Recession's Impact on CPA Firms

Source: The Management Catalyst

Excerpts reprinted with permission from The Rosenberg Associates, Ltd.

In February, the Rosenberg Associates, Ltd., surveyed 40 MPs from CPA firms across the country regarding the impact of the recession on their firms. Most of the firms were $5M to $20M in annual fees. Here are a few survey highlights:

• Revenues in the tax season, though sluggish, will be better than revenues expected for 2009 as a whole, due to the presence of more annuity work in the early part of the year.
• Most firms are reporting that quite a few of their clients are teetering on bankruptcy or have already shut their doors.
• Despite the gloomy outlook, most firms are still raising their rates.
• Virtually every firm is experiencing increased receivables and slower collections.
• 40% of the firms are planning layoffs.
• Since last fall, the market for experienced staff has been better than it has been in ten years. But firms have mixed feelings about hiring laid off staff.
• 61% of firms are planning smaller than usual salary increases for their staff, but 24% are planning “normal” raises especially for their better performers.
• Under normal conditions, most firms over $5M in fees are active seekers of mergers. But due to the recession, only 59% say they will still aggressively seek out mergers, with 41% backpedaling on this.
• 54% of the firms are stepping up their marketing efforts and expenditures, feeling that practice development is needed more in a recession than in normal times.

For the complete article, click here.

From The Management Catalyst, Spring 2009, The Rosenberg Associates, Ltd., Wilmette, IL, www.rosenbergassoc.com.