CPA Trendlines

INSIDE Public Accounting Names the 25 “Best of the Best” CPA Firms

This is the 14th year INSIDE Public Accounting has named the best-managed accounting firms.

Two hundred fifty firms participated in this year’s IPA Annual Survey and Analysis of Firms. Each of the firms is eligible for the IPA Best of Best honor, regardless of size.

“Best of the Best firms represent the top 25 accounting firms in the nation who each demonstrate the right combination of vision, planning, and execution to deliver superior performance,” said Michael Platt, principal of the Platt Consulting Group and publisher of INSIDE Public Accounting.

The 2008 Best of the Best firms range in size from $6 million to $275 million in revenue; represent nine states; have practice mixes ranging from audit specialists (as high as 93 percent of net fees) to tax specialists (71 percent of net fees) and everything in between. Eleven of the 25 firms are from the West, and 10 of those 11 firms are based in California, primarily clustered around San Francisco and Los Angeles.

With revenue growth of the group at 24.2 percent and income growth at 27.8 percent, Best of the Best firms turn in a scorecard that is the envy of their peers. They carefully weave together benefit packages, staff salaries, expense management, staff leverage, training, strategic planning, investments in their future, and the right feedback systems to accelerate growth of their firms. Not only are their growth rates strong, but they are able to pay partners on average 75 percent more than their peers – with average partner compensation crossing the $700,000 threshold for the first time in IPA history.

The Best of the Best Firms, in alphabetical order:

Amper, Politziner & Mattia / Edison, NJ
Argy, Wiltse & Robinson / McLean, VA
Armanino McKenna / San Ramon, CA
Aronson & Company / Rockville, MD
Beers + Cutler / Vienna, VA
Burr, Pilger & Mayer / San Francisco
Feeley & Driscoll / Boston
Frazier & Deeter / Atlanta
Gerson Preston Robinson & Co. / Miami Beach
Glenn M. Gelman & Associates / Santa Ana, CA
Grassi & Co., CPAs / Lake Success, NY
Greenstein, Rogoff, Olsen & Co. / Fremont, CA
Hein & Associates / Denver
HMWC CPAs & Business Advisors / Tustin, CA
Holthouse Carlin & Van Trigt / Santa Monica, CA
Johnson Lambert & Co. / Raleigh, NC
KMJ Corbin & Company / Irvine, CA
Marcum & Kliegman / Melville, NY
Morrison, Brown, Argiz & Farra / Miami
Novogradac & Company / San Francisco
Reznick Group / Bethesda, MD
SC&H Group / Sparks, MD
Seiler LLP / Redwood City, CA
Squar, Milner, Peterson, Miranda & Williamson / Newport Beach, CA
The Schonbraun McCann Group / New York City

SURVEY RESULTS: Busy Season Outlook

Pre-season jitters are spiking early this year.

Worried by a sinking economy and swirling changes in code and regs, tax professionals are showing acute concerns about the oncoming busy season, with 28% registering at least a 7 on the CPA Trendlines Stress-O-Meter.

Nevertheless, 46% of practitioners are predicting a better overall season than last year’s, twice as many as those expecting a worse season.

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SELECTED COMMENTS

Key causes of stress at this time:

1. Much new work and understaffed.
2. I don’t know were we are heading with the current financial crisis. Which makes it very hard to advise clients.
3. Pressure to meet deadlines, complaints about fees.
4. The sense of not being able to get everything done.
5. Clients that wait until the last minute, even though they have had plenty of time to get their information together and clients that think that they are your only client.
6. Never enough hours in the day.
7. There is always more to get done than time to do it.
8. everything is late, we are rushing and delivering returns closed to deadline
9. clients are much more slow in responding to questions in relationship to dead lines and required filings.
10. The tax law changes are too overwhelming to keep up with every year, the stress of dealing with deadlines that never end.
11. We are finding that our clients needs continue to expand–beyond the stimulus payments.
12. Staffing issues during tax season, current economic indicators
13. Senior management encourages economic units to pilfer clients from one another, pitting partner against partner in all transactions.
14. It is after October 15th and there is still a lot of work to be done.
15. Too much work, not enough staff.
16. We’re very busy but work hard every day and DON’T let clients interfere with the process of getting our work done — telephone calls are screened and limited.
17. I get more than 60% of my clients from the same source. When they need something, I must instantly respond.
18. Too much work to provide the level of service I would like to provide.
19. processes help workload, but workload still more than staff can handle; last 3 weeks crazy!
20. Not enough experienced staff with good people skills, leaving a great deal of the workload for management (me).
21. Plenty of work, significantly fewer co-workers with experience.
22. Work and personal situations always seem to bottleneck during tax season.
23. I have learned to manage my stress more effectively.
24. Intense demands and limited number of hours in each day.
25. I am a sole practitioner, enuff sed.
26. I changed jobs this summer and the partners at my new firm say the most I will be working is about 48 hrs/week, v 70+hrs/wk at my old firm
27. This will just be my sixth year, so I am still building the business.

