New Job Cuts at CPA Firms and No Recovery in Sight

Payroll remains the hardest-hit sector.

By Beth Bellor

After shedding 77,800 jobs in April, tax and accounting employers have added back 45,300 employees, but the total headcount has dipped again and remains down by 32,300 from the pre-COVID level, according to the latest data reviewed by CPA Trendlines.

MORE ON JOBS: COVID Job Toll: Tax & Accounting Cuts 17,500 Employees | Firms Recall Half of Furloughed Staffers | Covid Kills 67,600 Jobs in Tax and Accounting | Pre-COVID-19, Accounting Profession Hits New Highs | Planning for the Coronavirus Recession
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In this report, CPA Trendlines highlights:

  • Current and long-term hiring trends in each of the bookkeeping, payroll, tax, and CPA segments of the industry (all data seasonally adjusted)
  • Average hourly wages for key segments
  • Typical hours worked per week
  • Trends concerning women in the accounting workforce

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Opportunities in Common and Uncommon Services

bar chartWhat do your clients want that your competition doesn’t offer?

By CPA Trendlines

Virtually every CPA firm faces two common challenges:

  • Get the work done.
  • Find more work.

MORE: Three Hidden Surprises in PPP Loan Forgiveness | Cloudy Forecasts Call for Rainmaking  |The Forecast: Partly Gloomy, Chance of Doom  |  Busy Season Benchmarks in Free Fall  | Say Hello to the New 24-Month Busy Season | Maybe the Pandemic Isn’t All BadCOVID Drives New M&A Trends  |  Re-Thinking Today’s Firm with Five Global Leaders|  Clients Want to Pay You More (Really!)

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Or, to put it another way:

  • Satisfy clients.
  • Find more clients.

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Cloudy Forecasts Call for Rainmaking

Have you assessed your clients’ needs, or just provided what they asked for?

The average monthly price paid for accounting services: Clients who do not receive advisory services pay their firms an average of $1,108 a month. They’d be happy to pay $564 more.

By CPA Trendlines

Rainmaker alert! The cloudy skies of 2020 show a good chance of precipitation.

More in Surveys & Research: COVID Impact: 17,500 Tax & Accounting Jobs LostCAS: Critical Success Factors for the Covid Age | Clients Want to Pay You More (Really!) | The Forecast: Partly Gloomy, Chance of DoomBusy Season Benchmarks in Free Fall | Say Hello to the New 24-Month Busy Season | Accounting Firms Take Billions in PPP PayoutsThe More Monitors, the Better | The Top Portable Monitors for Working from Home

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But praying for rain isn’t going to work. Neither will a rain dance. The most effective action is often simply a matter of asking and offering.

A new survey of small and midsized businesses and their CPA firms finds that clients are generally willing to pay 50 percent or more for additional accounting-related advisory services … but only if their accounting firm offers them.

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COVID Impact: 17,500 Tax & Accounting Jobs Lost

Tax and Accounting Headcount, Year-to_year Percentage Change. July 2020
In the red: Tax and accounting headcounts, year-to-year percentage change.

Cutbacks fall hardest at payroll agencies.

By Beth Bellor

Overall, the total number of employees in the tax and accounting sector is dropping again, but not nearly as dramatically as at payroll agencies.

MORE JOBS & HIRING TRENDS: Firms Recall Half of Furloughed Staffers  | Covid Kills 67,600 Jobs in Tax and Accounting | Pre-COVID-19, Accounting Profession Hits New Highs | Headcounts Dip by 3,500 in Tax & Accounting | Tax & Accounting Headcounts Hit Record High  | Hiring Growth Rate Shows Signs of Leveling Off | What Staffing Shortage? | Payroll Agencies Lead Jobs Growth in the Tax & Accounting Industry  | Hiring Trends Flash Warning Signs of Slowdown in Tax & Accounting | Hiring Surge Powered by Growth in Payroll Agencies |

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The payroll segment lost almost 15 percent of its jobs in the latest data collected by CPA Trendlines Research. In some consolation, though, those who are left are seeing record new earnings.

