as a neutral party. They can also host conversations with the client, separately from practitioners, to address questions and concerns. 

Practitioners, of course, build relationships and understanding with clients, but a dedicated CX team can take an “outside in” approach, starting from the customer perspective and driving inward to understand the internal changes needed to deliver growth. Enlisting a dedicated CX team provides a set of fresh eyes and new perspectives that can be helpful for practitioners who are closest to the day-to-day work and processes. 

This CX team is charged with checking in on clients proactively and anticipating potential issues before they arise. One way to accomplish this involves the CX team in client onboarding, so they can have time to learn the client’s goals, brand strategy and challenges at a firm level, separate from the expectations of the actual work product. This holistic approach can result in a higher client retention rate. Clients often say this approach has made them feel more seen and understood, and more likely to be loyal clients. 

Measuring CX success 

When it comes to measuring CX success, there are a few metrics that are commonly used. Both the Net Promoter Score and the Customer Satisfaction Score are used across industries to measure the overall customer experience. NPS is a metric used to measure customer loyalty with a company or brand by asking customers how likely they are to recommend a company or service to a friend or colleague. CSAT is a metric that measures how satisfied customers are with the firm’s services. CSAT can be useful for identifying issues or achievements at specific points in the customer journey. 

Both metrics are important for CX measurement, but when they are not used to their fullest extent, they are limited to acting as vanity metrics. Often, if a company scores well on either of these metrics, it is common to take these scores at face value and assume the customer is satisfied. Though NPS and CSAT can give your CX team insightful information, follow-up conversations and questions must occur to learn more about the client feedback. Closing the feedback loop with clients is paramount to gain their loyalty.

In addition to these metrics, the CX team should have consistent check-in meetings with clients to provide a space for feedback and questions. The best form of measurement is receiving consistent and honest client feedback across the spectrum of service delivery, from the proposal stage to user experiences with products and services to project closeout. The ability to share and receive feedback requires a level of trust and understanding that is vital in the CX space.  When firms lean on metrics alone, they miss out on important insights and information.  

The bottom line 

The days of transactional client experience in the accounting industry are fading. Firms must transition to a holistic and personalized approach, and be willing to dedicate resources to understanding the overall client experience. Though this approach will take time and investment, increased retention rates, higher revenue and employee growth are just a few of the potential successes linked to a strong CX program. Developing a separate CX practice within your firm allows for more opportunities to build client relationships and ensure that client needs are met and exceeded. 

The American Institute of CPAs teamed up with the National Association of State Auditors, Comptrollers and Treasurers on a joint report calling attention to the urgent need for accountants in state and local governments.

The report points to the talent shortage that’s affecting not only accounting firms and private sector businesses, but the public sector as well. It recommends a number of possible remedies, such as educating legislative bodies about the value of the CPA, offering competitive salaries for CPAs in government and fees paid to outside auditors, and reviewing the thresholds that trigger certain kinds of audits.

“We have a talent shortage in accounting that affects business as a whole, and many of the pipeline initiatives the profession is putting in place will help the public sector as well,” said Susan Coffey, the AICPA’s CEO of public accounting, in a statement last week. “But accountants who do government work face unique challenges that require more specialized solutions. The public deserves to know its tax dollars are being spent as intended — and that requires strong government finance teams and experienced auditors.”

The AICPA has also been pursuing efforts to encourage more young people to join the accounting profession. In May, an independent panel convened by the AICPA, the National Pipeline Advisory Group, delivered a series of recommendations in its Accounting Talent Solutions Draft Report on addressing the accounting talent shortage. Those recommendations were later discussed by a panel at the AICPA Engage Conference in June.

The new report points out that government and private sector accounting and auditing standards often differ, so CPAs who work in the public sector require specialized expertise. However, salaries and audit fees are often well below those offered in the private sector, the report found. State and local governments don’t always understand the value CPAs bring to finance teams and the audit process, so hiring is often driven by a cost-savings approach, without recognizing the qualifications that an experienced staff accountant or outside auditor could bring.

Salary is a big hurdle. The report recommends making government pay more competitive with the private sector. Government entities should use the available data to benchmark salaries for CPAs against similar positions in the public and private sectors and consider options for remote or hybrid work and flexible hours.