Why this year will be better than last year:

1. Addt’l manager, new office administrator, addt’l bookeeping staff
2. I may purchase another practice
3. I taught a college course at our local college last year. I won’t be doing that again.
4. I am going to be tougher on my rude clients and move up my deadline for information.
5. We were learning a paperless system in 2007.
6. Expansion of staff and moving into a larger office, that is being renovated for us.
7. more staff
8. Increased clients. I’ve been in business since last tax season, my first after a long time.
9. More marketing of profitable services
10. Better trained employees, we had three new employees last year (our total employees), and now they all have one year under their belts.
11. Better staff and better practices in place.
12. I have more clients this year.
13. I won’t be doing everything myself. I also have a new office that is much more conducive to client meetings.
14. We have substantially increased fees, staffed up early and purged bad clients.
15. I’ll have my full staff back this season.
16. New office location and hopefully new clients without a great loss of existing clients
17. I had pnuemonia and was out most of Jan 08…started behind and never caught up
18. Start earlier.
19. I will be trying to promote my business to reach more clients
20. More volume, but hopefully same result
21. We should be better staffed
22. More clients
23. Already have trained additional help; Last tax season, my mother was very ill
24. I bought a practice last year. A lot of new clients. This year I’m better prepared.
25. I have merged my firm–looking forward to the new working conditions.
26. Higher revenues
27. Better staff
28. More experienced staff
29. Less clients.
30. have higher level staff
31. Another year’s experience on some very good staff plus a couple of new staff.
32. 2nd year on software
33. More delegation
34. I have gotten rid of 2 very high maintenance clients and have replaced them with new clients that are better.
35. Weeded out bad clients and am more focus
36. HIGHER REVENUES
37. We have retained our staff and will add two additional people.
38. Better/more staff in place.
39. I have hired some help, plus I’ve gotten a couple of years under my belt with the same clients.

ACKNOWLEDGEMENTS
We gratefully acknowledge the responses and comments from the participants who agreed to be quoted by name: Tom Ribb, Robert Kowalewski, Maggie Mayer, Steve Tilley, David Dollar, Steve Mazur CPA, Beth Pitt, Phillip Kirby, Roxann, Del Chmielewski CPA, David Hogan, Donna Bordeaux, Mark Albertz, Barbara Heyliger, Richard A. Reynolds CPA, Sherry Robertson CPA MTx.
Thank you!

Get all the answers: Join the survey.

Five Must-Do’s for the New Busy Season

Are you ready? How savvy CPAs plan to cope: Click here, get the answers.

by Rick Telberg/At Large

Just as CPAs were hitting their stride toward the October 15 final tax filing deadline, the world changed. Add in a hotly contested Presidential election season, and all bets are off.

The new Emergency Economic Stabilization Act of 2008, signed into law on October 3, makes more than 290 changes to the tax code.  It includes more than $150 billion in tax breaks for individuals and businesses. “With most of the tax relief available immediately in 2008 and 2009, year-end tax planning takes on added urgency this year to maximize taxpayer use of these new tax breaks,” according to CCH.

The tax code changes are dizzying. To name a few:

• The 2008 AMT patch;
• Extended mortgage foreclosure tax relief;
• Individual taxpayer incentives;
• Disaster area tax relief;
• New energy tax incentives;
• Revised preparer penalty standard;
• Business tax incentives;
• The enhanced child tax credit; and
• Broker basis reporting.

