And the top five survival strategies, according to CPA Trendlines Research.
CPA Trendlines Business Barometer:
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By CPA Trendlines Research
Under the historically unprecedented pressures of the Covid-19 pandemic, U.S. accounting firms large and small are adapting as fast as they can—or rather, as fast as they must.
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Practitioners are striving, struggling, scrambling to do what they have always done, and on top of that, to learn what they never knew in order to serve clients as in ways they needed to before.
Less than three months from when the first cases were reported, the pandemic has taken the lives of over 70,000 Americans and is approaching 3,000 deaths a day. While the pandemic has been a shock to the economy, tax and accounting practices appear to be maneuvering through it better than many other businesses.
- Generally small offices, many sole practitioners
- No dependence on a flow of shoppers
- Ability to receive raw materials—information—digitally
- Ability to do work from remote locations
- Ability to quickly adapt services to new needs
- Quick to understand new federal programs
- No matter what, people have to pay their taxes.
The CPA Trendlines 2020 Busy Season Barometer has been receiving comments on coping with Covid from across the country. The reports are crackling with stress.
Among the most common goals today:
- Keep staff and clients healthy
- Learn new technologies for remote interaction
- Get tax returns filed despite social distancing
- Offer new services, such as filing for new benefits
- Keep cash flow flowing
“Strangest busy season ever…”
None of these goals are reached easily. The general gist of the struggle is just to keep up with a busy season that’s become exponentially busier.
“Strangest busy season ever,” said an anonymous CPA based in Texas. “Did not see it coming, that we would have Covid and that suddenly we'd put all our focus onto Covid assistance and consulting, and not on compliance during busy season, and moving offices home, and not able to meet with clients other than conference calls. But we're pivoting and finding opportunities to be the go-to for our clients in navigating through this time successfully and strategically. It's stressful to have new regulations, new ways to do business, new rules, and the new Covid assistance PPP all hit during compliance season. But we are adjusting and working hard to be what our clients need through this.”
CPA Gregory Marcantel expects a year somewhat worse than last year, but his firm is doing all it can to stay healthy and stay in business. “We reduced the number of people in our office at any time from 13 to 5 or 6,” he says. “Some people are working remotely and others are rotating in. The PPP loan program blew up the entire schedule from April 1 through April 17th because we were working on applications for clients.”
Deann Hill, who heads a very small firm in southeast Kansas, is juggling as best she can. “We are fine on remote access, portal, etc.,” she tells us. “It is just managing the mess with all the work that was already baked in. Attempting to strategize around a workflow calendar that now has 4 months of work due on the same day in July... Seriously, it’s like fighting a war. Every day you think you have enough ammunition and supplies to last, then ‘they’ change the regs/drop new bombs, whatever. The target is ever moving.”
Life in the basement
An anonymous sole proprietor is also juggling madly with a plight that may sound familiar to others who work alone. “I am busy putting together everybody's Schedule C and business returns in order to apply for these stimulus loans,” the solo CPA says. “I can't even get paid for most of the work that I am doing aside for my regular fees. Thank g-d, I have been healthy. It has been hard since my elderly can't meet with me as they usually do. I have clients to whom I travel that are completely on hold. I hope that I won't lose them to somebody closer to home. Everything has been done by email and mail. My postage fees have gone through the roof! It has been sad in that some of my clients are no longer alive. I am running between children's Zoom classes and my office in the basement.”
Greg LeFils, head of a family firm in Orange City, Fla., expects a much better year. He took quick steps to deal with the problem while keeping the office open.
“The virus arrived in Florida late in tax season, whereby the season was mostly ‘another day at the office,’” he comments. “The only changes were: Medically inventoried our staff, low risk continued to work, high risk went home. Cleaned, cleaned, cleaned. Reschedule tax appointments for high-risk clients, socially distanced with the remainder.”
How long can this go on? Is the accounting industry, tested by fire, becoming stronger? Is it improving itself? Or is it dragging itself toward eventual burn-out?
The challenges are daunting, but so far, practitioners are using persistence and creativity to ride out the storm.