In fact, your accountant may well be the smartest person you know, and there are several reasons. First, like lawyers and doctors, accountants offer their services as part of a “professional service firm,” and as such, they’re required to undergo years of rigorous training and education… and they’re subject to scrutiny (and often liability) in connection with the veracity of their advice. To earn the “Certified Public Accountant” designation, accountants must demonstrate mastery of their profession by passing serious certification exams… just as attorneys must pass the bar exam in order to be licensed to practice law. And, like attorneys, accountants have to be well-versed in their specialized areas of the law (tax law, for instance). But accountants, unlike many attorneys, also must be good at math! And they have to understand business, in order to serve their business clients, to a level of depth which usually far surpasses the business smarts of your average doctor or lawyer. Since an accountant’s “stock in trade” is their knowledge and advice, your accountant may well be the smartest person on your business’s “team.”
What’s A “Professional Service Firm?”
A medical practice… a law partnership… a management consultancy… an engineering outfit… or an accounting firm. These are all examples of “professional service firms,” staffed by very-smart people whose business is helping you through what they know, what they think, and what they have the capacity to learn.
In fact, one of the greatest historical developments in business was initiated way back in 1926 by an accountant – a very smart professor of accounting – whose name was James O. McKinsey.
McKinsey noticed drastic inefficiencies in the way the government and the military handled their procurement contracts. Along with his partner, the eminent Marvin Bower, McKinsey formed the early version of McKinsey & Company.
Today, McKinsey is arguably the world’s preeminent management consulting firm, with thousands of super-smart consultants and analysts working in virtually every country and industry on the globe.
And McKinsey and Bower developed their firm on the model of a law firm, intentionally creating what might be the first non-attorney “professional services firm,” where consultants propose improvement projects to their business clients which typically provide at least ten times the cost savings (or revenue enhancement) the firm charges in fees for the project.
You don’t become a “manager” or “vice president” in a professional services firm… if you’re good, you “make partner.” And, as is the case with most law firms or medical practices, it’s typically “up or out” – you either make partner after a certain number of years, or you’re counseled to leave the firm and find something else to do.
It Doesn’t Stop With Certification Or Licensure
Attorneys, accountants, doctors, consultants, and other professional service providers have to stay current in their disciplines in order to maintain their privilege to continue serving clients.
Attorneys, for example, must constantly keep track of their “CLEs” – their “continuing legal education” credits, which are tracked by their state bar associations and determine whether their law licenses can be continued in force.
Accountants must undergo at least eighty hours of ongoing education every two years in order to maintain their hard-won “CPA” designations.
And for accountants (as well as many other professionals in other disciplines), those many hours of continuing education may not be enough to truly stay current with the rapid changes in their industry.
Tax law, for instance, is almost like an ever-moving target, and it could be argued that each tax year is so different from any other that a good tax accountant almost has to educate themselves anew every year!
So, yes, your accountant is smart. She has to be! But a good accountant spends no time at all telling you how smart they are. They show you, by providing excellent service. By doing the difficult work of taking great care of your business or personal finances, while making it look easy. It takes smarts to be an accountant… and even more to be a great accountant, who works with you as an advisor and thought partner to help your savings and business grow, year after year.