Colleges and universities should increase the number of classes that address governmental topics and work to build relationships with government entities to increase their visibility on campus, the report recommends. State and local governments should support internships, mentorships and financial incentives for accountants who want to work in government and pursue a CPA.

CPA firms should emphasize to staff that working in the government practice is a good career path and adopt a staffing model that allows staff to specialize in governmental audits year-round without having to work additional hours during the more traditional busy season.

“We’re urging a renewed investment in public-sector accounting and auditing by state and local governments and CPA firms,” said NASACT executive director Kinney Poynter in a statement. “Trust in government requires governments to prepare clear, consistent financial data that is backed by a strong audit function. It’s essential we make this a priority.”

The report recommends aligning and simplifying accounting and auditing standards. Regulators should minimize differences in accounting and audit standards for the government and private sectors, and standard-setters should more routinely sound out smaller governmental entities on the impact of proposed standards, the report suggests.

Federal and state governments should periodically review audit threshold requirements and consider offering audit alternatives for smaller governmental entities that would still provide accountability (such as reviews, agreed-upon procedures or compliance examinations).

States should consider ways to provide accounting and auditing resources and/or financial assistance to local governments to help them prepare for and undergo a timely audit.

When considering outside auditors, governments should look at CPA firm qualifications, not only the proposed fees, according to the report. And to broaden the pool of potential auditors, government entities should consider eliminating geographical limitations on permissible firms.

State governments should develop a program for legislative bodies and government officials (at both the state and local levels) to explain the CPA value proposition and the need for qualified, competitively paid accounting, auditing and finance functions, as well as the risks of failing to make that investment.

The Financial Accounting Standards Board has decided to tweak some of its standards related to contract assets and liabilities for construction contractors in response to recommendations from its Private Company Council, as well as credit losses for financial institutions.

During a meeting last week, according to a summary posted to FASB’s website, FASB endorsed a recommendation from the PCC to provide an alternative for private companies to present contract assets and contract liabilities on a gross basis on the statement of financial position. The scope would be limited to private construction companies. The presentation alternative would apply at the entity level, and companies would be required to disclose when they elected to use the presentation alternative. The PCC and FASB both decided to require a full retrospective transition approach and related transition disclosures. But when a private company initially applies the presentation alternative for its contract assets and liabilities, it wouldn’t need to justify why that approach is preferable. FASB has asked its staff to draft a proposed accounting standards update that would be voted on by written ballot. There will be a 45-day comment period for the proposed update.

FASB also discussed another PCC project at the meeting on the application of the credit losses standard to current accounts receivable and contract assets arising from revenue transactions. It decided that private companies and not-for-profit entities (except for nonprofit conduit bond obligors) would be eligible for a simplified approach. FASB endorsed the PCC’s decision that the scope of the simplified approach would be current accounts receivable and contract asset balances arising from transactions accounted for under FASB’s revenue recognition standard.

Patrick Dorsman/Financial Accounting Foundation

FASB also backed the PCC’s decision to provide a recognition and measurement practical expedient and, for entities that elect the practical expedient, an accounting policy election designed to simplify the credit loss allowance determination. An entity that opts for the practical expedient wouldn’t be required to adjust historical loss information to reflect changes related to relevant economic data. The entity instead would assume that current economic conditions as of the balance sheet date will persist throughout the forecast period.

An entity that elects the practical expedient would be allowed to make an accounting policy election to consider subsequent cash collection after the balance sheet date but prior to the date the financial statements are available to be issued.

FASB endorsed the PCC’s decision to require an entity to disclose when the practical expedient and accounting policy election have been used, as well as to require a prospective transition method, with the ability for an entity to forgo a preferability assessment the first time it elects the practical expedient and the accounting policy election.

As with the contract assets and liability changes, FASB asked its staff to draft a proposed accounting standards update that can be voted on by written ballot, along with a 45-day comment period for the proposed update.

FASB chair Richard Jones and board member Hillary Salo suggested during the meeting that similar changes might be considered for public companies, although other board members seemed skeptical about the need for it. The board members seem to be open to at least including a question in the proposal about whether public companies want to use the practical expedient.