With the late-breaking complications, it could be difficult for many practitioners to improve upon last year’s busy season. About two in three practitioners enjoyed revenue and profit gains last season compared with the season before.

READ MORE →

Q&A with Rene Lacerte: The CPA world, post-meltdown

Serial accounting software entrepreneur sees opportunity amid the market chaos.

Q: How concerned should CPAs be?

Lacerte: CPAs should be concerned. But, this is an incredible opportunity for CPAs to step in and be positive change agents with businesses — to help them understand how the economy could effect their plans in terms of risk and opportunity, and help them streamline their operations like never before. CPAs that don’t take the leadership role in proactively improving their client’s strategy and operations at every level, with new ideas and new technologies, will find that their services are less valuable and their practices will suffer.

Q: What are the key issues CPAs should be thinking about?

Lacerte: CPAs must focus on new ways for their clients to strengthen customer relationships and grow their businesses, while eliminating non-core processes and activities. Their clients are being bombarded every day, at home and in the office, by new approaches and technologies that can add tremendous value when deployed in a thoughtful way. CPAs are in a unique position to help their clients sort through this plethora of offerings. The latest Web and “Software-as-a-Service” offerings for CRM, accounting, bill payment, accounts receivable, and financial document management are proven to lower costs and drive new levels of efficiency and business insight. And, they can be deployed more rapidly and inexpensively than most people realize. CPAs should understand these services and be at the forefront of using them to add value to their clients and to their own practices.

Q: How will the terrain (financial world, CPA community, etc.) be different for CPAs going forward?

Lacerte: Clients will expect more from CPAs. And CPA accountability as both financial advisors and change agents will increase. As a trusted advisor, CPAs will be asked to assess a client’s complete business picture and drive positive change. They will be expected to highlight areas of a business plan that are more risky than others and recommend alternatives. But beyond that, business owners will be looking to their CPAs to deliver new, innovative services that help make mundane, costly, and time consuming activities simply go away.

Bio: Ren̩ Lacerte, CEO and Founder. Bill.com РRen̩ founded Bill.com in April 2006, bringing with him more than 18 years experience in the finance, software and payments industries. Built from a legacy of four generations of entrepreneurs, Ren̩ developed the concept for Bill.com based on personal experience growing new businesses. He realized the tremendous need to simplify and automate the way businesses manage bills, invoices, payments, contracts and other important financial documents; and the challenge of not having control and intelligence into daily spending and cash flow. Bill.com solves these issues and also puts all valuable financial documents in one place for secure access anywhere/anytime.

Prior to Bill.com, René co-founded online payroll service PayCycle, which now employs over 100 people and serves over 75,000 customers. PayCycle has received multiple 5-star awards from PC Magazine and numerous accountant trade publications. Both at PayCycle and Intuit, René developed industry leading customer service organizations to provide an unparalleled customer experience to build loyalty.

René spent five years at Intuit, creating and managing the company’s bill presentment team and growing its bill payment and credit card businesses 30% in one year. He also launched Intuit’s first connected payroll product, growing the team from two employees to 300 in 18 months.

René received a Masters of Science degree and Business Administration degree in Economics and Quantitative Economics from Stanford University.

Billing Rates Are Still Robust Despite Economic Turmoil

Billing rates at CPA firms remain high, evidence that the marketplace continues to be strong for CPA firm services.

Despite the economic change and uncertainty that has affected U.S. businesses this year, the value of CPA CPA firms’ services is holding steady, according to the latest issue of Accounting Office Management & Adminstration Report (subscribe here, 12 issues $469/year). READ MORE →

Fair Value and BASEBALL!

Now the fair value issue gets serious. It’s not just about accounting anymore… it’s about something important. It’s about BASEBALL!