In this report, CPA Trendlines highlights:

  • Current and long-term hiring trends in each of the bookkeeping, payroll, tax and CPA segments of the industry (all data seasonally adjusted)
  • Average hourly wages for key segments
  • Typical hours worked per week
  • Trends concerning women in the accounting workforce

READ MORE →

Clients Want to Pay You More (Really!)

New research shows opportunities to boost revenues by up to 31%.

What clients want: Adding strategic advisory services to your tax prep and payroll bundle could increase fee income by more than 48 percent. (cpa.com)

By CPA Trendlines

As CPAs know better than anyone, these are turbulent times. Whatever the situation was, it just changed. CPAs know because they are at the center of it all — the calm, analytic eye at the center of Hurricane Upheaval.

MORE in COVID TRENDS in SURVEYS & RESEARCH: The Forecast: Partly Gloomy, Chance of Doom | Busy Season Benchmarks in Free Fall | Say Hello to the New 24-Month Busy Season | COVID Drives New M&A Trends | Re-Thinking Today’s Firm with Five Global Leaders | The No. 1 Reason Accountants Fail To Build Advisory Practices

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So consider for a moment the desperation of the businesses that are or could be your clients. They are suffering:

  • the financial and logistical onslaught of the pandemic,
  • the ever-evolving rules on taxation,
  • the constant change in compliance,
  • the lack of time for issues not within their core business (accounting, for example),
  • the problems and insecurities of their own clients and customers, and
  • concerns about the future.

In other words, clients have more important things to do than keep track of financial matters.

And they’re willing to pay for the freedom to stick to their core business.

The trick…

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What Clients Want from Tech Advisors

The top ten ‘soft’ factors small business owners are looking for before they buy.

By Laurie McCabe
SMB Group

The best small- and medium-size business know that strong financial planning is essential for survival and growth – especially these days when they’re looking for ways to automate financials, streamline planning and budgeting operations, and provide the visibility they need to steer their businesses through changing market conditions.

MORE on TECH: COVID-19 Sparks Creative New Business Models and Strategies | How to Add Visuals to a Message in MS Teams  | How Your New Car Could Double as a Doctor  | Composing Text Messages in MS Teams | House OKs $100 Billion for Rural Broadband | When COVID ‘Got Real’The COVID Outlook: A Long, Slow Climb back to Recovery | Composing Chats and Posts in MS Teams | Free Service Makes Better Passwords |

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The good news for accounting firms is that SMBs are increasingly turning to cloud-based financial solutions that can give them robust capabilities without the hassles of deploying and managing hardware, software, and infrastructure in house. Cloud solutions provide continual access to real-time, consistent information, frequent updates, and continuous innovation. While ERP cloud adoption has trailed in other areas, it’s poised to catch up quickly as businesses get more comfortable with the cloud model.

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The Forecast: Partly Gloomy, Chance of Doom

Almost three in four accountants now foresee a deeper downturn for the U.S. economy.

It gets worse: Almost 25 percent of accountants forecast a “much worse” outlook for the nation’s economy over the next 12 to 18 months. And another 48 percent predict “somewhat worse.” (CPA Trendlines Research)

BUSY SEASON BAROMETER:
How accountants are battling the Coronavirus recession
Join the survey. Get the answers.

By CPA Trendlines Research

New CPA Trendlines 2020 Busy Season Barometer results bear bad tidings for CPA firms, their clients, and their families. The forecast is not good. Accountants know numbers, and the numbers they are seeing do not bode well.

