Business Booming, but Not as Much as Last Year

How does your firm compare?

By CPA Trendlines Research

If the early results from the CPA Trendlines 2024 Busy Season Barometer: Emerging Issues, Opportunities, and Trends hold true through April, this will be a pretty good year for the vast majority of accountants and tax practitioners – not quite as good as last year, but still, pretty good.

MORE: Busy Season Barometer Offers Clues for Better Business | Tax Practitioners Say Happy Days Are Here … Again | Brandon Hall: Firms Try to Make Too Much on Tax Prep | If Only the IRS’s Tax Pro Were Useful | ID Theft a Problem for IRS Even When It Doesn’t Exist | IRS Still Falling Short on Service | Eight Ways the IRS Can Speed Up Processing Tax Returns | Treasury IG Sees Progress at IRS | How Tax Practitioners Became Cybersecurity Risks
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Despite difficulties finding staff and professionals, 45 percent of respondents say they have increased their client list by at least 5 percent. (Last year, it was 65 percent.)

In fact, 14 percent have seen an increase of over 10 percent. Good, but not as good as last year’s 22 percent.
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Busy Season Barometer Offers Clues for Better Business

workers in busy office

Take a tip from a peer.

By CPA Trendlines Research

The CPA Trendlines Busy Season Barometer: Emerging Issues, Opportunities, and Trends is more than just a survey of the state of the industry at CPA firms across the nation. It also offers clues to what firms are doing to make the busy season better, easier and more profitable.

The clues are in the comments – open-ended answers where practitioners tell us what they’re doing, how they’re feeling and where they’re going.

MORE: Tax Practitioners Say Happy Days Are Here … Again | The IRS Is Coming! Get Your Clients into Compliance | End Tax Season Meetings with Clients … Seriously | Brandon Hall: Firms Try to Make Too Much on Tax Prep | Eight Steps to Getting Started with AI: A Guide for Tax Professionals | FTC Nails TurboTax for ‘Free Filing’ Scam | If Only the IRS’s Tax Pro Were Useful | ID Theft a Problem for IRS Even When It Doesn’t Exist
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One of the best questions is “What are you doing differently this year?” Each answer reflects an attempt to make the best of a stressful situation – the annual tax season.

Here are a few quotes to think about, categorized by how well various respondents’ seasons are going this year. Each is an idea that might make your year better.
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Auditing Standards ‘Yellow Book’ Updated

Words "time for an update" on clock face

The changes are more than just technical.

By CPA Trendlines Research

America has a wealth of governments. They’re all over the place. Municipal governments. County governments. Parishes, boroughs, villages, hamlets. Special purpose local governments. School districts, fire districts, tax districts. Independent authorities, tribal councils and councils of governments. State governments, territorial governments and, of course, the big one in Washington, District of Columbia, with its thousands of branches, arms and agencies.

Love them or hate them, there they are. Tens of thousands of governments. And they all have one thing in common: they need to be audited.

MORE: Firms Culling Clients as Staffing Woes Persist | Revenue Up at 59% of Accounting Firms … and More Good News | ChatGPT for the Reluctant Accountant | Survey Shows Challenges, Priorities Shifting | Can Big Data Spot Financial Fraud? | Accountants Torn Over 2024 Economy, Offer Advice | SURVEY: Are You Offering the Right Services? | SURVEY: 42% of Accountants Turn Away Work Over Staff Shortages | Talent Gap Widening: Be Very Scared
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Or, to put it another way, they need auditors.

Being governments, their accounting and auditing standards are different from those of nongovernmental entities.
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Firms Culling Clients as Staffing Woes Persist

man in suit exiting office building

Others tap outsourcing, training clerical staff as solutions.

By CPA Trendlines Research

Early results from the CPA Trendlines 2024 Busy Season Barometer: Emerging Issues, Opportunities, and Trends are showing a painfully persistent problem with staff shortages, though it seems the hardship may have improved a bit since last year.

MORE: Revenue Up at 59% of Accounting Firms … and More Good News | Compensation’s Up, but Up Enough to Retain Staff? | Are Accountants Charging Too Little? | ChatGPT for the Reluctant Accountant | CPAs Needed to Help Small Biz Adopt AI | Revenue Growth Is Top Priority for Small Firms | Is the CPA Business Model the Clog in the Pipeline?
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This year, like last year, survey respondents are reporting staffing as the second most common concern. Last year, it was reported by 47 percent, almost tied with the main concern: late or unprepared clients.

This year, uncooperative clients still rank first, at 50 percent, but staffing concerns have dropped to 37 percent.
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Revenue Up at 59% of Accounting Firms … and More Good News

financial graph on blackboard

Technology is key for competitive advantage.

By CPA Trendlines Research

The 2024 Accounting Industry Report from Wolters Kluwer cuts through a lot of the underbrush of sentiments and anecdotal evidence about the state of the accounting business today. Backed by statistical data, the report presents a some significant truths about the state of the industry.

MORE: Compensation’s Up, but Up Enough to Retain Staff? | Are Accountants Charging Too Little? | Revenue Growth Is Top Priority for Small Firms | Is the CPA Business Model the Clog in the Pipeline? | Accountants Cozy Up to Clients with CAS | SURVEY: CPAs Culling Clients for Better Work-Life Balance | Women-Owned Businesses Upbeat but Need Help | Accountants to the Rescue as Startups Struggle | Looking for Recent Grads? Good Luck | What the Corporate Transparency Act Means for Accountants | Understanding the Full Cost of a Data Breach | Why the U.S. Must Act Now to Protect Our Online Privacy
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And the general state is good. Most firms are growing, profitability is up, new services are surging, and serious practices are making efforts to improve the quality of client experience.

Here are some of the most notable facts.
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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.

MORE: Are Accountants Charging Too Little? | ChatGPT for the Reluctant Accountant | Survey Shows Challenges, Priorities Shifting | Can Big Data Spot Financial Fraud? | Accountants Torn Over 2024 Economy, Offer Advice | SURVEY: Are You Offering the Right Services? | SURVEY: 42% of Accountants Turn Away Work Over Staff Shortages | Talent Gap Widening: Be Very Scared | CPA Biz Is Booming, But for How Long? | The 7 Categories of Cybersecurity Solutions Firms Need
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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

bar chart
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!

MORE: The IRS Is Coming! Get Your Clients into Compliance | End Tax Season Meetings with Clients … Seriously | Brandon Hall: Firms Try to Make Too Much on Tax Prep | Eight Steps to Getting Started with AI: A Guide for Tax Professionals | The Nightmare of Non-credentialed Tax Preparers | Tax Pros Are Expanding and Earning More
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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?

MORE: ChatGPT for the Reluctant CPA | CPAs Needed to Help Small Biz Adopt AI | Revenue Growth Is Top Priority for Small Firms | Survey Shows Challenges, Priorities Shifting | Survey Shows That Tech Remains the Great Divide | Is the CPA Business Model the Clog in the Pipeline? | Can Big Data Spot Financial Fraud? | Will Unclogging the Accounting Pro Pipeline Kill Mobility? | Accountants Cozy Up to Clients with CAS | Accountants Torn Over 2024 Economy, Offer Advice | Accountants Bullish on Income
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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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