Accounting Firm Predictions for 2010

Source: Public Practice E-News

Consultant Hugh Duffy makes the following predictions based on a blend of analysis, industry conferences, publicly available information, and dialogue with hundreds of small accounting firms.

Economic Trends

1. The liquidity crises will continue to create a drag on small businesses, which will negatively impact most small accounting firms for the balance of this year.
2. As more and more skilled workers are on the sideline, there will be continued increases in micro-businesses (those with solo owners and no employees).

Accounting Industry Dynamics

1. According to Accounting Today, the top 100 accounting firms had net revenues decline by 2.8 percent in 2009 and overall staff decline by 2.3 percent. We anticipate overall staff levels will decline 3 percent to 7 percent in 2010 at top 100 accounting firms.
2. Amongst small accounting firms with fewer than five people, we anticipate a large shift from desktop accounting to cloud computing. This rapid transition will be fueled by the need for higher levels of data security, online filing demands, cash flow constraints, and enhanced features that software providers wrap into online SaaS/hosted applications.
3. Many firms will replace dated computer equipment this year. Trends are toward dual monitors, laptops and smart phones and away from traditional desktop computing.
4. The weak employment picture will persuade many accountants to hang out their shingle in 2010 rather than remain unemployed for extended periods of time.
5. This year, accounting firms are much more interested in business development and new business acquisition. This is a shift away from staffing and recruitment of a couple years ago.
6. Those that embarked on paperless years ago will move further down this path. Many on the fence will test the waters this year but operate as hybrids.

For the complete article, click here and read “Top Trends for Small Accounting Firms in 2010.”

From Public Practice E-News, Texas Society of Certified Public Accountants, June 2010, http://www.tscpa.org/.