MORE BUSY SEASON 2020: Busy Season Benchmarks in Free FallFIinal RS eFiling Stats: The End of Tax Season? | Say Hello to the New 24-Month Busy Season | 9 Big Ways the IRS Could Help Accountants | The Mystery of 10 Million Missing Tax Returns | Tax Pro E-Filings Down 20 Percent | IRS Web Traffic Doubles over Year-Ago | COVID Drowns IRS in New Filings |   Percent | IRS Web Traffic Doubles over Year-Ago | COVID Drowns IRS in New Filings | 2020 Tax Season Comes to a Screeching Halt | The Tax Season 2020 Dumpster Fire | Tax Pros Fall Behind 6.2% in Returns Filed
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As the U.S. braces for a summer surge in coronavirus infections, the economy is crashing – with GDP down at an annual rate of 33 percent last quarter, and a 10 percent drop from the first quarter – the worst declines in more than 70 years of record-keeping. And new jobless claims in the latest week rose by 867,000 to 17 million.

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Busy Season Benchmarks in Free Fall

Major declines in all KPIs: Clients, revenues, profits, revenue per client, and profit per client.

BUSY SEASON BAROMETER:
How accountants are battling the Coronavirus recession
Join the survey. Get the answers.

By CPA Trendlines Research

Last year’s busy season was complicated, no doubt about it. The Tax Cuts and Jobs Act and the IRS shut-down made life difficult for tax practitioners. But ultimately, they had a good year. A good 56 percent enjoyed an increase in clientele, and only 16 percent saw a decrease.

Flash forward to the annus horribilis, aka 2020. According to this year’s CPA Trendlines Busy Season Barometer, only 46 percent of accountants are gaining clients — a 10-point reversal from last year. And another 25 percent are losing clients – a 15-point swing from 2019.

MORE BUSY SEASON 2020: FIinal RS eFiling Stats: The End of Tax Season? | Say Hello to the New 24-Month Busy Season | 9 Big Ways the IRS Could Help Accountants | The Mystery of 10 Million Missing Tax Returns | Tax Pro E-Filings Down 20 Percent | IRS Web Traffic Doubles over Year-Ago | COVID Drowns IRS in New Filings Percent | IRS Web Traffic Doubles over Year-Ago | COVID Drowns IRS in New Filings | 2020 Tax Season Comes to a Screeching Halt | The Tax Season 2020 Dumpster Fire | Tax Pros Fall Behind 6.2% in Returns Filed
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It’s impressive that so many tax offices have actually expanded their clientele during such hard times. And it’s not surprising that so many have lost clients.

What happened?

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Down by 400,000 Returns – The End of Tax Prep?

Red Alert: Tax professional e-filings drop by 0.5% year-to-year, first year-to-year decline ever.

Final IRS stats for Busy Season 2020 shows professionals filed 0.5% fewer returns than last year and lost market share to DIY’ers.

BUSY SEASON BAROMETER:
How accountants are battling the Coronavirus recession
Join the survey. Get the answers.

By Beth Bellor
CPA Trendlines Research

In what may be an alarming turning point for the profession, tax practitioners finished an already chaotic and bruising Tax Season 2020 after preparing a total of 73.8 million e-filed returns – a decline of 400,00, or 0.5 percent, from Tax Season 2019 – the first such reversal on record. Ever.

Jon Baron

MORE on TAX SEASON 2020: Say Hello to the New 24-Month Busy Season | When COVID ‘Got Real’ | Tax Pros Hold eFiling Market Share as Tax Seasons Winds Down | The Top Six IRS #FAILS this Tax Season (So Far) | How COVID Has Pulverized IRS Operations | The Mystery of 10 Million Missing Tax Returns | COVID Cuts Accounting Profits | Why Busy Season May Never Be the Same Again | COVID Tests Accountants’ Entrepreneurial Talents | Pro Tax Prep Stalls to a Crawl amid Covid-Extended Season | Clients, Revenues, Profits – Trending Down, Down, Down |

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“If you are in public accounting and relying on personal return revenue, the results this year are troubling as it is the first time that professionally prepared returns actually fell from the prior year,” says Jon Baron, the longtime CEO of Thomson Reuters Tax & Accounting, and now a venture capitalist with more than a couple startups in stealth mode.

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