How to develop consulting skills.

Sheldon Eveloff, CPA, a partner of Goldenberg/Rosenthal, Philadelphia, and former member of the American Institute of CPAs management advisory services executive committee and practice standards and administration committee, explains how CPAs can expand their professional competence to work in a new practice area.

The leopard cannot change its spots, but the CPA is capable of adding the right skills to become a management consultant. This step can be especially important to smaller CPA firms, since the addition of consulting skills gives them an additional competitive edge in a high-growth practice area.

PLANNED DEVELOPMENT

Consulting, in the broadest sense, is almost unavoidable. Advising management has been an integral part of CPA services since the very beginning of our profession. It's a natural by-product of performing tax, accounting and auditing services, but only up to a point.

When a firm or an individual CPA decides to offer formal consulting services, the depth of expertise and professional approach must be better defined and more finely tuned. Since consulting activities can take many forms, the firm must decide which types of activities are most suited to firm members' talents and client needs. Today, consulting includes a wide range of services, such as developing information systems, providing forecasts and projections, performing profitability studies, conducting organizational reviews and providing litigation support.

Consulting skills are acquired by design. The motivated CPA must undertake a three-point plan of skills development:

* Continuing education.

* Reading.

* Apprenticeship opportunities.

CONTINUING EDUCATION

Anyone who wants a successful consulting practice needs a significant amount of continuing education. Nothing substitutes for a solid base of knowledge. Fortunately, there are many fine sources of continuing education within easy reach of almost every CPA.

One obvious source is formal college education through, for example, a master's is business administration or an executive program on nights or weekends. Other possibilities are courses or advanced degrees in computer technology, public finance, information services or electronic data processing.

Some larger firms offer structured training programs that prepare CPAs in specific consulting areas and allow attendance by members of other firms. Another alternative for small firms is to hire a local business school professor to run an in-house training program that is conducted after hours.

Perhaps the most efficient, least costly and most productive sources of continuing education are courses sponsored by the AICPA and the state CPA societies. These condensed sessions heighten awareness and intensify analytical skills while giving attendees the advantage of working alongside peers with different insights. Courses available through the AICPA that might be helpful include those on small business consulting, basic cost systems, business valuation methods and forecasts and projections.

The AICPA certificate of educational achievement (CEA) programs are designed to give in-depth knowledge in specialized areas through an integrated series of courses. CEA programs are offered to AICPA and state society members who meet certain prerequisites.

Equally enlightening are programs sponsored by other professional organizations, such as the Electronic Data Processing Auditors Foundation, the Data-Tech Institute, the American Management Association and the Institute of Management Consultants. In addition, other courses focus more directly on specific interests or industries. Certain trade groups and professional organizations, such as the Family Firm Institute, for privately held family businesses, or the Data Processing Management Association, are good sources of more narrowly focused courses. Self-study and informal learning programs are other educational possibilities.

READING

Consultants can never do too much reading. Here are some required titles the small business consultant will need to succeed: Handbook of Management Consulting Services (McGraw-Hill), Management Advisory Services by CPAs (AICPA), Harvard Business Review (Harvard Business School), Strategic Behavior in Business and Government (Little, Brown) and Operational Cost Accounting (A. G. Merrick).

A reference library is just as important to a consulting practice as it is to an auditing and accounting practice. Volumes such as the AICPA statement on standards for consulting services, technical consulting practice aids and small business consulting aids should be part of a firm's permanent reference library. Firms also should include technical, industry, trade and association magazines, as well as publications of state CPA societies, the U.S. Chamber of Commerce and the Small Business Administration.

CPAs expanding into consulting should plan to devote time to organizing their libraries and to spend money equipping them. The consultants' section of a firm library not only reinforces consultants' continuing education but also serves as ongoing support for engagements. Professional staff should receive reading materials, such as consulting books, periodicals and practice aids, so they are aware of them and remain up-to-date. All publications should end up in the library for firm members' reference. Additionally, a CPA firm should periodically purge its library so it doesn't keep materials that may already be outdated in the fast-changing consulting field.

APPRENTICESHIP

OPPORTUNITIES

Reading is a wonderful foundation for a consultant and courses add immeasurably to one's technical knowledge, but experience is the best teacher of all. This is especially true in consulting, where theory is useless unless properly applied.

The best way to get experience is to learn by doing. Becoming a good consultant involves working under the guidance of a good consultant. Small CPA firms with few consulting assignments often don't have enough on-the-job training to grow their own consultants. When an engagement possibility arises, a good strategy for a small firm is to call in experienced consultants from another firm to work cooperatively in a venture that satisfies the client and provides apprenticeship opportunities for staff members.

Cooperative engagements offer a training platform for many practitioners and a chance to upgrade their firms' consulting skills. On-the-job training under an experienced consultant is invaluable to CPAs in the process of becoming consultants. It also gives clients the special services of experienced specialists that a small firm may not be able to afford full-time.

Many firms avoid these arrangements, however, because they fear a larger firm may take a client away once the engagement is over. This concern can be hard to overcome, but firms can use safeguards, such as sound contractual agreements on the conditions of the engagement.

Cooperative engagements give small firms a supremely effective, custom-made training vehicle without the expense of internally developed training programs. They can help transform CPAs into experienced, confident consultants.

BECOMING A CONSULTANT

Not every CPA will want to become a consultant, but for those who do, the three building blocks for a new career or practice area are clear. First, it's important to gather continuing education credits in business management and then become familiar with the literature that teaches how to apply business and organizational management theory. Finally, it's necessary to observe how a seasoned consultant uses his or her skills during a cooperative engagement or joint venture. CPAs who take these steps will gain not only professional satisfaction but also client appreciation of their increased ability to identify and solve business problems.