LEADERSHIP

The Five Big Trends Pinching CPA Profits

Steve Erickson
Steve Erickson

‘Dealing with the recession has not been pleasant or easy.’

Steve Erickson
www.SteveEricksonLLC.com

The “Great Recession” has reduced the spending of countless millions that has a negative impact on the clients we serve. As a result, our revenues have been relatively flat or decreasing, while our costs have continued to rise. This trend will have to be reversed if we are to remain viable and able to serve our clients successfully.

Here are some of the major trends:

  1. Pricing has moved substantially from a cost-plus model, in which a multiple of a person’s hourly salary was charged for services to a fixed fee, for many of the services we provide at a time when regulatory agencies are imposing ever increasing requirements and standards. As a result, our realization has decreased on many engagements due to budget overruns that cannot be billed to our clients. Since our clients are also experiencing the downturn in the economy many have requested fee decreases from us.