The Five Treacherous Factors Hobbling Today’s CPA Firm

2016-ROUNDTABLE-OUTLOOK-FOR-ROSENBERG-MAP-COMMENTARY-VF-240x219Crumbling firm infrastructures, succession, the economy, staffing shortages, and shake-outs.

By CPA Trendlines
Annual MAP Survey

The new Rosenberg MAP Survey reveals a few significant things about the state of the accounting business—that growth and profit-per-partner are growing at a negligible rate and that intangible people issues are becoming painfully tangible, for example. But some more subtle truths emerge in the gimlet-eyed observations of those who advise CPA firms.

More on the  2016 Outlook & Forecast: CPA Firm Growth Rates Hit a Wall  |  The Five Treacherous Factors Hobbling Today’s CPA Firm  |  Sam Allred: Change Agents Needed  |  Tamera Loerzl on Growth, Succession Plans Critical for Firms  |  Allan Koltin on Talent Wars Go from White Gloves to Boxing Gloves  |  Get the full report: The Rosenberg Map Survey

These truths are not self-evident. But with a little analysis, five trends emerge vividly – trends impacting CPA firms large, small, and middling. So it’s worth having a look:

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NEW SURVEY: CPA Firm Growth Rates Hit a Wall

Organic growth drops under 5% while mergers surge to 30% of new revenue per firm.

Rosenberg MAP 2005 to 2014 growth rates
Growth rates level off for CPA firms to 6.7% (Rosenberg Map Survey, firms over $2 million/year)

By CPA Trendlines
Annual MAP Survey

The new 2015-2016 annual MAP survey presents news both good and bad—and more of the latter than the former.

  • The good news: CPA firms revenues and profits increased last year.
  • The bad news: The increase in revenues was less than in the previous year, a lot of it was only due to mergers, and growth was lowest for the smallest firms. And the increase in Income per Equity Partner was especially sluggish.

Most worrisome was the finding that organic growth— which is to say real growth not generated artificially by mergers—was actually a bit lower than in 2013, dropping from 5.2 percent to 4.7 percent, according to the new Rosenberg MAP Survey, available exclusively from CPA Trendlines.

More on the  2016 Outlook & Forecast: CPA Firm Growth Rates Hit a Wall  |  The Five Treacherous Factors Hobbling Today’s CPA Firm  |  Sam Allred: Change Agents Needed  |  Tamera Loerzl on Growth, Succession Plans Critical for Firms  |  Allan Koltin on Talent Wars Go from White Gloves to Boxing Gloves  |  Get the full report: The Rosenberg Map Survey

Is this really The End of The Golden Age for the profession?

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The Emerging Cuba Opportunity for CPA Firms

Cuba special report logo vFAfter 50 years of practice in international trade and finance, Cuba accountants welcome U.S. ties.

By CPA Trendlines

HAVANA, Cuba – The United States is ending its 55-year trade embargo on Cuba. An embassy has been opened in Havana, and Cuba is opening its doors to American business.

The blockade isn’t down yet, but it is being dismantled as fast as Washington politics allows. It isn’t too soon to start looking for opportunities for international growth just 90 miles off the coast of the United States.

Lidya Esther Rodríguez González
Lidya González

Among the opportunities for both American and Cuban accountants are:

  • American and Cuban CPA firms serving Cuban-American enterprises and ventures.
  • Americans wishing to learn more about business in Cuba.
  • Cubans wishing to learn more about American accountancy and business
  • American companies wishing to open branches, subsidiaries, and other entities in Cuba
  • Other non-accounting services that accountants often offer, from IT to payroll to valuation

Do not underestimate the professional capacity of Cuban accountants.

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CPA Cannabiz Boom

250 new clients in two years.

By CPA Trendlines

For a couple of years now, Guske & Co. PLLC, has been venturing into a vast new niche in the great Northwest where the people are nice, easy-going entrepreneurs with a pioneering spirit and a willingness to learn, follow rules, and take risks. His niche — the booming cannabis biz. Booming to the tune of 250 new clients in two years, an annual growth rate of 80 percent.

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Maybe This Is Your Father’s Accounting Practice

Too many tech 'solutions' don't solve the real 'problems.'

By Gail Perry
The Accounting Firm Operations and Technology Survey

Perry
Perry

As a person who still prefers books to e-books, who chooses a landline over her cell phone, who cherishes her collection of vinyl albums and who enjoys writing letters in longhand (BTW: I’m writing my first draft of this article in longhand), and (full confession), as a CPA who maintains a small tax practice of her own and who manages her books in Excel (in spite of the fact that I know many accounting software programs inside out and have written myriad books about financial software), I can completely relate to the results of the Accounting Firm Operations and Technology Survey without a trace of the surprise and disappointment expressed by my journalistic colleagues who shared their points of view.

Accountants aren’t clueless about technology and they’re not stupid when it comes to making decisions about how to operate their business. What they are is busy.

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Industry Employment Surge Shows No Signs of Slowing

Chart showing number of employees in the accounting industry according to Bureau of Labor Statistics
All employees in the accounting and bookkeeping industry; numbers reported in thousands

Record highs seen in overall employment, staff wages, CPA firm employment and staff, and more.

By CPA Trendlines Research

The U.S. tax, accounting and bookkeeping industries show no signs of slowing down, according to CPA Trendlines sources.

Here CPA Trendlines reports on:

  • Current hiring trends in each of the bookkeeping, tax, payroll and CPA segments of the industry.
  • Average hourly wages for key segments.
  • Typical hours worked per week.
  • And trends concerning women in the accounting workforce.

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