CPAs are trusted business advisers, trained to approach problems from an analytical, informed viewpoint. But there’s one perspective a professor says not enough accountants are considering.
Reginald Lee joined us on the most recent episode of The State of Business podcast to discuss strategic cost transformation. He said this perspective includes company operations in a way that isn’t considered in a traditional accounting analysis. And although some CPAs are resistant at first, he said he’s found most embrace this different approach once they’ve taken the time to understand it.
“Many accountants have known that there was something wrong with accounting but couldn't figure out what it was,” he said. “So, for those who've been questioning it, or understand its limitations, then that process is generally one of unlearning some things that they know and relearning it a different way or in a different context, and then they're fine with it.”
For CPAs and firms, Lee said strategic cost transformation allows them to have a broader conversation about the performance of an organization.
The first step to implementation is sitting down with your organization’s leaders to understand how things will be different. After that, Lee said everyone needs to agree on the focus of the organization, and to spread general awareness of what’s happening.
“Start putting the measures and metrics in place for people to be able to act in a way that's in alignment with the business domain management concept, versus going back to being accounting centric,” he said.
There might be roadblocks along the way, Lee said, such as IT issues and unlearning concepts that have been relied on for years. But with continued emphasis on this approach, it will have long-term benefits.
“It's basically a tool to help people see a managed organization more effectively,” he said. “So, the extent to which people can step back and see that I think that they're going to benefit a lot.”