Compensation’s Up, but Up Enough to Retain Staff?

young woman seated at laptop counting money

People are leaving the profession. More money is one solution.

By CPA Trendlines Research

The AICPA’s 2023 National Management of an Accounting Practice (MAP) Survey came up with an odd statistic. Kind of hard to believe until you get the context.

The finding: the median employee turnover rate across all CPA firms is … 0 percent.

Yes, that’s a zero.

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But wait. A median, as they say, is only half the story.

The bigger story – the broader context – is that more than half the responding practices had zero turnover, so the median fell at zero percent. But that goose egg doesn’t reflect the reality of firms at the other side of the spectrum.
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Tax Practitioners Say Happy Days Are Here … Again

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Seventy percent report as good or better year than last year.

 

For most, anyway.

By CPA Trendlines Research

The first results of the 2024 Busy Season Barometer: Emerging Issues, Opportunities, and Trends are in, and so far, halfway into the tax season, accountants and tax practitioners are reporting another pretty good year.

That’s two in a row!

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Last year, 58 percent of survey respondents said their year was much better or somewhat better than 2022, which, as you may recall, had been a rather rotten year.

So when only 32 percent of this year’s contributors say this season is better than 2023, it doesn’t mean fewer are having a good year. It means almost a third are reporting a year better than a good year.
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Are Accountants Charging Too Little?

pensive woman staring while surrounded by various denominations of floating currency

Size matters in partner income. (AICPA MAP)

Hourly billing on the decline but still holding on.

By CPA Trendlines Research

By all indications,  CPA firms are outperforming the general economy by a very satisfying margin.

But are they charging enough?

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All categories of median net fees show substantial increases from 2021 to 2023 in the latest AICPA National Management of an Accounting Practice Survey:

  • Net client fees leaped up 24 percent.
  • Net client fees earned since prior year: up 15 percent.

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ChatGPT for the Reluctant Accountant

two men looking at a computer screen

Getting started is fast and easy.

By CPA Trendlines Research

Artificial intelligence has a lot in store for the accounting industry. AI is still in its infancy, but it’s also ready to start helping any CPA firm, even the low-tech solo shop.

MORE: CPAs Needed to Help Small Biz Adopt AI | Revenue Growth Is Top Priority for Small Firms | Survey Shows That Tech Remains the Great Divide | Can Big Data Spot Financial Fraud? | Accountants Hopeful, Concerned and Confused about AI | The 7 Categories of Cybersecurity Solutions Firms Need | Research: Accounting Pros Cautiously Optimistic about Generative AI | How Auditors Can Beat AI
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You can start right now. You don’t need to invest anything other than the few minutes it takes to register to use ChatGPT at chat.openai.com. It’s free. You can ask a question, and an astonishingly poignant and detailed answer will appear within seconds.

And there you are, on the cusp of 21st-century technology.
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CPAs Needed to Help Small Biz Adopt AI

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Which areas of your business would you expect to be the most and the least affected by artificial intelligence?

 

Privacy, intellectual property concern many survey respondents.

By CPA Trendlines Research

Small businesses are getting more comfortable with artificial intelligence, according to a survey-based report from FreshBooks.

“Small business owners are less convinced that AI is coming for their jobs and/or the jobs of their employees,” the report says, “with two-thirds disagreeing that AI will replace them.”

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Still, in a bit of a contradiction, 44 percent of owners say they expect to hire fewer people in the future thanks to expected AI capabilities. And the larger the business, the more likely they will use AI to reduce payroll.
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Revenue Growth Is Top Priority for Small Firms

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Cost reduction? That’s on the list, too.

By CPA Trendlines Research

As in years past, CPA firms of all sizes are putting revenue growth at the top of their priority lists.

The rest of their priority lists tells how they plan to get there.

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According to the Wolters Kluwer 2024 Accounting Industry Report, 61 percent of responding firms – 90 percent of which are small firms – are primarily aiming at higher revenues and profits. That’s 11 percentage points above secondary goals.
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Survey Shows Challenges, Priorities Shifting

two worried businesspeople having coffee and looking at computer

Top concerns vary widely by firm size.

By CPA Trendlines Research

CPA firms small, midsized and large are facing new challenges and reorganizing their priorities as they shake off the aftereffects of the COVID-19 pandemic.

According to the Wolters Kluwer 2024 Accounting Industry Report, based on a survey of 1,509 accounting firms, pricing and competitive fee pressures are the overall biggest challenges firms are dealing with. The pressure is most prominent at small firms, which comprised 90 percent of the survey respondents. Forty percent of those smaller firms said it was their top concern.

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This is the first time pricing has ranked among the top five challenges since 2015.

Pricing ranked third among large firms, 39 percent of which said it was a problem.
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Survey Shows That Tech Remains the Great Divide

casually dressed man working at laptop, money stacks covering surrounding desk space

Why are the non-adopters not adopting?

By CPA Trendlines Research

Wolters Kluwer Tax and Accounting has issued its annual tax and accounting survey. The results show an industry re-evaluating its criteria for success as firmwide changes occur.

Technology is the driver of those changes, and its rapid evolution is enabling, and even necessitating, innovation.

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In her introductory letter, Cathy Rowe, Wolters Kluwer senior vice president, professional market, says, “Those who embrace innovation will be able to redefine their firms, leave no spreadsheet untouched by the winds of change, and truly be future-ready accountants.”

The numbers back up the increasing use of and dependence on technology, but they also reveal a significant part of the industry declining to board the tech train.
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