At first glance, Russia’s invasion of Ukraine might seem well outside the purview of small to midsize accounting firms, especially in the United States. But while the war is being fought well over 4,000 miles from the U.S. East Coast, the uncertainty and economic stress caused by the conflict means that businesses need trusted advice and calm counsel.
That’s where CPAs can make perhaps their biggest impact, said James Metzler, CPA, CGMA, founder of Metzler Advisory Group LLC and former vice president of small firm interests with the AICPA.
“These are scary times,” he said. “It’s depressing. There are all kinds of emotions. Clients are scared.”
CPAs can best help by reaching out to clients with an empathetic ear and providing a steady source of support, Metzler said, noting that businesses are looking for a rock they can lean on during a period of great uncertainty.
“The role of the CPA is being there, being a leader, being a rock, being the voice of reason,” he said.
Metzler sees CPAs stepping into a role similar to the one they played when assisting and advising clients trying to apply for Paycheck Protection Program forgivable loans and other COVID-19 business relief programs. Many firms, including some previously viewed by clients mainly as providers of tax and/or audit services, flourished in the role of trusted adviser to businesses trying to make it through the pandemic.
How can CPA firms best serve their clients at this time? Experts interviewed for this article suggest two areas of focus.
Understand the human impact
Most small firms and many midsize ones don’t have direct connections to the war in Ukraine, but staff and clients already worn down by two years of the COVID-19 pandemic now may be overwhelmed by news reports that could be deeply disturbing.
“All of us risk impacts to our health and well-being because we are already facing overwhelm, burnout, and anxiousness,” said accounting firm consultant Jennifer Wilson, CEO of ConvergenceCoaching LLC. “World conflict simply piles on a whole new set of stressors”
The unpredictable nature of the conflict brings fear and uncertainty related to possible escalation as well as increased inflation due to the war’s impacts on global fossil fuel, materials, and food supplies.
“The biggest issues that the Russian invasion is creating for any sized firm, just because it is made up of people, is another round of fear and uncertainty, coupled with growing inflation,” said Bill Reeb, CPA/CITP, CGMA, the CEO of the Succession Institute and a former AICPA chair.
While many small to midsize firms don’t have operations or clients in Russia, those that do must decide whether to continue doing business in a country under severe economic sanctions by the United States and many other countries. Hundreds of businesses, including all of the Big Four accounting firms, have ceased operations and/or stopped doing business in Russia or with Russian companies.
Firms of all sizes should assess their exposure to the Russian market and determine if they need to make business changes to comply with sanctions or to make a statement that they stand with Ukraine against Russia’s unprovoked attack.
“Firms need to evaluate ways they may be supporting the Russian economy and determining what changes they need to make to align to their values related to the conflict,” Wilson said.
Firms also should be aware of personal connections staff and clients may have with Russia and Ukraine.
“We have a melting pot here, and many firms [have employees from Ukraine or Russia] who still have family there and are fearful for their safety,” Wilson said.
Be proactive and nimble
CPAs should take the initiative to reach out to clients and provide assistance in the most effective ways possible. For individuals, that might include answering questions about what to do with investment portfolios as the stock market faces downward pricing pressures exacerbated by the war.
“All CPAs are asked about investments, and some specialize in wealth management services,” Wilson said. “This conflict has a market impact, and clients are nervous and need advice.”
Business clients may need guidance in a wide variety of areas, many of which are industry-specific. It’s important for CPAs to understand each client’s business and industry, but it’s even more important for firms and their clients to be nimble, Metzler said.
For example, he said, firms may have information or advice that would be useful to many of their clients. In those cases, firms may find it more efficient to deliver their intelligence to multiple clients at once via a webcast presented over a platform such as Zoom.
“Communication quality and nimbleness are key,” Metzler said.
The war happening during tax and busy season makes it challenging for many CPAs to find the bandwidth to provide additional assistance to clients. But the need for guidance and expertise makes it all the more important for firms to find a way to assist.
“The notion of the trusted adviser, that coach, that leader, that rock — clients need that more than ever,” Metzler said. “It’s all about the clients … so proactivity is everything.”
— To comment on this article or to suggest an idea for another article, contact Jeff Drew at [email protected].