Academic journal article Journal of Accountancy

Strategic Planning: What CPAs Need to Know

Academic journal article Journal of Accountancy

Strategic Planning: What CPAs Need to Know

Article excerpt

Take a minute to think about the nature of your business. If you are in public practice, is it limited to tax preparation and auditing or are you are providing clients with other services as well? If you are in private practice, is your company ready to move ahead and are you prepared to advise management about the future?


If you're like many CPAs in public practice, you've probably started doing some general consulting work. You may have helped clients restructure debt or refinance their businesses or deal with bankruptcy. Maybe you've begun advising clients about buying and setting up microcomputer systems.

Then, of course, there's litigation support--one of the fastest-growing areas of CPA practice. You may have been asked to evaluate assets to be divided in divorce cases or determine the monetary cost of damages to plaintiffs in liability suits.

There's no question the accounting profession is changing. No longer are CPAs focusing solely on what happened to clients' businesses during the past year. Events are taking place and trends are developing that will affect you--and your clients--in the years ahead. What's more, many of those development swill present you with new, exciting and profitable ways to expand your business.

Are you prepared to take advantage of those opportunities? Do you know where your firm is headed and where you want it to go? Are you keeping up with developments that could affect the success of your firm? And most important, do you know what you have to do in order to move your firm forward in the 1990s?

If the answer to these questions is "yes," your operation is in good shape. You're undoubtedly doing well now. And you're prepared to grow and prosper in the years ahead. On the other hand, if the answer is "no," you probably have the sense that your firm is drifting and continues to be shaped by circumstances as they occur.

It doesn't have to be that way. By making strategic planning part of your regular activities, you and your partners can gain control of your partners. You can give your firm a definite direction and help it reach the destination you choose.



CPAs who work for small or family-owned businesses or larger corporations also can benefit by introducing strategic planning into their companies. They can help other executives begin to focus on the future. They can enable the company to identify and thereby take advantage of opportunities that otherwise might be overlooked or anticipate problems before they become crises. By initiating and remaining involved in the planning process (see sidebar on page 37), corporate CPAs can influence the future of their companies directly and assume a greater role in company decision making.


The words "strategic planning" strike terror into the hearts of many businessespeople. Yet, despite its imposing name, strategic planning is simply an ongoing process that consists of setting goals and figuring out the best ways to reach them.

There's nothing difficult about it. The process is the same whether you work for a large corporation or operate as a sole proprietor. In fact, if you're a CPA operating an accounting firm, strategic planning offers a double benefit. First, it helps your own firm move forward. Second, it can become a highly profitable service to offer your clients (see sidebar on page 39). Here's how to get started.


The first step in the strategic planning process is to gather all your key people together to take a look at the firm as it exists right now. What is it that you do? How, when and where do you do it? And what is it that you've been trying to accomplish? Put your description into a short paragraph. It is your "statement of purpose. …

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