Representative Dennis Kucinich said that New York City officials could be prosecuted if they lied about the property value of Yankee Stadium.
– Appraisals of Yankees’ New Stadium Are Under Question – NYTimes.com

Related articles

• Yankee Stadium Deal Criticized by Lawmakers
• ‘Waste and abuse’ in financing of new Yankee Stadium
• Congressional panel rips Yanks, NYC over stadium
• Yanks’ bid examined by congressional subcommittee
• Yankees’ Deal May Have Violated Law, Report Says

If you haven’t lost data in a hard drive crash…

… you probably will.

The question is: How much time and money will you spend to recover the files?

An alarming 1 in 3 home-based businesses lost company data in a hard-drive failure in the past year. Home-based accountants, bookkeepers and tax practitioners not immune. And they have more to lose than most home-based businesses.

No wonder, then, that hardware vendors are rushing backup and recovery products to market.

AMI-Partners estimates that home-based businesses in the United States are on track to invest a sizeable $1.3 billion on IT security and storage-related solutions this year. Home-based business owners are focusing on areas such as: READ MORE →

Financial Crisis Spurs CPA Job Seeking

What’s your advice for the next President? Sound Off here.

by Rick Telberg/On Careers

The crisis in financial markets and heightened uncertainty in the economy may be prompting some tax and accounting professionals to accelerate their plans to jump to new and better jobs.

The number of CPAs who say they’d consider looking for a new job has jumped seven points, to 44 percent in September from 37 percent in August.

“I know there are many jobs out there for accountants, especially at the level that I am at,” says a CPA at a mid-sized business. She feels lucky to be young, skilled and in demand as a senior accountant. “I am part of the shortage era and the number of people at my skill level is limited.”

READ MORE →

CAQ Defends Fair Value

UPDATES:

• Changing the Rules – Floyd Norris
• SEC Agrees to Accounting Shift Sought by U.S. Banks

News from the Center for Audit Quality (CAQ)…

October 15, 2008

Mr. Christopher Cox
Chairman
U.S. Securities and Exchange Commission
100 F Street, N.E.
Washington, D.C. 20549

Dear Chairman Cox:

We are writing to express grave concern regarding recent calls for the SEC to override guidance issued by the Financial Accounting Standards Board (FASB) and the Commission’s staff that would effectively suspend fair value or mark-to-market accounting. We believe such urgings are decidedly not in the public interest.

A move by the SEC to suspend fair value accounting would be a disservice to the capital markets, would be inconsistent with the views of investors, would harm the credibility and independence of the standards setting process, and would run counter to fundamental notice and comment principles. With third quarter financial statements now in process and year-end 2008 imminent, such a change could jeopardize already-fragile investor confidence.

No one disputes that these are trying economic times. However, the current crisis of liquidity, credit, and confidence was not caused by fair value accounting; rather, sound accounting principles helped expose the problem. Fair value accounting with robust disclosures provides more accurate, timely, and comparable information to investors than amounts that would be reported under other alternative accounting approaches.

Investors have a right to know the current value of an investment, even if the investment is falling short of past or future expectations. It, therefore, is imperative at this critical juncture that we not engage in activities that would further obscure reality from investors and do more to damage confidence in the marketplace. We urge the SEC to be clear in rejecting urgings that are contrary to this imperative.

Sincerely,

Cindy Fornelli
Executive Director
Center for Audit Quality

Jeffrey J. Diermeier, CFA
President & Chief Executive Officer
CFA Institute

Barbara Roper
Director of Investor Protection
Consumer Federation of America

Jeff Mahoney
General Counsel
Council of Institutional Investors

cc:
Kathleen L. Casey, Commissioner, SEC
Elisse B. Walter, Commissioner, SEC
Luis A. Aguilar, Commissioner, SEC
Troy A. Paredes, Commissioner, SEC
Henry M. Paulson, Jr., Secretary, Department of Treasury
Ben S. Bernanke, Chairman, Federal Reserve
Mark W. Olson, Chairman, PCAOB
Robert H. Herz, Chairman, FASB
Sheila Bair, Chairman, FDIC
John C. Dugan, Comptroller of the Currency
John M. Reich, Director, Office of Thrift Supervision

Billable hour in the extreme

Sign found in North Texas by Ed Kless, advertising “a consulting group of corporate escapees.”

Click all the way through and scroll down a little to see the comments.