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Originally produced as a slide show by three high school teachers. More about who made it here.
“Many” CFOs and CPAs in business and industry foresee recovery in 1Q 2010, says AICPA survey.
Here’s the release:
Pessimism about the U.S. economy among chief financial officers and senior-level executive Certified Public Accountants eased in the Second Quarter, according to a new survey conducted by the American Institute of Certified Public Accountants and the University of North Carolina’s Kenan-Flagler Business School.
Arleen Thomas, AICPA’s senior vice president for member competency and development, said the shift in sentiment indicates financial executives and CPAs see the economy contracting at a slower pace and suggests the U.S. recession may be reaching a bottom. “For the first time in a year, sentiment is improving in our quarterly economic outlook survey. We see a significant shift from pessimistic to neutral on the economy which suggests a leveling of confidence. At the same time, CFOs and CPAs are remaining cautious as they continue to grapple with difficult decisions within their organizations,” she said.
Xpitax president Glen Keenan ticks off the reasons accounting firms can benefit from outsourcing.
Via CAmagazine:
1. The profession is aging. That ticking in the background may be the clock on the wall or it could be the countdown to the exodus of thousands of boomer-aged CAs now contemplating retirement. “There isn’t a new, fresh set of people to address the demands that are being put on the profession,†says Keenan. Worse, those boomers will be leaving with decades of hard-earned experience and knowledge.
2. Outsource the boring, less profitable stuff. Firms can hand off the low-yield, compliance work to focus on the value-added (and higher-profit) services such as consulting work, “the services that your clients notice, with the higher billing rates and the most interesting work,†says Keenan.
3. Staff for 12 months, not two. Keenan calls it just-in-time staffing, but the reality is many firms hire staff during tax time they wouldn’t hire any other time of the year and also overwork their key staff during this period, which can lead to burnout and turnover. Rather than hiring for a short-term surge, outsourcing to a place like India lets someone else worry about staffing. (In fact, firms such as Xpitax typically hire people in India a few months before tax time, train them and then redeploy them or let them go over the summer.) “Once they sell you to do personal tax, next they try to sell you other work because they have created the same problem of having a seasonal business,†notes one accountant, whose firm offshores data-intensive work year round.
4. Forced standardization. Because the outsourcing process is entirely digital, beginning to outsource often forces firms to examine processes that will get rolled out throughout the practice. “That ends up being one of those hidden benefits that many firms don’t think of,†says Keenan.
5. Virtual, not physical growth. Firms can take on more clients, but do not necessarily have to move to new facilities, add computers and staff or worry about client poaching. “It ends up being more of an advantage with our bookkeeping clients,†notes Keenan.
6. Faster turnaround time. With India 10 hours ahead of the East Coast of North America, work sent overnight can be returned the next morning. “There’s tremendous value in having that happen across tax, bookkeeping, and financial services accounting.â€
7. It’s cheaper. Xpitax states that outsourcing accounting functions costs roughly half what it does doing it at home (US$10 to US$12 an hour versus US$20 to US$25 an hour), plus firms avoid the hidden litany of payroll taxes, vacations, sick time, benefits, space and equipment costs
The ARRA federal recovery program could add 1.6 million jobs to small businesses.
Local and regional accounting firms — the backbone of the profession — stand to reap a small windfall, if not a lifeline, from the federal spending plan. As we’ve been reporting, they are already outperforming the rest of the profession and all but a few economic sectors, like healthcare and education.
Mark Koziel at the AICPA reports today that smaller firms are expecting “marginal growth in the upcoming year and some are even expecting double digit growth.”
And now, a new research report underwritten by SAP software suggests why: The American Recovery and Reinvestment Act, a $787 billion initiative, is generally expected to create 3 to 4 million jobs over the next two years. One of the report’s authors, Steve King at Emergent Research says, “a significant share of jobs created or saved will be in sectors where growing businesses play a major role.” (Steve, by the way, blogs at SmallBizLabs.)
Emergent predicts particularly rapid growth in:
Other areas to watch:
But CPAs need to move quickly. Most of the money will spent quickly.
“The government plans to have 75% of money committed to projects by September of 2010 and 91% committed by September of 2011. Stimulus spending has already started and will ramp up over the summer and into the fall of 2009,” he says. “Because of this, growing businesses need to be prepared now to act on opportunities created by stimulus spending.”
FREE DOWNLOAD: The report — “The Stimulus Package: What It Means for Growing Businesses” –Â is available here (PDF, 21 pages).
What’s YOUR personal economic stimulus plan? Join the survey; see the results.
by Rick Telberg
With recessionary pressures bearing down on accounting firms and finance departments, it’s almost understandable that one of the first budget items to get the red pencil treatment is training and education. But I said “almost.â€
In fact, cutting back on continuing professional education (CPE) is probably the singularly worst strategy for CPAs in times like these. In a business based on an evolving body of knowledge and understanding, you can’t take the “learned†out of “learned profession†and still serve competently as a trusted professional.
| What’s YOUR personal economic stimulus plan?
Join the survey; see the results. (Free. Confidential) |
In research with Capstone Marketing, we’re finding conclusive evidence that high-performing accounting offices hold life-and-death competitive advantages over organizations that fail to adhere to operational basics like regular, relevant CPE.
Accounting and bookkeeping services actually added 2,600 jobs in April…
… to a seasonally adjusted workforce of 927,900 people, up from 925,300 in March, for an increase of about 2.8%, according to today’s employment situation report from the U.S. Department of Labor.
Click to enlarge
The professional services sector was battered by big losses in administrative, support and temporary services.
For the nation as a whole, the Labor Dept. reported:
Nonfarm payroll employment continued to decline in April (-539,000), and the unemployment rate rose from 8.5 to 8.9 percent. Since the recession began in December 2007, 5.7 million jobs have been lost. In April, job losses were large and widespread across most private-sector industries. Overall, private-sector employment fell by 611,000.
In April, employment in professional and business services dropped by 122,000. Temporary help services accounted for about half of the job loss. Since the start of the recession, temporary help employment has fallen by 825,000, nearly a third of its total.
To be sure, the data for April is still preliminary and subject to a couple upcoming monthly adjustments. But see for yourself… FREE DOWNLOAD: Click here to get the full Labor Department report (PDF, 29 pages).
Then, take a closeup look at the long-term trend for CPA firms:Â the early 1990′s were worse. Today, the trend looks relatively good for CPA firms. (Click to enlarge)
