Are CPA Firms Immune to the Recession?

Source: Accounting Today

The answer to the question in the article’s title is no, according to Gary Shamis, managing director of SS&G Financial Services in Cleveland, and a member of The Advisory Board.

Shamis provides some antidotes for accounting firms, including:

• Prepare a budget showing different scenarios, including a revenue decrease.
• Ask staff to recommend ways to control expenses.
• Inform staff that the rate of compensation increases to which they have become accustomed may no longer be possible.
• Examine firm operations looking for low productivity, unprofitable services, and excess administrative staff.
• Don’t burn your bridges to accounting school professors. Keep the internship program going.
• Positive earnings impacts can come from:
  • Cutting CPE requiring travel.
  • Higher deductibles for insurance policies.
  • Keeping the office less warm.
  • Communicating to employees about, and making them accountable for, the importance of good realizations and utilization.
  • Being more diligent about assessing clients’ ability to pay fees. Consider requiring progress payments on engagements.
• Be aware of opportunities to gain clients trying to cut expenses by moving down from larger firms. Try to help clients save money on your services and prevent them from migrating to other firms.
• Think about whether the downturn might provide some opportunities to develop new growth areas for the firm.

For the complete article, click here and select the article “Batten Down the Hatches” in the January 5, 2009, issue.

From Accounting Today, January 5, 2009, SourceMedia Inc., One State Street Plaza, 27th Floor, New York, NY 10004, 800-221-1809.