YOUNGSTOWN, Ohio – Oct. 29 was a good day for Ra’Cole Taltoan. A client called to let her know that she had received funding to expand her salon – funding that Taltoan helped her seek.
“She’ll be able to grow her business now,” Taltoan says. “When she gets finished, she’ll bring in two to three more hairdressers. And that’s community development at its best.”
Community development is a big reason why Taltoan started Rockbrook Business Services after working 25 tax seasons, including 13 at two notable public agencies. About 85% of her clients are people of color and some 60% are businesses, of which 20% are startups. All are from the inner city, she says.
Helping inner city entrepreneurs drives economic development in areas that need it, she says. It gives businesses opportunities to expand and creates job opportunities for residents who otherwise would have difficulty securing work because of a lack of nearby employers, transportation or personal issues.
With her most recent success, Taltoan has secured some $150,000 in funding for clients, she says.
That kind of economic development is vital to areas still reeling from the closing of some large employers, such as Northside Hospital and General Motors Lordstown. “When places like those close, that takes a toll on the local economy,” Taltoan says.
It also changes the mentality of inner city residents, she says. Helping a business to grow and employing their neighbors gives them hope again, she says. It also gives them a way to take ownership of their economic success without having to wait for the next big employer.
Taltoan herself got started out of her house and at the Oakhill Collaborative before opening her own office at 20 Federal Place in 2016. In January, the East Side resident will relocate to an office in her neighborhood and plans to employ two, she says.
Gaining access to capital can be challenging for minority-business owners. Affordability is what keeps them from going to more established accounting firms where monthly bookkeeping services can run anywhere from $500 to at least $1,000 “on the low end,” she says. Clients whose companies make $2,000 monthly still have to think about rent, utilities, groceries and other obligations.
“They don’t have an accountant or a financial adviser who they trust who’s not going to charge them $100 just to sit down,” she says. “How can I expect someone who’s trying to maybe make $2,000 to $3,000 a month to pay me $1,000 out of that?”
To be affordable requires adapting her fees, which she does “by thinking about what I would pay,” she says. “I’ve been in these shoes before and I didn’t have thousands of dollars.”
A recent example of lack of access to capital was the Paycheck Protection Program. Nationally, Black-owned businesses represented just 17.7% of firms that received PPP loans, reports Inc.com. The report cites reasons such as minority-owned businesses entered the pandemic in weaker financial positions than White-owned companies. And few had previous borrowing relationships with a bank.
In addition to affordability and access, diversity and inclusion within the accounting field presents another hurdle. While working at a firm in Dayton where Taltoan was the only Black employee, she recalls White customers preferring to work with White accountants. And the reverse is true among people of color, she says.
“Just like you have the Caucasians who only want to talk to the Caucasians, you have some African Americans who only want to talk to African Americans,” she says.
And the accounting field is overwhelmingly dominated by White professionals.
According to the 2019 Trends report published by the American Institute of Certified Public Accountants, Black/African American professionals comprised just 4% of all professional staff at CPA firms in 2018. That compares to 71% of professionals who are White. Other ethnicities included Asian/Pacific Islander (17%), Hispanic/Latino (6%), and American Indian/Alaskan Native (0.2%).
Most people who enter accounting either knew someone in the field or took a course in high school, says Crystal Cooke, AICPA director of diversity and inclusion. However, many schools where minority students are the majority don’t offer an accounting major.
“A lot of minorities don’t have an accountant in their world,” she says. “They don’t see accounting. They don’t even think of the major.”
That leads to a disparity in college graduates as well. In the 2017-18 school year, Black/African American students accounted for 6% of college graduates who earned a baccalaureate or master’s degree in accounting, compared to 58% of White students.
To improve those numbers, organizations like the AICPA are working with middle- and high schools to introduce accounting to students who aren’t exposed to it, Cooke says. Through its Pilot Bridge Program, the organization educates teachers on how to provide instruction on what the career is and how to teach accounting in school.
“And not just bookkeeping accounting,” Cooke says. “Like managerial accounting and those real meaty topics that they would study when they would go into college and into their career.”
For high schools without accounting programs, they can partner with a local college to host a course for those students to learn about accounting, Cooke suggests. Such a course would aid guidance counselors who might not push students toward accounting because they presume it’s only about taxes. “It’s a huge gap there,” she says.
While the pipeline needs to be addressed, inclusivity in the profession is also “a crucial piece,” Cooke says. If students can’t see themselves working long term in the profession, “It doesn’t matter what we do for the pipeline,” she says.
“Do they see other people who look like them progressing and advancing?” she says. “And can they picture themselves there? When they get there, will they feel a part of the team?”
The industry has made strides to increase the number of women in the profession. And the AICPA needs to figure out what it did for women who moved the needle and apply it to ethnic diversity, Cooke says.
Still, women accounted for only 23% of partners at CPA firms in 2018.
“Even though women are progressing, women of color seem to be still struggling,” Cooke says. “So, we need to figure out what we need to do to support women of color.”
Inclusivity issues are something that Trinette Simon has recognized in the 20-plus years she’s worked in accounting and finance. Of the some 500 professionals at Cohen & Co., where Simon works as a director, about 20 are minorities, she says.
“I’ve always been maybe the one or one of two in the group,” Simon says. “Even in class, I don’t recall seeing too many minorities in the classes.”
To address diversity and inclusion, Cohen & Co. has formalized a team to put something in place “that’s not just a temporary Band-Aid,” she says. The company hosts webinars with staff to foster a more inclusive work environment, which lends itself toward retention, she says. If a company lacks an inclusive environment, “Even if you hire diverse employees, they’re not going to stay,” Simon says.
“I think it’s good for everyone. And it’s opening up a lot more opportunities,” she says.
Simon looks to reach out to schools as well and encourage students to keep an open mind about the accounting profession, which is more than just “pushing numbers,” she says.
“We have to educate students earlier before college. You have to explain what the field really is versus the stereotype that you might see somewhere else,” she says. “You learn a whole lot. You see how things are made. So it’s kind of an educational process too.”
AICPA’s Cooke agrees, saying that accounting can even be the foundation of entrepreneurship.
“Accounting is the language of business. Knowing that and the inner workings of how a financial statement works, and what goes into it. That alone is a great tool to have in life,” she says. “And a lot of CFOs go on to become CEOs of organizations.”