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Six Rules for CPA Firms in the New Economy

What’s working today in CPA firm growth strategies? Join the survey; get the answers.

by Rick Telberg

The recession may or may not be officially ending, but savvy CPAs and accounting firms aren’t planning for a return to “the good old days.”

Instead, smart accountants are retooling their skills and overhauling their offices for the next new economy. At General Electric, for instance, Jeff Immelt, the CEO who was once GE’s CFO and an accounting standards wonk, is calling it “the reset economy.” Some, like Intuit CEO Brad Smith, prefer to call it the “new normal.”

Whatever you call it, you can’t just cut costs, lay off people and expect a routine “post-recession” comeback. This new economic picture may be much different than any in a lifetime.

“It’s not just about cost-cutting” according to Mike Ramos, CPA and author of the first book in a new AICPA “Practice Forward ” series, Ride the Bear: Strategies for CPA Firms to Thrive, Survive, and Grow in a Down Economy (Ride the Bear). Ramos, a consultant to CPA firms, has written nine books, most recently the AICPA Audit Guide, Assessing and Responding to Audit Risk in a Financial Statement Audit, an authoritative interpretation of the risk assessment standards.

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Top Ten Tips for Profiting in a Bad Economy

From an entrepreneurial CPA who’s been through a few.

Barry Schimel, a co-founder of the BizActions mail marketing system for accounting firms, has seen a lot of ups and downs in his career, starting as a CPA working with distressed companies a couple recessions ago. Now on his fifth book, “100 Ways to Profit in a Volatile Economy,” Schimel talks in this video about what he has learned about how accountants and accounting firms can help foundering companies:

Co-authored with BizActions colleague Gary Kravitz, Schimel offers a slew of proven and tested strategies that have been successfully implemented in numerous organizations, as well as new tactics from the 2009 American Recovery and Reinvestment Act.

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Recession Weighs on Work-Life Balance

CPAs share some of their best time-management tips. How hard are YOU working? Join the survey, compare the answers.

by Rick Telberg

With the days of summer rapidly dwindling, accountants and finance managers across the nation are grabbing their last vacation days. But it’s not always easy.

Many finance and accounting professionals are working harder than ever, doing more with less as their organizations cut back with the recession. Balancing life and work becomes all the more difficult and all the more important. So we’ve been asking AICPA Insider readers for their best time-management tips for a balanced life.

Here are a few of the best we’ve received so far: READ MORE →

Annual Rosenberg Survey: CPA Firms Feel Recession’s Chill

Six-year culture of abundance ends with a thud, firms re-group, restructure and re-learn how to operate in a culture of recession.

via news release

The CPA profession opened 2008 on the heels of several years of extraordinary growth and profits, hopeful that the economic slowdown would not morph into a recession.  CPA firms ended the year with results most industries would have been happy with.  The full effect of the recession didn’t have a big impact on CPA firms in 2008 because by the time the economic woes surfaced in the 4^th quarter, most firms’ revenues were collected, invoiced or booked.  Firms with annual net fees over $2 million (referred to as the “Over $2M Group”) posted the following 2008 results:

• Annual net fee growth was 8.2%, down from 10.8% in 2007. This marks the end of a remarkable six-year run for the CPA profession, triggered by the scandals of Enron and others in 2002 and fueled by the multi-billion dollar market created by legislation that followed.
• Average income per partner declined slightly to $365,000 compared to $369,000 the year before. But larger firms’ (over $10 million in annual fees) earnings were down 8% from 2007 due to a drop-off in Sarbanes-Oxley and internal audit work. However, medium sized firms’ ($2-10 million) profits were up almost 1%.

Changes hit the CPA profession like a ton of bricks

Rosenberg

“The CPA profession had a great run for these past six years,” said Marc Rosenberg, creator of The Rosenberg Survey. “The post-Enron climate created a huge surge in demand for CPA firm services, allowing firms to virtually become order takers.  Throttled by a historically low supply of experienced staff, partners worked harder than ever before, and the benefits showed up in their paychecks:  income per partner rose 50% since 2003.”

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Recession Adds to Workloads, Stress; Sends CPAs Looking for New Jobs

Almost half of all CPAs say they’d quit for a job with better working conditions — even if it means a pay cut — even in this economy.

How hard are YOU working? Join the survey, compare the answers. And then add your comments here.

by Rick Telberg
At Large

While the CPA profession is proving remarkably recession-resistant, the worst business downturn since the Great Depression is nevertheless taking a toll.

To be sure, a number of firms and finance organizations have been forced into painful layoffs, although the latest jobs report from the U.S. Bureau of Labor Statistics shows a net seasonally adjusted 4,000-job increase from June to July at accounting and bookkeeping services, bringing the industry workforce to about 940,300. Still, that’s down from a year-ago July, when the BLS reported 947,500 jobs in the industry.

Despite the recession or because of it, the CPA profession is attracting unprecedented interest from college students. The AICPA reported a couple weeks ago that the number of students graduating with a bachelor’s or a post-grad degree in accounting rose 3.5 percent to more than 66,000 in 2008 – a new record. To be sure, the students chose their majors long before the recession became official, but after signs of economic uncertainty began. And there are now 213,000 more in the pipeline.

But the stresses and burdens of the recession on CPA workplaces are beginning to show. An increasing number of CPAs are telling me that they are working longer hours and enjoying it less. At the first sign of a recovery, the most talented and in-demand professionals could jump to a better job.

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Is the Paperless Office Finally Happening?

Are the forecasters finally right?

Small Business Labs reminds us that “for at least 3 decades futurists and tech forecasters have declared the imminent decline of paper due to digital technology. And for three decades they’ve been wrong.”

Now, citing an IDC study: for the first time the number of printed pages in the U.S. will decline from 1.5 trillion in 2008 to 1.47 trillion in 2009.

“Despite this,” Steve King at Small Business Labs, says, “our use of printers has gone up. Scanning has become more important as has copying. We recently added several new standalone printers to replace older models and improve our scanning capability.”