I sold my first accounting practice in the 1990s.
It was hard getting staff back then.
In 2012 after working as a senior manager with 2 of Canada’s top 6 CPA firms, I packed it in and hung out my shingle again. This time I was equipped with the knowledge that getting staff wasn’t going to be easy.
Working as a public accountant and tax specialist (in Canada’s lucrative SR&ED tax incentives) I teamed up with a professional engineer and purchased a SR&ED practice. The vendor was beginning to realize that he had been targeted by the CRA, but he had good clients and we were able to make it work.
I reasoned that technology had made it easier to collaborate over large distances and set about taking advantage of “arbitrage” in accounting services –
“the simultaneous buying and selling of securities, currency, or commodities in different markets or in derivative forms in order to take advantage of differing prices for the same asset”
Theoretically arbitrage shouldn’t work since markets tend to move towards equalibrium over time. However accounting is somewhat regulated. What’s more it isn’t straightforward to integrate staff from the Philippines or India into a local business.
That requires an understanding of cultural differences, local market conditions, and the effectiveness of tools that make integration work.
I also reasoned that many of my competitors were being pushed to focus on tools that streamlined workflows. “Certified” bookkeepers were getting software certifications to build credibility – but they were doing it to provide tax preparation services.
Their clients needed tax expertise, but they were investing in software training. Accounting software (and tax preparation software) doesn’t make you a professional accountant any more than a word processor makes you a writer.
It has been our experience that CPAs from the Philippines are every bit as professional as Canadian CPAs. They function very well as accounting technologists and can learn Canadian tax principles on the job. Kept motivated (well paid in local terms) and engaged they can be a key component in a profitable CPA firm.
In Canada the concept of arbitrage works well with Philippine CPAs. However an even greater opportunity exists in building out the concept of arbitrage between Canada and the US.